It may seem obvious, but a business can’t grow if it can’t stay in business, and as a business owner, you’re almost certain to face situations that force you into “survival mode” at some point. One of the most likely and important problems that can put you in that position is a recession.

Uncertainty and trouble in the economy as a whole can stop almost any business from running. But a bad economy doesn’t have to be hopeless, no matter how bad it is. You can take steps to make sure that your business won’t be hurt by a recession.

Here, we’ll talk about what you can do to make your company recession-proof. Read on to find out more. 

Build Up Your Business Credit 

When a recession hits, lenders tend to tighten their lending requirements, so if you want to be ready for one, it’s best to focus on building your credit. Even though it’s not a given, it’s likely that you’ll need money if the economy goes down.

So, if you want to protect your business from a recession, you should take the right steps to show creditors that you are a safe and reliable investment.

If you need a loan during a recession, make sure all of your financial paperwork is in order, get a business credit card to take some of the pressure off of your personal credit record, make sure you pay all of your bills on time, and take any other steps that will help you succeed.

Forecast Carefully 

The key to a company’s long-term success, regardless of the state of the economy, is accurate sales forecasting. But to be ready for any surprises that may come with economic crisis, you need to make thorough and well-thought-out predictions.

Speculation predicated solely on optimism is futile. Being realistic is essential. You need to account for the best-case scenario, the most likely course of action, and the worst-case scenario when making predictions.

Some of these less-than-perfect predictions might include thoughts about possible economic trouble. Recessions can be hard to predict, but they are a normal part of any economy. Make sure you have a clear picture of what will happen to your business if one does, so you can have a plan in place to deal with it.

Keep Your Customers Loyal 

When the economy is bad, your current customers can be an important lifeline. Getting new customers can be much harder during a recession, so keeping the customers you already have is important if you want to stay in business when the economy is tumbling.

Make sure you keep in touch with your clients regularly, but don’t be too pushy about it. Find out how they like your product or service and make sure that any big problems they might have are dealt with quickly and thoroughly. Maintain a solid, easy-to-reach, always-available customer support system that can handle customers’ small problems and annoyances as they come up.

Keep Investing 

When a recession hits, businesses often look to reduce costs across the board, and marketing is often the first place they look. In times of economic unpredictability, it can be easy for businesses to view marketing as a luxury rather than a necessity. 

If you’re trying to recession-proof your operations, it may be wise to avoid making drastic cuts to your marketing budget. This is because attracting new business is often central to weathering economic turbulence.

It’s also not always a good idea to hold a recruitment freeze. If you need more staff to help make the sales that you have to have to keep the company moving forward, it’s a good idea to look into flat fee recruitment to save yourself money and find the best candidates. It’s a cost, but it’s one you should – if you have planned and budgeted correctly – be able to recoup. 

Know Your Numbers 

If you don’t know exactly where your company stands financially, you won’t be able to steer it through a downturn. You won’t be able to prepare for the worst-case scenario if you don’t know your most important key performance indicators (KPIs), such as profit margin, production costs, budget, cash flow, inventory, and sales.

Monitor your company’s progress, day-to-day activities, and financial background with consistent, careful attention to the numbers. You can use those numbers to assess your preparedness for a recession and to help steer you through the ensuing economic uncertainty.

Some experts will tell you to stop spending during a recession, but this could be the final nail in your company’s coffin, and if it takes a little expenditure to make it through, it’s worthwhile.