Recession-Proof Your Small Business

Thirty years in the mortgage industry - years peppered with many market downturns - have made me a recession-survival expert. I learned through trial and error, through speaking with mentors, through refusing to lose, that surviving a recession is possible. And I want to help you to understand how.

In the past, it was widely believed that small businesses would have a harder time surviving a recession. Larger companies were assumed to be in a better position just by virtue of their size.  That’s no longer the case. Today, smaller businesses have the ability to quickly pivot and we can adjust to market changes quickly to keep ourselves in business.  

Keep the cash flowing

Let’s be real. For small businesses, it’s all about the cash flow. Not only do we need it to keep our businesses afloat, we often rely on it to pay our personal bills. We must have funds available at all times.

Here are some essentials for keeping the cash flowing:

Prepare now.  The best time to prepare for downturns is before the cash flow dries up. Lock down a business line of credit or secure a cashback credit card while your business and the economy are in good shape. Financing gets tougher when the economy slows down. 

This Money article is a wonderful in-depth guide to help business owners have a better understanding of business loans and find the best small business loan for them

This Toptal article contains more strategies to recession-proof your business.

Maintain your personal credit. Or work to improve your score if it is low. Small business loans are often the first to disappear in hard times. You’ll stand a much better chance of being able to borrow money and keep your business afloat with good personal credit.

Modify your business practices

During a recession, your tried-and-true methods of doing business may no longer be enough. Use this time to implement new practices to help your business survive and thrive.

Build your email list. Your email list is essential for increasing cash and sales. Using it to communicate directly with clients is the easiest way to generate cash. Sales and gift certificates can bring in money quickly. If you’re in an industry that doesn’t allow online sales, offer your clients specials from related industries. For example, a realtor might be able to arrange discounts from landscapers in exchange for referrals or affiliate fees. The larger your list, the greater your ability to leverage it for revenue. 

Need some ideas to build your list? Here are a few to get you started: Offer incentives to sign up, including discounts, downloadables, or items of value. Have multiple ways for people to join your list. Include links on your website, podcast, and social media pages. Use linktr.ee (or a landing page with multiple links) in your Instagram bio. Invite visitors to signup for a newsletter. Constantly build your list. 

Create more revenue streams. A small business can try new things with minimal financial commitment. For example, if you are a candle maker and typically just sell candles, expand your offerings. Sell candle making kits or products. Offer candle making classes. If you are a writer, add editing or researching services. Also, expand the platforms where you sell your products to include sites such as Amazon and Etsy. Make use of social media in addition to your website.

Create more ways to accept money.  Offer less expensive products or reduced services. Clients may have lower budgets to work with during a recession, but still need your help. Make it easier for them to hire you by getting creative. Offer service bundles to reduce costs. Barter services or products. Spread your fees over multiple payments to make your services more affordable. Try to avoid sending your clients into collection by establishing a payment schedule that works for both of you. 

Don’t forget to keep an eye on your competition. Watch their ads, sign up for their email lists and follow their social media pages. Watch for qualities that separate your business from theirs and offer something they don’t. 

The Small Business Advantage

As small businesses, we can change the way we do things quickly and relatively easily. Use that to your advantage! Think about small and large changes you can make to help your business survive - it’s ok to think outside the box! The key is to operate with lower expenses while finding a way to provide value to customers or clients. Here are a few ideas:

Take advantage of quick time to market. Small businesses have the flexibility to go to market fast, while larger businesses often require more time. Take advantage of this and get your products on the market first. With quick turn times and social media ads, your new products could be for sale within days. 

Collaborate with others. Often small business owners have friends who are also small business owners. Support each other and collaborate. Look for ways to sell related products or services together. If you’re a masseuse, collaborate with an acupuncturist friend to sell a bundled service package. Sell a candle and meditation CD package. Refer your clients to other small businesses and ask the small business owners to do the same for you. Get creative.

Create a marketing bloc. Co-market a group of businesses together. Commission blog articles that feature multiple products. An article about relaxation might feature a massage therapist, meditation practitioner, bath products, and candles. When all of these businesses promote and share it, the article has much greater reach. Different businesses can search for commonalities. Are you both businesswomen that excel at marketing? Go on a podcast together and share marketing tips or write an article about marketing together and use both of your businesses as examples. Expand the reach of your marketing while reducing your portion of the expense.

Share expenses with other small businesses. Forego a pricey lease and join a co-working space. Share an office with others. It’s easy to share office space expenses, but don’t forget about the small things too. Share monthly subscriptions such as Canva whenever possible. Get on the same cell phone plan. Find ways to get economies-of-scale pricing even as a small business.

Conclusion

Since you’ve set your company up for success, you may find opportunities to help others who were less fortunate. Can you buy their customer lists? Their domains? They may have left a vacuum in the market that your business can fill. Perhaps you can add their product or service to your menu, or hire them part-time as your business picks up. Remember to operate in kindness and compassion and find a way to build your business while helping those around you.

Finally, keep a positive attitude! Your attitude can make or break you. What we focus on increases and creates our reality. Look for creative solutions and ways to strengthen your business instead of reasons to fail. 

This is one of the best times in history to own a small business. Technology, multiple sales platforms, and your own creativity can help you to be first to market. Embrace this time to make your business stronger!

Listen to Renee’s Recession-Proof Your Business Podcast here!

Renee Spears is a Law of Attraction Coach & Mentor, Spiritual Advisor, and Host of The Abundology Podcast. Learn more here.