The U.S. government has confirmed two straight quarters of economic decline. Six months of contraction is generally considered the start of a recession. Where does this put small business owners who are already stretched thin?
Here are six suggestions as you build your small business’ recession response:
Don’t be afraid to color outside the lines when it comes to sales, conversion, and retention: Try offering some less expensive options to keep clients on board or see what you can do to creatively increase foot traffic (ex: a fancy DIY coffee bar). When times get tough, we do what we must!
Use a portion of profits to beef up emergency savings: I’m a big fan of the Profit First formula in which you deduct profit from each sale and use the remaining amount for expenses. Put a portion of monthly profits towards a long-term emergency fund that will pad your business when the unexpected occurs.
Do a thorough review of expenses to become as lean as possible: Do you have duplicate licenses for digital communication tools like Zoom or Slack? Can you temporarily replace any tools you’re using with free trials? Review your expenses on a regular basis to see how you can cut corners.
Optimize your best resource – your employees: We love our employees, but human errors and inefficiencies create unnecessary business costs. Training and coaching help as well as ways to cost-effectively automate manual processes.
Take a deep breath and remember that this too, shall pass: Economic downturn is a natural part of life and business. You’ll get through this, just like every other hardship your business has encountered.
We’re in this together. Don’t hesitate to reach out if I can provide any support from one small business owner to another!