When news reports predict a rocky economy, it’s common to feel nervous, concerned, and uneasy. But, there are ways you can manage the stress of an uncertain economy — and get your business ready to survive and thrive during a difficult economic time.
It starts by making a plan.
If you are feeling uneasy about the state of the economy, here are eight ways to get your business ready to weather the storm of a rocky economy.
8 Ways to Get Your Business Ready for an Uncertain Economy
While you can never completely predict what’s in store for the economy, you can look at factors that could create an impact. Currently, the factors that could lead to an unstable economy in 2023 include:
- Increase in interest rates that make it more expensive to borrow money
- High inflation
- Supply chain disruption
- Increase in wage expectations
- Possible tax changes
Knowing which small business trends may impact the economy can help you get prepared as you take the following steps to recession-proof your business.
#1) Get your business finances in order.
The key to creating a resilient business that can both survive and thrive in an uncertain economy is having clear and accurate financial reports. Having solid financial reports allows you to:
- Monitor cash flow, revenue, and expenses
- Review your financial history to identify shifts and trends
- Anticipate upcoming changes, costs, and cash flow issues
- Produce documentation to receive loans and investments
Having solid financial information is key during times of economic uncertainty. Your company’s ability to see your financials clearly could be what makes or breaks your business during a tough economic time. Plus, once you have your business finances in order, it will be easier to take other steps to get your business ready for an uncertain economy.
Get Your Finances in Order Right Now
Use CFO2U’s free Small Business Financial Planning Guide to create a report of your business’s most important financial metrics. Download the FREE guide now.
#2) Create at least two financial forecasts.
Once you have a good look at your finances, create two financial forecasts for your business. Create one that is more optimistic and one that can be quickly implemented should the economy take a turn for the worse and business slows.
#3) Set a budget (and cut what you can).
Review your financials, and create a structured budget for the year. Consider your spending habits, and look for places you can cut unnecessary expenses. Also, prioritize your expenses so you know what is most important (payroll, rent, etc.) and what you can cut if money gets tight.
Read More: Build an Accurate Business Budget In 8 Simple Steps
#4) Consider setting up a credit line.
You may not need extra cash now, but your financial forecast may show that you will in the future. Decide if you need to get ahead of the problem and have a credit line available if and when you need it.
#5) Refinance or consolidate debt.
Review your debt and determine if you could refinance or consolidate. Refinancing can help you bring down the amount of interest you pay. Consolidating debt can help you limit your debtors and possibly help you get a better deal on interest rates.
#6) Monitor cash flow, and boost your revenue streams.
Look for ways to keep revenue and cash flowing in your business. Consider changing payment terms to collect payment sooner or adding a deposit to projects to bring income in early. Also, explore ways to expand your offerings or provide additional products or services to your existing customer base.
#7) Keep investing in your business.
Uncertain economic times can make business owners want to pull back. But, as Entrepreneur.com says, investing in your business during a recession can be a good thing. Keep an eye out for opportunities that can arise (like securing more affordable rent or equipment, finding new talent, identifying new markets and needs, etc.). Don’t turn off your marketing, and continue investing in the things that work for your business.
Related: How Much Should Your Business Spend on Marketing? 9 Questions to Consider
#8) Pay attention, but don’t overreact.
Going through a period of economic uncertainty can feel stressful. It can make you unsure, uncertain, and ready to make rash decisions. But to weather the storm, don’t let the emotional stress get the best of you. Instead, return to your numbers, and let them guide you.
Keep a view of your finances, and regularly communicate with your finance team to create a clear path through the storm.
Related: 40+ Questions To Ask Your Business Accountant
Get a Financial Partner to Help You Weather an Uncertain Economy
The key to weathering an uncertain economy is having a clear, accurate look at your business finances.
When you know your numbers, you can adjust and pivot to make changes that can help your business go through a tumultuous time and come out stronger on the other side.
If you want to get your business ready for any potential challenges in 2023, start today. Get your finances in order by downloading our free Small Business Financial Planning Guide. Or, set up a call to see how our team of professional outsourced CFOs, CPAs, accountants, and bookkeepers can get your books in order for you.
Get ready now. Schedule your call today.
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