9 Ways To Recession Proof Your Business And Set Yourself Up For Success

Are you like many entrepreneurs across the U.S. (and the world) worried about your business during these crazy coronavirus times? Are you wondering how you can recession-proof your business for future tough times? If so, grab hold of these safety net tips before your livelihood goes under.

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Cash Is King

Businesses that fail during recessions are highly leveraged and swimming in debt. In emergencies like these, hold-off spending all your money on inventory so you can use cash on hand as a sail to weather you through the storm.

Shorten Your Stock

Because recessions mean slower sales, reduce your inventory. In times like these, product investments pose greater risks. To reduce risk, stay safe and trade inventory investments for cash cushions that will sustain you through slow seasons.

Target Essentials

No one is racing to Amazon for car accessories so shift your focus to food, medication, toilet paper, and other items that everyone needs regardless of their budget. This is also a great opportunity to open new accounts. Amidst an economic downturn, businesses are more open to Amazon sellers. Take advantage of the lower barriers to entry and show brands you're still in business!

Eliminate Unnecessary Expenses

Per Tip #1, now is the time to trade investments for cash. Avoid investing in software systems, courses, travel, and anything else that boosts your businesses' outflow. If there was ever a time to stay stingy, it's now.

Get Access To Capital

Even if you don't need credit now, banks are about to tighten the reins so grab a line of credit while it's still available and you'll at least have the option to use it further down the line. Also take advantage of government loans like these now that everyone's eager to help out businesses.

Focus On Your Strengths

Now is the time to stay in your lane, whether that be private label or wholesale. It's also important to emphasize your skills to suppliers desperate for sale-boosting services. If you're great at snagging discounts or profitable products, do more of that and save your bottom line. Use this time to hone your skillset and emphasize what separates you from the rest of the pack.

Negotiate

Everyone understands the hardships faced by small business owners during times like these. It's always smart to approach suppliers about temporary discounts on products and rent. Remember, if you never ask, the answer is always no.

Pay Your Debts

If you've got debt, you don't have cash on hand (see Tip #1). So pay it off and focus on earning cash cushions.

Know Your Numbers

If you don't have a professional bookkeeper, get one. If not, make sure your accounting is accurate. Otherwise, it's impossible to know what's hurting or helping your business's bottom line. If your profit margin or ROI is shrinking, it's time to switch your strategy, but if you don't have accurate profit or loss statements, you'll never know that change is needed.

Bonus Tip: Don't Quit Your Day Job

This one's pretty self-explanatory. Now more than ever, it's essential to have a safety net. As a rule of thumb, wait to quit your day job until your side hustle has secured you 3-6 months of savings and you can pay yourself.

Overall

Don't just survive the recession – help your business thrive in spite of an economic downturn! It sounds impossible, but if you follow these ten tips, you'll be swimming far ahead of the pack when waters inevitably return to normal.

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As always, leave a review wherever you're listening and share this information with anyone who needs it to stay afloat. Happy selling.

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