It’s time to talk about the dreaded R word- “Recession”. It’s a word that stirs up a lot of fear and insecurity in a lot of people, especially small business owners. This is because it’s associated with a lot of loss, pinching pennies, lay-offs, and more.

Unfortunately, economists predict that Canada will be facing a recession by 2023. While dips in the market are expected from time to time, this one is different as many small/medium businesses are still recovering from the disastrous economic effects caused by the Covid-19 pandemic.

Though, it’s not all doom and gloom. We’ve compiled a list of some of the top things you can do to make sure your business is strong enough to withstand any type of economy.  

1. Get on Top of Your Invoices and Collections

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When the economy takes a tumble, you’ll see that EVERYONE becomes a bit slower making payments to you. When this happens, you have to make sure you don’t let payments slip through the cracks because it will be at your detriment. Kindly follow up with your customers if there are any outstanding payments so that there is a steady flow of money coming into your business.

2. Be Smart with Your Money

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A recession is the wrong time to be spending your money on anything that isn’t absolutely essential to your business’ success. This doesn’t mean slashing cuts left and right. You have to take a good look at your business to see what type of cuts you can make that will cause the least amount of harm while still guiding you in the right direction. It’s best to plan this out as soon as possible so that more money stays in your pocket.

Further you should create an emergency fund that can last you for 3-6 months so that you can keep your business running if anything goes awry.

In a similar sense, you should try to get funding as soon as possible! It’ll be easier to get approved for a loan or a line of credit when your business is thriving rather than when it’s merely surviving during a recession.

3. Get in Tune with Your Customers' Wants and Needs

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Just like your business’ priorities will change during a recession, so will your customers’. There will be new customer pain points, wants, and needs that your business has to be able to respond to or else you risk losing customers.

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4. Be Transparent and Communicative with Your Team

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Yes, a recession is scary for everyone- your employees included. Without truth and transparency, your entire team can become misaligned, frightful, and unstable. Some business leaders may think it’s best to keep employees in the dark when it comes to bad news but that might be the worst thing you can do. Instead, it's better to be truthful and open with them regarding the state of the business. Don’t forget, they hold a unique perspective of your business and may be able to help provide useful solutions and ideas.

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5. Don't Be Scared of New Opportunities

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Most businesses tend to pull the reins in when a recession hits. But if your business has a stable foundation- a recession might be one of the most opportune times to expand and set yourself apart from your competition. This doesn’t mean you need to increase your expenses, just reorganize your budget. It's about working smarter, not harder.

If you do take on growth mindset, you need to center everything around the customer experience. So, it's a good idea to put a bit more time and energy in conducting customer insights and analysis. This will help you discover what your audience wants or needs, no matter the market, so your business can make it through the rocky roads ahead.

Conclusion

When you gain the right resources, knowledge, and support to fulfill these actionable steps- your business will be able to thrive even in a recession.

Unsure how to put these steps into action? We can help! At Kärna, we’ve combined our many years of entrepreneurial experience with expert research to create a recession-proof solution for businesses like yours called the Alignment Program. To learn how your business can benefit from this program, contact us today!