The global economy is in a state of constant flux. From one moment to the next, bad news can send shockwaves through the global business world. However, when the economy suddenly turns for the worse, many small businesses are caught entirely off guard. Unfortunately, a downturn in the economy is inevitable. The best you can do is plan for it. If bad things happen, your business will survive. Here’s how to get started.
Determine your goals
To get started, you need to identify your goals. What is your business’s ultimate goal? Your company may have a few different goals, but it’ll be easier to plan when you know what they are.
Review your finances
The first step to preparing for the worst is getting a firm grasp of your finances. Take the time to review how much money you make and how much money you spend. Look over your cash flow, expenses, and liabilities. You’ll want to be aware of how much money you have in reserve if things go south.
Develop a game plan
The first step to surviving a downturn in your industry is developing a game plan. You first need to know your warning signs—research what leads up to an economic disaster and what happens during one. Next, keep tabs on the economy and make sure you’re aware of any significant events that could affect your business, like natural disasters or terrorist attacks, which often lead to an economic downturn.
Many businesses can survive an economic downturn because they sell items that are needed during these periods, like food and water. When considering products and services that might be necessary during difficult economic times, there are three things you should keep in mind: (1) survival needs (2) psychological needs, and (3) comfort needs.
Often, owners of small businesses lack the skills and knowledge to know how to deal with something as complex and massive as an economic disaster. For those who may feel in the dark, outsourcing this help is possible. There are plenty of companies that specify in creating enterprise disaster recovery plans.
Maintain your relationships
It’s always essential to have an understanding of the business climate in your area, but it’s especially crucial when the economic climate is uncertain. You need to know how your local competitors are coping with the economy and how a downturn might affect them.
Next, you should maintain your relationships with vendors who deliver supplies or services to you regularly. Ensure that you have contracts with them that outline what will happen if there is a downturn in the economy and they can no longer provide these services to you at their current rates.
Finally, take inventory of all of the resources you have available and start thinking about how those resources could be used if there was an economic downturn. Maybe this means creating more affordable products or developing new services for customers who can’t afford traditional prices during difficult times – whatever it takes, create an emergency plan that ensures you’ll still be able to provide for your customers even if things get worse than expected.
