Although the Chancellor confirmed in this year’s Spring Budget that there won’t be a recession, it’s still worth thinking about how to recession proof your business.
A recession is a shrinkage of the economy. This means less economic activity and decline in income, employment and potential business.
But there are things you can do to prepare and cushion some of the impact your business may feel. Here are 11 ways your business can recession-proof itself.
Seek ‘recession-proof’ clients
While no industry is completely safe, there are some that are safer than others. These include healthcare, government contracts, education, the food industry and transportation. These are things we always need, therefore these industries are likely to take slightly less of a hit.
Foster client loyalty and encourage referrals
It’s cheaper to keep a client than to take on a new one. You could consider creating a referral scheme with a monetary reward when clients refer new leads.
Retain your core team
Keeping your current team members is also cheaper than finding and onboarding new ones. Instead of looking at cutting salaries or employee business which can undermine relationships you’ve worked hard to build, think about maximising your current processes and finding ways to take on more clients.
Offer low-risk, high reward services
You know what you’re good at and which of your services sell the best. Focus on those during tough times, and keeping your head above the water.
Operate within a budget
Each of your business areas should have a budget. These might shrink slightly during a recession, but ensure with whatever operations are continuing there is a budget in place.
Track marketing and sales KPIs
You need to track the conversion rates of your sales efforts and marketing efforts. You want a high conversion rate, meaning your efforts are usually more fruitful than not. If you’re not tracking KPIs yet, consider doing so.
Be patient
Lots of businesses go out of business during recessions. Your focus during this time shouldn’t be growth, it should be just surviving.
Knowing your liquidity options
Know where your business can access cash quickly when you need it. Do you have a savings pot? Do you have liquid assets you could sell off? Or do you have personal savings you can temporarily loan the business?
Pay down debt
This applies to not only times of recession but anytime. If you have debt, pay it off or put in place a plan to do so. This means you’ll be in the best position possible when entering a recession. And you’ll be more likely to have access to credit if you need it.
Reduce overheads
Consider where you can cut back on monthly outgoings. The first place to look is subscriptions you no longer use, contractors you have on retainer you no longer really need, and memberships you aren’t using.
Nurture campaigns
What can you do to show your clients they should keep using you? Maybe you could offer them a free trial of a service, or a free gift. Or a free helpful guide. This will help with nurturing those relationships.
