What processes or systems have you put in place at your company to be prepared for potential economic downturns? What recommendations would you give to other women business owners to help them prepare for a recession or other economic turmoil?
Founder, Coaching Financial
We work with hundreds of businesses by managing their business and health insurance plans plus monitoring retirement plans. Our clients' regular feedback indicates the potential direction of the economy. A question that is always asked in both good and bad economies is: What would happen if you lost 20 percent of revenue because of unforeseen changes? Anticipating a reduction in revenue helps to plan going forward. Anticipated recessions means that we must be prudent with discretionary expenses and must continue to build a sinking fund.
Businesses should make sure they have a line of credit in place or ask about increasing it. Explore premium reductions in many insurance products like business or health insurance. Small business owners should consider what type of retirement plan is best – especially if they want to access capital, for example, through a 401k loan.
One move that a business owner should hesitate on is cutting expenses for sales and marketing that are currently working. Keep employee turnover low. Keeping your good employees through tough times will help the business tremendously when the economy turns around plus it keeps expenses consistent.
Founder, CEO & Queen Bee, Big Buzz Idea Group
My business philosophies have always been the same for my company and our clients. The three core principles for growth and sustainability through any conditions are:
- Manage your expenses tightly. Yes, you have to “spend money to make money,” but do your due diligence to ensure that you are getting the best rates and value for your dollar.
- Diversify your revenue streams. By having multiple clients, multiple products and/or multiple service offerings, a business owner is more likely to survive any unexpected surprises in a single account/product/service line.
- Always be on the lookout for opportunities! I was advised once to ensure that we continued marketing our company during any downturns in the economy. This allows businesses to utilize these times to position your business for growth as soon as the market turns around.
Part of looking for opportunities is also looking for new services, products or partnerships. Think creatively and open yourself up to possibilities. Some of the best ideas come out in times of necessity.
I learned about these three principles early in my business, and I truly believe that they are the reason we successfully survived the 2008 recession and the pandemic.
President, Richards Graphic Communications
Our family is entering its 98th year in the printing business. There are several reasons we’ve lasted this long, but one of the principles that our dad instilled in us was “never put all of your eggs in one basket.” You need diversified streams rather than having most of your revenue coming from a handful of clients. When times are great, it’s easy to sit back and relax, but this can be very dangerous to your survival.
Why? If you only have a few clients and lose one, or if they are all in one sector that hits a rough patch, you can easily lose a majority of your revenue. This has happened to us so now we consistently work to find major clients in different industries. That way, we understand their goals and can provide innovative solutions, but we won’t be caught as flat-footed if one of these areas collapses.
Recessions and economic turmoil are a fact of life. Prepare as well as you can.
Owner and Maker, tori grace outfitters
Many of us experienced huge growth and sales in 2022. How can we carry that into 2023 with a possible recession looming? I am reducing costs and launching new products while constantly evaluating my line to determine what is selling and what might not be of as much interest as previous seasons. I love making new merch and adding more options for my customers, but I would say it’s more important to know your numbers and be prepared to cut costs and always be ready to pivot. tori grace outfitters celebrated our 15th anniversary this past summer and we are excited for many more years of growth and creating.