Are you concerned about a possible recession? If so, you’re not alone! Today I’ll share some tips on how to recession proof your business, so you’ll be ready no matter what happens next.

Now, here’s a big-time truth about being in business for yourself…

The truth is that nobody knows what is coming next, in good times or in bad. We never really know the how of our dreams and desires. There is no way to know exactly where your next sale will come from. AND we don’t have a say in how the market will behave, no matter what’s happening in the world.

Now, having said that, what does a potential economic recession mean for small business owners and entrepreneurs like us? If it happens, will it rebound quickly? Will it even happen at all?

Most of all, what can you do to help your business thrive no matter what the economic conditions are? Let’s talk about that now!

First off, let’s talk about what a recession is. Per Investopedia, a recession is “a substantial, far-reaching, and persistent economic downturn.” That sounds like the bad news, right?

Well, here’s the GOOD news…

Any time there’s a disruption in the economy, it’s an opportunity.

We expect uncertainty as a part of this entrepreneurial ride. Sure, we don’t always like it. But we understand in a way that employees don’t that uncertainty is a part of life. So moments when the unexpected happens, it’s an opportunity for us to shine.

It’s a chance to tap into your resilience, creativity, and preparation skills. These talents are literally what makes us entrepreneurs. It’s also the skills that business owners and contractors use to keep things rolling, no matter what is happening around them.

(BTW, if you’re curious about what the differences are between entrepreneurs, business owners, and contractors, read all about it HERE!)

But most importantly, we prepare. And when we prepare in times of calm, we can rise in times of turmoil.

10 simple ways to recession proof your business

So with that said, what are some of the practical considerations that you can take to protect your business from recession?

Here are 10 important questions and considerations to help recession proof your business:

1-Stay informed and make an objective plan. If a recession happens, how long will it last?  While nobody can answer that for sure, do your best with what you know now. Keep an eye on the timeline of everything happening. BUT, don’t let it take over your day. Stay informed, but not obsessed. This will help you create a short-term and long-term plan that is based on objectivity rather than fear.

2-Consider the long-term ramifications for your industry or niche. Will challenging economic conditions affect you directly or indirectly? Consider the possible long-term affects in your industry or niche, and plan accordingly.

3-Test your risk threshold. What risk level are your current investments, and how liquid do you need them to be? This is a time to test your risk threshold, and plan accordingly. For example, it might be possible for you to leverage losses to counteract potential high tax bills.

4-Protect your assets.  How protected is your business right now? Consider what you have in insurance and contracts, for starters. Even your business entity status matters here. Look into all these things and take a real assessment of where you stand, and adjust accordingly.

5-How far can you leverage your cash flow and cash reserves? Calculate how far your current funds can take you without any new income. Also consider how much you can put aside each month for emergencies, starting now. (Check out my post on starting an emergency fund if you haven’t started one yet!)

6-Consider eliminating debt. If you have some extra cash beyond an emergency fund, consider reducing any debt you might have now. Focus on recurring debt first (e.g. credit card debt).

7-Consider offering payment plans for new clients. Offering flexible payment options for potential new clients could help keep you afloat. It’s also a helpful option to serve clients who want to work with you but are uncertain of their own financial state. 

8-Create new revenue streams. Revenue diversification is a great way to expand your income, and it carries little risk. So consider any new products or services can you offer that would take little time or expense to get out there. Get creative and have a little fun with this one!

9-Trim overhead where you can.  Know your businesses’ break-even point. This is the bare-bones minimum amount of money and resources you need to stay afloat. Even if you only need to hunker down for a short time, be real about essentials and “nice to have” things. For example, review recurring subscriptions or use up excess inventory.

And MOST of all…

10-Find your inner peace. No matter what the state of the world is, find your inner peace. Do what you can to get to a space of calm and confidence. I mean the space that guides you to make the next best moves–even if that next move is stillness.

I don't know the how and I am at peace with that.

What comes next? Here’s a (very) short checklist:

  • Schedule a call with your Financial Advisor  (don’t have one? I have a good recommendation).
  • Schedule a call with your CPA (don’t have one? I have a good recommendation). 

There you have it! I hope this gives you some peace of mind and some tips to help recession proof your business AND keep it stable in good times and in bad.

Remember, we’re always hoping for the best but also planning for the worst. No matter what, you’ve got this! And we at Coaching With Kaylee are here to help.

Until next time,

Love, light, and MONEY, honey…

Kaylee

Need some help in making the next move in your business? Let’s chat! Book a free consultation call HERE!


Posted in Budgeting And Cash Flow, Business Planning, Business Tools & Tips, Wealth Coaching, Wealth Hacks and tagged , , , , , ,

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