Inflation is creating challenges for both consumers and businesses alike, and a looming recession could compound these problems even more. Entrepreneur Corey Shader says that as consumers continue to tighten their purse strings, small business owners may be looking toward the future in a “doom-and-gloom” manner.
Even with potentially challenging times on the horizon, though, there are things entrepreneurs can do to help their small business weather the storm. Below are some tips for surviving a recession as a small business.
Build Cash on Hand
A business’ cash reserves are akin to a family’s emergency fund. These “rainy day” funds can serve as extra help if major changes happen with cashflow, which often occurs during a recession.
Every business needs money on hand. Just because sales slump or collections slow doesn’t mean your bills won’t come due the same every month.
Building extra cash on hand is essential for any small business owner, no matter the economic climate. While it’s ideal to dedicate extra money to cash reserves over time, there’s never a time where it’s “too late” to do so. Even with inflation here and a recession looming, you can still set aside extra money in case you need it.
Focus on What You Do Well
One of the most effective strategies for surviving a recession is focusing on the things that you do really well, and putting extra effort into them.
What are the core competencies of your business? What products and/or services can you deliver at a high level consistently and that are most likely to sell even in an economic downturn?
Answer those questions and focus heavily on them during a recession. This may require you to put aside new product launches for a bit, but that’s OK. The goal is to weather the storm and be in a solid position on the other end.
Always Market Your Business
Many small businesses immediately cut back on marketing during a recession. A main reason for this is that marketing can be expensive — both in terms of the money it requires and in terms of the time it takes.
This is one of the biggest mistakes that entrepreneurs make. Even during recessions, it’s important to stay in front of your customers.
Luckily, there are many ways you can do so today without much out-of-pocket costs. You can take the time to deliver weekly emails that provide helpful information and don’t just sell your products. You can run contests and create other interactive content on social media pages to engage with your customers.
There’s almost no end to how creative you can be with your marketing, without outlaying a bunch of cash to do so.
Pay Extra Attention to Existing Customers
Corey Shader points out that it’s always more cost-effective and efficient to retain a customer than it is to attract a new one. So, while you may be thinking that it’s essential to attract new customers during a recession, the better approach is to pay extra attention to your existing customers so they remain your customers.
Try to build real connections with your customers now, before the recession officially hits. Sympathize and empathize with them and their challenges. Tell them how much you value them as customers, and show it to them in multiple ways.
Your customers will appreciate this effort, which will lead to them sticking around and spreading the word about how great your business is.
About Corey Shader
Corey Shader is a self-made entrepreneur, consultant, investor, real estate developer, and founder of several companies, notably Insurance Pipeline. Operating primarily out of Ft. Lauderdale, Corey’s endeavors span across the nation, consulting for start-ups, and sitting on the board of digital media and senior healthcare agencies. As a consultant, Corey helps young businesses develop sales funnels and maximize profitability. Shader takes pride in challenging others to push themselves to be their very best — he believes in constant self-improvement, inspiring others through sharing his own life experiences.
