Date: August 19, 2022
Is your business ready for the recession?
Americans are clearly struggling financially already. As a small business owner, it’s so important to ensure that your business is ’recession proofed’, especially given what is happening in the economy right now. Since recessions can cripple and bankrupt unsuspecting businesses, now is the time to get prepared. Here are some ways you can start to beef up the padding around your business finances and get ready for tough financial times.
1. Tax Planning – One of the fastest and easiest ways to free up additional cash flow is by investing in a tax plan that will help legally reduce the taxes you pay each quarter and each year. It’s estimated that nearly 94% of business owners overpay in taxes (every year). Unfortunately, most of them even have CPA’s. You know what they do not have? A tax strategist on their side, analyzing their needs and implementing legal, transparent strategies to reduce their tax bill, and PROACTIVELY showing you what types of strategies you are eligible for. Put the tax savings to good use and save up for the coming financial recession to cover expenses and prepare for the unexpected.
2. Cross train your employees – Since ‘the great Resignation’ struck in early 2021, focusing on the talent you have and cross training your employees will help your business run smoothly and reduce the costs of high turnover. It gets expensive training an employee only to lose them to a competitor or worse, not being able to find quality talent in the first place. Invest in equipping your employees with the skillsets, recognition and empowerment that will help you retain and improve your internal talent. Giving your team the proper tools will not only elevate morale, but it will help with creativity, flexibility, and the ability (and desire) to elevate and innovate to meet the challenges that recessions bring.
3. Budget and Forecast – A great way to make sure you are operating within your budget and pricing correctly, is by having an expert on your side. Hiring a CFO will help eliminate the worry of not having enough cash at any given moment. They can create a cash flow forecast which will give you visibility and help you estimate what your cash flow will be over a specified time period. This will help you avoid succumbing to cash flow crunches, revenue shortages, and a decreasing bank balance. When you make a plan (and stick to it) you can ensure your success, even when the unexpected happens.
4. Put an emphasis on customer service – As it is more costly to attract new customers now than ever before, making sure your current customers are happy and taken care of is invaluable. Empowering your employees with the tools and training they need so they can deliver excellent customer service is key to client satisfaction. You can negotiate upsells from current clients and new sales from referrals from happy clients that spread the word. It doesn’t cost much to make sure your client base is satisfied.
5. Be Flexible – Adjusting to the needs of your customers and team is a must to not only stay open but to thrive in the face of adversity. Finding creative ways to meet the companies financial needs is crucial. For example – during the pandemic, many restaurants opted to partner with apps that made food delivery an option. This became popular and many customers choose to still use this convenient feature even today. The adaptability in this case is an important reminder about creative solutions, and the ability to pivot and innovate to continue growing.
Having a strategic partner on your side will help you prepare your business for a recession. If you think you may be one of the many business owners that overpays in taxes, or if you just need some help planning for what is coming – we are happy to help. Contact one of our associates here for a complimentary assessment.