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  • Christie Varner

PJS #007: 5 Steps to Survive (& Thrive) Recession & Inflation

Updated: Oct 12

In today’s issue of Profit & Joy Simplified, I’m sharing 5 strategies to help your business survive (and possibly thrive) in a recession.


According to a Goldman Sachs survey, 93% of small business owners are worried about the US economy experiencing a recession in the next 12 months.

So if you're feeling stressed about inflation and a recession looming, you are clearly not alone. 9 out of 10 of us are worried.


The good news is that small businesses tend to spot economic trends early and are creative in coming up with ways to pivot in order to survive. We are entrepreneurs - the ultimate overcomers!

5 Simple Strategies to Survive a Recession

Let’s dive into some strategies to put in place NOW:

1. Protect your cash

82% of businesses fail due to cash flow issues so taking control of your cash is key. You’ll want to:

  • Build up a cash reserve - 6+ months of operating expenses. This cushion will provide stress relief.


  • Work on cash inflows - focus on collections of receivables. You may consider offering a discount to customers for early payments.


  • Manage cash outflows - pay bills when due, not early. Consider paying monthly instead of a large annual payment.


  • Maintain a weekly cash flow forecast. I recommend a rolling 13 weeks. This will give you so much peace of mind. Promise. It's one of the first things I help clients with even in great economic times.


  • Be a great communicator with your clients & your vendors. They’ll be feeling the effects of a recession too. Go the extra mile for your clients & remind vendors how much you value them. This will help ensure you are top of mind when clients are choosing who to pay & will put you in good graces with your vendors.

2. Cut spending

When money is getting tighter, it’s a great time to examine your business’s spending and eliminate what's no longer needed or just a nice-to-have expense.

Consider outsourcing staffing, perhaps renegotiating lease expenses, or purchasing less expensive supplies and services your business needs to survive.


Go on a treasure hunt for cash! Gamify it for fun. I do this myself & with my clients quarterly & we love it!

3. Keep marketing!

It seems counter-intuitive to keep marketing when we just talked about cutting back. But if you’ve been using marketing to find new clients, how will they find you if you stop advertising?


If your business comes from lower-cost marketing - such as referrals - definitely don’t stop that! In fact, put more effort into it. Other companies may be closing, but you want the world to know that you are still in business and to have confidence that you can serve them.

While it’s important to rely on your instincts as a business owner, it’s also important to remember that there’s no drama in data. Use those numbers to make good strategic decisions.


4. Look for new opportunities

People still have needs even in a recession. Be open to change & think outside the box about how your business could pivot a bit during this time.


An example of this was Uber during the pandemic. No one really needed Uber to drive them anywhere anymore, but a lot of us needed food delivered to our doorstep - Uber Eats.


Your employees are valuable & may be the source of some great ideas - areas to cut costs as well as ideas to tweak offerings to fuel growth. This’ll also lead them to feel valued and part of the team.



5. Mind your mindset

Even though Chicken Little and the news will be saying “The sky is falling, the sky is falling,” it really isn’t. In fact, historically recessions happen every few years. As savvy business owners, we should expect to experience them.

With proper planning, you can be one of the businesses that come out not just surviving, but potentially even thriving.


Regardless of the economy, there are always businesses that find ways to remain profitable. Let that inspire you to be one of them.

TL;DR

Prep your business for a possible recession by doing these 5 things:

1. Protect your cash

2 Cut spending

3. Keep marketing

4. Look for new opportunities

5. Mind your mindset


How are you feeling about the economy? Which step will you implement first?


Thanks for reading.


See ya again next week!

Whenever you're ready, here are 3 ways I can help you

1. Get help building a 12 week plan, cash flow forecast or understanding the levers affecting your profit here.


2. Want to chat about how I can help you achieve your vision of success? Schedule a call to see if we'd be a good fit to work together.


3. I post on LinkedIn every weekday at 7:15a CST. I'd love to connect. Find me here!





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