Ever wondered how to survive a recession? Did you think that was even possible? Not only can you survive a recession but you can also benefit from it whether the market slows down or falls into a deep recession. How you manage your workforce, debt and decisions can make all the difference. In order to accomplish this, companies must be flexible and willing to adjust. Join me as I share my personal experience, tips I implemented for my business and how I was able to double our revenue during the last recession.
An emergency fund should be a cushion you have that will help you stay afloat for a few months. Whether it is used during a recession or unexpected emergencies. Total up your monthly expenses and multiply that by the number of months you would like your fund to cover.
$1,000 monthly expenses
x 6 months
$6,000 would be the amount you need to for your emergency fund.
I reduced thousands of dollars by reducing and consolidating my business subscriptions. You will come to realize that you may not have used a percentage of your subscriptions but were paying for them either way.
Start by looking at subscriptions that are similar and keep the one that your company has used the most. For example, we’ve used Miro and Lucid Chart, I find Lucid Chart more beneficial to my business. There is no reason to have 2 subscriptions that are similar.
Next, look through the more expensive subscriptions and figure out which you can live without for the time being.
Automating your business reduces the number of mistakes made. You don’t have to rely on an employee to fix these mistakes. Automation can be more efficient and reduces the manpower spent on certain tasks which then saves you money.
Create two lists of vendors, on one list the vendors that bring you the most value and the other a list of vendors that are mediocre or not that good. Contact the first list of valuable vendors, be honest and talked to them about your fears of a recession. Renegotiate your agreement from a point of trying to preserve cash in your company to survive the recession not because you’re being cheap.
Your second list should be used to weed out the vendors that need to be replaced. There’s no doubt that you can find someone else with the same product/service at a cheaper rate.
People tend to not pay what you are owed after the market has gone down. Tackle accounts receivable before the market goes down.
Collect as much money as possible, one trick of collecting money is by giving clients some kind of benefit, a small discount that you will provide on the next purchase.
Expansion plans will be connected to partnership agreements with people that don’t cost you any money or make use of your existing manpower. For example, when we need to fill our employees time, we make use of that time by creating Zoho extensions. Our employees can generate products that will be sold to the marketplace and of course make money immediately.
Talking about a recession with your employees seems a bit taboo. In my experience it seems like the best practice. Employees may already have a sense of what is going on by the lack of workload. Not acknowledging this can affect productivity. Level with them on the company’s future and what the plan is moving forward. People don’t want to lose their jobs, being honest with them will motivate them to utilize their time in an effective way.
You can learn about more tips and recommendations on how to survive the next recession in the below video:
Useful resources: Izik Academy | Videos | Tools for your business