7 Proactive Steps to Take as We Anticipate a Recession
How do we pivot right now? How do we sustain and keep growing if the whole world shuts down? How do we survive if we slip into a recession?
Valid questions, no doubt.
As a long-time entrepreneur, I’ve for sure had ups and downs in the businesses I’ve created including the all too familiar 2008 recession.
It tested my ability to support my marketing agency, it created tension for our clients, it basically altered the rules of the game completely, and we very quickly learned that if we kept playing the original rules, we’d lose the game altogether.
We’re sitting on the fence right now as an economy, but that doesn’t mean you and I can’t be proactively preparing for the next four, six, twelve months of what might be a very different playing field.
I didn’t do everything I should have in 2008.
But if you were asking me what I SHOULD have done, that’s a different animal.
I asked Jason for his thoughts on this issue. Together, we came up with seven steps that have served us well as we’ve grown and can help all of us as we head into the unknown.
7 Proactive Steps to Take as we Anticipate a Recession:
- Be flexible with existing customers – Show through advice and service offerings that you’re in it together. That could mean adjusting payment plans, schedules or any agreement you have in place.
- Don’t reduce pricing – I know, you’re clenching your teeth. But hear me out: it will crimp your margins and hurt your cash flow. You’ll create longer-term damage that will follow you out of a recession and diminish your profits down the road.
- Protect available cash – Use credit cards to handle monthly expenses. Pay partial/minimum payments in the short term. Use credit lines to cover your operational costs (they’re cheap) as you can expect slow pay from the market. Work on terms with existing customers – slow pay is better than no pay or seriously reduced pay.
- Evaluate non-essential expenses – This one should be obvious and already underway. One pro-tip is to cancel credit cards. When you get the reminder/requests for payments from all those subscriptions you buy, only renew the essential ones. You’ll find some things you’ve been wasting money on here for sure (re-think your company Spotify accounts, unused licenses on cloud services like Adobe, Dropbox, or project management platforms).
- Accept short term thinking – It’s not natural (hopefully), but at this exact moment, heat of battle/fog of war is intense. We don’t know the severity, impact or longevity of the current reality. Until we do, long-term thinking becomes difficult. Have a plan for what you’ll do on the other side, but manage like it’s a series of short terms to build the bridge to get to the other side.
- Re-evaluate everything – You probably have the time, use it to think about what’s really crucial to your business’ survival while still staying in alignment with your company values.
- Innovate – Look for opportunities everywhere. Lots of small businesses are born in recessions or end up stronger on the other side. Think Groupon, Domino’s Pizza, Amazon, and (believe it or not) the Snuggie. Find a problem you can solve and tackle it. Ask your team and customers what’s missing that you could be helping them with. Erase the whiteboard and start clean.
We’re not going to do it perfectly, but we can make it with the right approach. Let us know if we can help as we navigate this new challenge together.