Recession is a scary word for all business. But, it’s particularly worrisome for small and local businesses who may not have the same financial cushioning as multi million dollar companies.

Many Economists are saying a recession is coming, while others say that the Recession is already here. In either case, everyone must develop a strategy to recession-proof their Small business, and they should do this now.

As the economy takes a deeper dive, it will be much harder for them to timely respond and keep their business afloat.

Recession Impact on Small Businesses

U.S. small businesses have impressive numbers in the aggregate. Defined expansively as those with fewer than 500 employees, they accounted for 43.5% of U.S. GDP in 2014, though that was down from 48% in 1998.3 Those with fewer than 100 employees still accounted for 30% of U.S. wages and 35% of employment from 2012 through 2016.4

Here are five strategies to Help Small Business Survive a Recession.

DON’T STOP MARKETING.

During a recession, more than ever, it’s important to do whatever anyone can to stay top-of-mind for customers. Despite the financial hardships they may be experiencing, be sure to budget funds for marketing and the cost to create a strong online presence and do their best to stay in front of their customers. 

Protect cash flow

Recessions lead to slimmer profit margins; which can make maintaining a healthy cash flow tricky. So, let’s get uncomfortably real for a minute.

If the cash flow dries up, that’s likely the end of business. So, to survive a recession, it’s essential to plan ahead for ways to cushion the cash flow.

Assess the business’s health

In the months leading up to a recession, consumer spending and available capital can both decline, which can cause a business to feel a pinch in their budgets.

This means some difficult decisions may have to be made regarding product pricing, marketing initiatives, hiring, benefits and even new launches. 

Double-down on the best customers.

Most small businesses are seeing new businesses dry up. This slowdown in new business alone is bad enough for any small business owner, but the loss of the best customers will be nothing short of catastrophic. Call, email, or send a card to the best customers. 

We have always emphasized the importance of having a good website for your company because it can act as your best tool for marketing and sales. A poorly designed website can repulse people from your business and can cause you to lose customers before you even have them. Get in touch with HyperEffects to work on creating, enhancing, and making the website of your company more user-friendly.