Posted: Tue 1st Nov 2022
“Expect the best, prepare for the worst.”
With the "R-word" out there, the best we all can do is to focus on what we can control.
This article provides you with seven simple tips to prepare your business for a successful 2023.
How can a small business maintain its staff, continue hiring talent and reassure all existing and incoming employees they have job security?
Amid a recession, small businesses should be able to provide intangible perks, like flexible scheduling and other benefits that motivate staff beyond monetary compensation, and financially focused benefits designed to invest in employees.
Some perks could be:
A free session with your accountant or financial advisor
Time within working hours for online training courses
Longer lunchtime to allow a walk around the block
Lunch & Learn events (mortgage advice, health insurance, eye tests, etc.)
Now is not the time to shift your business model into something entirely new or higher risk. Also, it's not the time to eliminate driving revenue activities.
Use this time to focus on tasks directly driving sales.
Start doubling down on your core competencies: the products and services that have historically driven the most revenue for your business and have strong proof of concept.
If you haven’t already started, track the amount of cash flowing in and out of the business month-over-month. Revise business plans to update financial forecasts, look at whether pricing needs to change and update financial forecasts.
Small businesses in need of more cash may utilize a few strategies. Talk with your key customers and suppliers. Make sure they are paying on time. If possible, business owners may ask if suppliers might accelerate payments if given a better deal.
If your small business needs additional credit or you know due to seasonality you will experience some future pressures, prioritise this need now. Reach out to banks and credit card companies to secure financial support.
Finally, review any discretionary business spending in your company budget. If there are subscriptions you don’t use but still pay for? Reevaluate the purchases your business needs now versus nice-to-haves that may be put off until a later date.
Does your company have at least three-to-six months’ worth of business expenses in an emergency fund? Great! If not, start building this fund.
If you have, but you dipped into the fund and haven’t replenished it, use this time to pay yourself back and rebuild a sufficient cash reserve.
If you anticipate you’ll be scaling back your marketing budget in the event of a recession, now’s the time to review your marketing strategy.
Small businesses can leverage plenty of free marketing strategies, including guesting on popular, relevant podcasts, earning local media coverage and establishing themselves as thought leaders within their industry by guest blogging with relevant media outlets and writing and sharing content that resonates on LinkedIn.
Explore options such as building a recurring revenue model via subscriptions and diversifying client and supplier relationships.
Small businesses should focus their resources on products and/or services most wanted or needed by customers. This action will bring the most revenue, and the best margins, into the business.
Which relationships are among the most important to your business? Are these relationships with joint venture partners, suppliers or customers?
Identify key client relationships and work to strengthen them.
Send your key clients or customers a personalised note, call them on the phone or have a quick meeting together.
Use this time to tell them how much you value and appreciate their business, learn how the downturn is impacting them and find out how your services can help mitigate some of their current pain points.
Emphasis on strengthening these relationships may lead to continued business throughout a recession and referral opportunities.