Get Ready: Top Tips to Prepare Your Federal Way, WA Business for the Recession
It's important for small business owners to always be thinking about ways to protect their businesses from economic downturns. While you can't control what happens in the larger economy, you can control how prepared your business is for a recession. Here are some great methods courtesy of the Greater Federal Way Chamber of Commerce for preparing your business for the storm ahead.
Focus on Staff Retention
As the economy continues to sputter, many businesses are bracing for a recession. To help navigate the downturn, it's essential to hang onto your key employees.
First, be upfront about the financial challenges your company is facing. Employees will appreciate your honesty and will be more likely to stick around if they know what to expect. Second, offer flexible work arrangements wherever possible. This could include things like telecommuting or reduced hours.
Third, focus on employee development. Investing in your team will show them that you value their skills and experience. Finally, don't forget to show your appreciation. A simple thank-you goes a long way toward making employees feel valued.
Lower Costs and Debt
One of the best ways to recession-proof your small business is to reduce your debt and cut expenses. During a recession, businesses tend to tighten their belts, and that means less money flowing into your business.
To reduce your debt, consider refinancing your loans or lines of credit at a lower interest rate. To cut expenses, take a close look at your budget and see where you can trim the fat. This could be cutting out underperforming products, limiting business travel, offering remote work days to reduce energy usage or even moving your location to a less expensive office space.
Now might also be a good time to reorganize your filing system. If you’ve been relying on paper and file cabinets, consider scanning and digitally filing your receipts, invoices, and other documents. Not only will they take up less space, but they will be searchable. You can delete specific pages from the PDF file if you want to organize your information differently. Just place the divider lines around what you’d like extracted, and save the newly created file.
Automated Invoicing Can Boost Payment Turnaround
Another way to recession-proof your small business is to automate your invoicing process. This way, you'll get paid more quickly and have a better chance of weathering a cash flow crunch during a recession. Quicker payments will also help you keep up with your own bills and obligations. There are plenty of invoicing software options available, so find one that fits your needs and budget.
Update Your Business Designation
Many businesses choose to operate as sole proprietorships or partnerships because it is less expensive and simpler than forming a corporation. However, there are some situations where it may make sense to change your business designation to a corporation. One key advantage of incorporating is that it can help you save money on taxes. In addition, incorporating can also offer liability protection for your personal assets. If you are considering changing your business designation, it is important to speak with an accountant or attorney to ensure that it is the right decision for your business.
Tweak Your Marketing Campaign
An outdated marketing campaign won’t do much good during a recession—in fact, it could end up costing you more money than it brings in. If you want to recession-proof your small business, make sure your marketing campaign is current and relevant to today's consumers. This includes things like updating your website design, revamping your social media presence, and creating targeted ads that speak to people's needs during tough economic times.
Offer New Products or Services
A great way to prepare for a potential recession is by creating new revenue streams for your small business — this way, if one stream dries up, you still have others to rely on. Diversifying your products or services is one way to create new revenue streams, or you can start offering subscription services or memberships that provide valuable content.
There's No Shame in Frugality
With a potential recession, it pays to be frugal with your resources. This means making wise decisions about how you spend money and also how you use your time. Being frugal does' t mean being cheap — it means being smart with the resources you have so that you can save money and put it toward things that will benefit your business in the long run.
Plan for the Future
No one knows when the next recession will hit, but by taking some proactive steps now, you can ensure that your business is well-prepared when it does. Think through how you can value your employees while cutting costs, and take this opportunity to reorganize your files using free online tools. Thinking through new marketing and ways to diversify your offerings can be stressful, but they can also be exciting. Plus, it will give yourself some peace of mind knowing that you've done everything you can to protect your livelihood.
Join the Greater Federal Way Chamber of Commerce to network with other local entrepreneurs and access valuable resources for helping your business grow.