A strong, well-built business can withstand most economic hardships. A business owner who has been around for a while knows how to keep things growing even when things get lean. New entrepreneurs can sometimes overlook common practices that would help to solidify their business, especially during lean, economic times. If you know your company and how it operates, you will have a good idea of what it will take to recession proof your business. There are several steps you can take to start.
Control Your Cash Flow
Keep a close eye on your cash flow. Know where money is being spent and look for ways to save. Install a smart thermostat in your office to make sure your HVAC system runs as efficiently as possible. Make a flow chart that goes along with your budget so you can maximize the potential of your revenue. Have a solid plan in place when it comes to keeping your budget on track. Follow trends in the economy and act accordingly.
Increase Your Number of Revenue Streams
The key to being successful is to have more than one way of making money. If you have a physical store front, start to sell online. Expand your product line and target a larger audience. Having multiple revenue streams will ensure money continues to come in even if one or two of your streams slow down. When the financial outlook is good, having multiple streams will allow you to increase your profits and prepare for the future.
Solidify Your Client Relationships
Don’t let your current client relationships because you are trying to bring new clients into the fold. Solidify your current client relationships by providing quality customer service. Make it easy for your current clients to get what they need. If you build a relationship on trust and reliability, your client will appreciate your willingness to make things work. When both of you are able to succeed, your clients can be your best advocate and your best marketing tool. Word of mouth is the best type of advertisement and it’s free!
Build Your Business to Survive Without You
While you are building your business, you shouldn’t allow it to revolve around you. Build your business so that you can sell it and it will still be successful. You may not ever choose to sell it, but if there is ever a time that you are unavailable, you want the business to be successful until you return. Put systems in place so that other members of management can run your business and keep it productive while you are away.
Add a layer or two to your business. If you own a bakery and are known for all of the pastries, doughnuts, and other tasty treats, how about adding a line of gourmet coffees, teas, and shakes. This gives you an added draw for your business. Those who come in for doughnuts will buy coffee and vice versa. You double your audience and still maintain your primary mode of income.
Obtain Financing Before It’s Necessary
Don’t wait till you hit hard times to try and get a small business loan. The best way to recession proof your business is to have a line of small business funding already in place. If you already have funding available, you can use the extra money to keep your business operating even in the most dire times.