It can be hard to predict exactly when the next recession will happen. But, business expert Corey Shader says there are things business owners can do every day during an economic downturn.
If you want to build a sustainable business, there are going to be challenging times that you’re going to have to overcome. As such, building a recession-proof business is essential, and the sooner you get started on doing so, the better off you’ll be.
Below are four survival tactics for good times and bad times.
Recessions and other tough economic times affect different businesses in different ways. Just look at the COVID-19 pandemic. While many restaurants/bars and the travel/tourism industry were decimated, one general industry that excelled was e-commerce.
Forced to remain in their homes, consumers increasingly turned to the internet to not just do their ancillary shopping, but also to have their day-to-day essentials delivered.
The lesson that can be learned here is that the more diverse your business is, the better it’ll be able to survive tough economic times. This can include offering many different products and services than span multiple sectors. Or, it could mean offering consumers many different ways to connect with your business to make purchases.
2. Be Flexible
To use the example of the pandemic above, there were some businesses in hard-hit industries that found a way to not only survive by thriving. Those that were able to do so we’re flexible and shifted paths quickly.
Restaurants that were forced to shutter their doors to patrons shifted to a takeaway and delivery model to stay afloat. Some of these that never offered these services before created entire new revenue streams that they decided to implement as part of their long-term plans post-pandemic.
You’ll never know what will be needed in the next recession, but you can plan for it by creating a flexible mindset and nimble structure. The more rigid you are, the harder it’ll be to change course quickly.
3. Build an Emergency Fund
A well-stocked emergency fund is just as important for businesses as it is for individuals. When times get tough, it’s likely your business will experience a disruption in cash flow. This can be due to a drop in sales or a longer-than-normal collection process.
If you have an emergency fund with a few months’ worths of expenses in it, you’ll be more easily able to withstand the challenges this presents without having to take on additional debt. This will help you weather the storm and exit out the other side in a better financial position.
4. Never Stop Marketing
One of the first things that many businesses cut back on during challenging economic times is marketing. It may be an easy line item to cut, but Corey Shader says this is a mistake.
Businesses should never stop marketing their services, even during a recession. In fact, marketing becomes even more important during tough economic times. You always need to remain in front of potential customers and communicate to them why they need your products or services now more than ever.
Instead of cutting your marketing efforts, refine them so they reflect the current economic times.
About Corey Shader
Corey Shader is a self-made entrepreneur, consultant, investor, real estate developer, and founder of several companies, notably Insurance Pipeline. Operating primarily out of Ft. Lauderdale, Corey’s endeavors span across the nation, consulting for start-ups, and sitting on the board of digital media and senior healthcare agencies. As a consultant, Corey helps young businesses develop sales funnels and maximize profitability. Shader takes pride in challenging others to push themselves to be their very best — he believes in constant self-improvement, inspiring others through sharing his own life experiences.