Nearly every business felt the impact of the last recession. Sometimes there’s just no escaping it. The root causes of the last recession were universal and had a domino effect.
Inverted yield curves, sluggish stock market and trade wars, there is no certainty that the United States is headed for a recession, but there are enough clouds on the horizon to make small business owners nervous.
Small businesses often don’t have the financial reserves of a big corporation and will find it rather difficult to weather an economic downturn. But there are steps you can take to prepare for a recession and ways in which you can survive a recession.
BMI Capital, your source for investment opportunities, offers ways in which your small business can better weather a recession.
Improve Your Personal Credit
When hard financial times hit, banks make it more difficult for small businesses to get loans. But if you have a good personal credit score, you stand a much better chance of getting the money you need to keep your business above water.
When times get rough, don’t make the mistake of cutting back on your marketing efforts. It is when times are lean that you need all of the marketing that you can afford.
There will still be consumers who are searching for your goods, services or products and you need to make sure they can find you. So don’t quit marketing. If anything, you should be stepping up your marketing efforts.
Make the Most of Your Customers
It costs money to find new customers. In the event of a recession, it is better to hold on to your current customers and give them incentives to buy more.
Win the Competitor’s Customers
If you want your small business to prosper when times are tough, you will need to expand your customer base. One of the better ways you can do this is by taking from the competition.
Do some research on your competition and see what they do to entice customers. Then you can come up with ways to entice them into becoming your customers. One way is by offering better customer service, it is the easiest way to distance yourself from the competition.
See if there are ways in which you can reduce inventory costs without sacrificing the quality of your goods or inconveniencing your customers. We are willing to bet that you have ordered too many of a particular item at any given time or there could be items you can get elsewhere at a better price.
Also, look into ways you can save on packaging and shipping. You might even want to downsize your warehouse. Save money in any way you can.
Protect Cash Flow
You cannot survive, even in good times, unless you have cash flow. To keep your business healthy, you need cash flowing through. When a recession hits, cash flow could become a problem.
What you need to do is implement ways to keep the cash moving.
As a broker-dealer with international reach, BMI Capital offers innovative solutions to investors as well as those looking to raise capital for their business. Contact us to learn more.