Seven Ways to Recession-Proof Your Allendale, MI Small Business
While no one can predict the future, there are steps small business owners can take to recession-proof their companies. From reconsidering your business designation to updating your marketing campaign, taking proactive measures now can help you weather any potential economic downturn. Keep reading to learn seven ways you can recession-proof your small business courtesy of the Allendale Area Chamber of Commerce.
1. Consider Changing Your Business Designation
One way to save money and reduce your overhead costs is to reconsider your business designation. If you're currently operating as a C-corporation, converting to an S-corporation or LLC can help you save on taxes. Consult with your accountant or financial advisor to see if this is a viable option for your small business.
2. Make Layoffs a Last Resort
In the event of a recession, many businesses are forced to lay off employees in order to cut costs. However, this can do more harm than good in the long run. Not only will you lose valuable team members, but you'll also incur the added costs of training new hires once the economy improves. If possible, try to avoid layoffs by reducing hours or implementing a hiring freeze instead.
3. Cut Back on Spending as Much as Possible
One of the best ways to recession-proof your small business is to reduce expenses and lower debt. Take a close look at your budget and make adjustments until you have a new one. This is your recession budget, and you must stick to it. You may also want to consider refinancing any high-interest loans or lines of credit you have in order to lower your monthly payments. Reducing expenses and lowering debt will help improve your bottom line and make your small business more resilient in the event of an economic downturn.
While you’re reviewing your budget, also review your organizational system. Paper and filing cabinets take up a lot of space and they are difficult to search. Digitizing your records makes them searchable and accessible from anywhere if you file them in the cloud. Once you figure out how you want to divide up your records, then just split them into separate PDFs so that the appropriate content goes in the right file folder. Then, you’ll be able to get a better sense of your income and expenses, which will help you keep your budget up to date.
4. Adjust Your Marketing Campaign Appropriately
In times of economic uncertainty, it's important to update your marketing campaign so that it resonates with consumers who may be tightening their spending habits. Focus on creating content that is helpful and informative rather than promotional in nature. You should also consider reducing your marketing budget and reallocating those funds towards more cost-effective channels like social media marketing or email marketing.
5. Expand Your Offered Goods or Services to Bring in More Money
Creating new revenue streams can help offset any losses you experience during a recessionary period. If you don't have any additional products or services to offer, consider diversifying your customer base by selling to new markets or partnering with other businesses in complementary industries.
6. Get Paid Faster with Automated Invoicing Software
Automated invoicing can lead to faster payments, which is crucial during an economic downturn when cash flow is tight. By automating your invoicing process, you'll free up time so that you can focus on other aspects of running your small business. In addition, automated invoicing can help reduce accounting and administrative errors, which can save you money in the long run.
7. Review Your Insurance Coverage
Finally, it's important to review your insurance coverage to make sure that you're adequately protected in the event of a recessionary period. This includes everything from property insurance to liability insurance and even health insurance for yourself and your employees. Make sure that you're not overpaying for coverage by shopping around for the best rates and comparing quotes from different providers.
Act, Prepare, and Persevere
By taking some proactive measures now — like reconsidering your business designation, reducing expenses, and automating your invoicing — you can help ensure that your small business weathers any potential economic downturn. And put some practices in place, like using PDF editing tools as you reorganize, so you can keep accurate tabs on your finances and make adjustments along the way. So stay calm, prepare, and keep moving forward.
If you’re ready to grow your business with the help of great local resources and partnerships, join the Allendale Area Chamber of Commerce.
This Hot Deal is promoted by Allendale Area Chamber of Commerce.