Recession Proof Your Business
Although working from home for is a great way to make money with a flexible schedule, you can also be in for a rough time as the economy starts to slide. Many home-based businesses are seen as luxury items which means in a slow economy you’re going to be finding less customers and those you do have will be willing to spend less.
But everything isn’t all gloom and doom for your business. The average recession lasts about 18 months and if you follow a few tried and true strategies that even large corporations use you will be able to weather this one and come out on top.
- Create a long-term “Cash-Flow” budget. This means taking inventory of how much cash you have on-hand and making sure you have enough budgeted out to cover at least 12 months. Use this cash to pay monthly and daily bills such as internet access, phones and mailing costs. If you need to, make cuts on things you know you like to stock-up on but really don’t need. Shop warehouse stores and sales to get the best deals. And never forget the power of the Internet. Check online for the best deals before you step out the door or order from the same supplies.
- Keep your operations lean. This means not only removing any extra employees, but also weeding out customers who aren’t profitable for you. For example, if you sell Avon products, choose shows more carefully. You’ll want to make sure that you aren’t spending your time and money on customers who may not be able to even cover your costs of travel and time.
- Keep from losing existing customers by keeping up close relationships with them. This may mean more customer contact than you usually do, but in the end it will be worth the investment in your time.
- Now is the time to step-up efforts to gain new customers. Find a way that your business is unique and then begin selling aggressively that feature. This may mean a bigger online presence, more advertising, or simply emailing existing customers to see if they can refer you. And never forget the power of cold-calling. Just search for the types of businesses you usually deal with and start from the top in contacting each company that shows up on the search engine. And don’t stick with just Google and Yahoo. Many smaller search engines will yield a wealth of clients that don’t necessarily pay to be on the bigger ones.
- If you business is local, join your local Chamber of Commerce or the Rotary Club. If you have children of school age, network among the other parent’s in school. Some schools and religious organizations print yearly catalogs or directories of parent-owned businesses. Even one customer from one of these sources could lead you to more contacts.
- Finally, make sure you pay all your bills on time. This ensures you the ability to get a loan for your business should the need arise. Keeping a tight rein on your personal spending and credit will also help you keep your business open.
And remember, this isn’t the first economic down-turn we’ve seen in the last few decades. Recessions come and go, but the smart business owner takes proactive steps to make sure they come out stronger on the other end.
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