Recession Proof Your Business

As the threat of recession continues, business owners are looking for cost-efficient ways to help them continue business continuity, even thrive during a market turndown.

While you can’t predict the course of a recession, there are steps you can take to navigate and keep your company on the right path:

1. Manage cash and costs – diversify income streams and conserve cash. Companies with low debt, good cash flow and a strong balance sheet are well positioned to withstand a recession. Engage experts who can help you assess and improve financial performance and also control costs. Look at reducing expenses by negotiating with suppliers or outsourcing services. Additionally, businesses can focus on engaging with their customers and looking at ways they can diversify their customer base or provide value-added services to retain business
2. Focus on employees – your greatest asset. Even while focusing on the bottom line, business owners should have a people-focused strategy. While reducing headcount might be a necessary step, it’s really a short-term solution that can be expensive in the long run. Consider prioritizing employee retention and engagement. Invest in professional development, reskilling and upskilling to help fill gaps and motivate employees to learn, grow and excel during challenging times. A Gallup poll finds that organizations who invest in employee development report 11% greater profitability and are twice as likely to retain employees.
3. Increase operational efficiencies – Simply put, inefficiencies in business operations not only cost you valuable time, but they can cost you revenue. According to market research firm IDC, companies can lose as much as 30% in revenue annually due to inefficiencies. And during a recession, most businesses can’t afford the loss. For business owners that wish to keep the focus on their overall business strategy, outsourcing operational resources. Business owners have a lot to manage, and a PEO (professional employer organization) acts as a small- or medium-sized business’s “back office” team, offering payroll processing, bookkeeping, HR support, 401K, insurance, worker’s compensation, employee onboarding, benefits administration, insurance options and more. Especially during challenging times, easing unnecessary burdens of business ownership with outside services results in higher business survival rates, growth rates and employee satisfaction, as well as lower employee turnover.

Regardless of the economic climate, business owners should plan ahead to lower risks and overcome challenging times.