Inflation and recession. Words you hear everywhere right now. Where does this leave you as a business owner? How do you prepare for the uncertainties ahead?
Don’t let the news run your business. Listen, but learn to apply this to your specific situation. Not every business is in the same position, and not every business will need to do the same things or be affected by future events in the same way. Figure out what YOUR business needs and how to run it so you can thrive in all environments. Also, depending on where you live and who your customers are, you may be less affected by the ups and downs.
Here’s some advice we have for business owners:
Having cash in the bank will allow you to maneuver and take advantage of changes in your business. Controlled and thoughtful spending will help not only preserve cash but will also benefit your business by making the right strategic purchases. Focusing on making a profit and not just revenue will help to make this a reality.
Pay down debt.
Sounds a little counter-intuitive when we’ve just said cash is king, but it’s time to balance the two. If you have a line of credit, your rates have already gone up and will continue to do so. Borrowing money at 2% vs 7% or 8% makes a big difference in your bottom line. Don’t close your Line of Credit, just get the balance down. Keep it as an option if really needed later. Also remember, your bank can generally call your LOC at any time. When this happens, it’s usually at the worst time for your business, and having to pay that all back within 30 days can bankrupt you.
Nurture your employees.
Keep the ones that are a good fit and replace the ones that are not. It’s said you should hire slowly and fire quickly. Paying attention to your employees will help with their loyalty and their work. Keeping the good employees you have can be a huge cost saving - with no training of new employees, more efficient work done, and often better quality work. Make your business the place they want to spend their time. Help them be passionate about what they do - and what your business does.
Choose the right strategies and what you sell.
In times of plenty and calm, it’s easy to create strategies and products for sales and spending without really worrying about the consequences. When times are tough, every decision seems to matter. Instead, what if even during the good times and times of growth, you evaluated your decisions and chose wisely? This could put you in a much better position to weather whatever storms come your way.
The future is always unpredictable - and there may be rough waters ahead for you and your business. Like a Boy Scout…Be Prepared!
Need help preparing or navigating? Reach out to us.