Succeed During Downturns with These 4 Proven Tips

Just this summer, we were discussing how growth was challenging small business. A few bad policy decisions, and bam, now, we are looking at the real possibility of a downtown. But there are ways to succeed, even during a downturn.

Unsure of how to take your business from good to great? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

1. Keep Cash on Hand

Make sure that you have enough cash on hand to cover two months of expenses. You should plan to have enough access to cash to manage a slump in sales. In truth, it is unlikely that you will have two months without revenue. If you avoid wasting your reserves, you are buffering yourself against a revenue shortfall of up to 16.67% of a year. This gives you enough to remain successful during an economic downturn, plus a bit more to pursue opportunities as soon as the storm breaks. 

2. Choose Your Customers Wisely

The last Recession still has effects that are hitting America over a decade later, and a new economic downturn could be just as bad

It may seem counter-intuitive to become more selective in a downturn. But, if you issue any credit, e.g. get paid after the service is provided, you need to make sure that the business you take on isn’t going to stiff you with the bill. It may be tempting to take all the business that you can during a downturn, but if your prospects aren’t serious, well-funded, and/or managed, it is a risk you need to be willing to take in order for success.

3. If Possible, Shift Your Mix into More Countercyclical Areas

While we don’t recommend waiting until you’re in trouble to hire a consultant, the reality is, most people don’t seek help if they don’t believe they have a problem. Therefore, our type of work tends to be somewhat countercyclical. Are there areas in your business where you can focus that are more recession-proof?

4. Don’t Be Afraid to Grow During Downturns

In every downturn, there are still industries that are successful. As long as you have a buffer, as discussed previously, it’s smart to invest if a strategic opportunity or hire comes along. There are plenty of bargains to be had if you are in a position to acquire them.

An economic downturn hitting the country might really change how our country is looking in 2019

Why Planning for a Downturn Will Help you Be Successful

We don’t know what will be happening throughout the rest of the year, or if a recession is likely. In the long-term, it is hard to say what will happen. But if you can keep a hold on your money and be aware of how to prevent issues before they happen, you make be able to get away safely.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

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