Since the financial crash of 2008, the word “recession” has taken on a dark, even frightening connotation; and with good reason. Indeed, nearly three million people lost their jobs in the US between Jan. 2008 and Jan. 2009. What’s worse is that despite the economy’s recent boom, it’s quite possible that another major recession could be just around the corner. The harsh reality of the stock market means, eventually, business owners will have to deal with another economic downturn. With that in mind, make sure to check out these four ways you can prevent your company from buckling during the next lean period:
The more flexible your company’s products and services are, the better chance you’ll weather the next recession with minimal strain. Companies who rely on a single industry or customer demographic for their sales are always at a risk. This is because it’s impossible to predict exactly how a recession would affect any given group of people.
Naturally, all business owners dream of experiencing exponential growth when they found a start up. Who wouldn’t want to see their company’s stock skyrocket? Still, it’s unwise to get caught up in your own successes and fail to adequately plan for the future. In fact, growing too quickly could set your company up for a massive hit if a recession were to occur. Instead of operating under the assumption that your good fortune will continue perpetually, manage your business’s growth strategically. Hire freelancers until you’re able to sustain full-time employees and resist the urge to expand beyond what you can effectively manage. The companies that incur the biggest losses during trying financial times are inevitably the ones that are already spread too thin.
Build Meaningful Relationships with Customers
It’s unwise to discount the human element of any purchase decision. Yes, of course, an individual’s financial standing will influence their ability to buy a product. Still, companies that go the extra mile for their customers will often gain their trust and loyalty. Though most businesses will lose a portion of their customer base if a recession occurs, those with high customer-retention rates will avoid catastrophe.
Be a Pessimist
Though many entrepreneurs probably consider themselves optimists, sometimes pessimism pays off. In truth, there’s nothing wrong with saving money to prepare for the worst possible eventualities; ignoring potential problems is just plain irresponsible. Whether your company manufactures suspension culture flasks for state-of-the-art laboratories or offers basic web-design services, setting aside funds for a rainy day is always a wise decision.
Article Submitted By Community Writer