Sooner or later, the restrictions on business and other activities that have been imposed due to the coronavirus pandemic will be lifted. When they do, the small businesses that survived will be asking if they’ll be so fortunate the next time—whatever “next time” ends up looking like.
And that means it’s time to look for ways to recession-proof your business.
Tip #1: Know what you can’t control.
First, be aware of things you can’t control. An example would be an apparel print shop whose market is schools and youth sports leagues. A global pandemic that brings those local institutions to a grinding halt is not something good business management can control.
In football, this phenomenon is called “the void.” It’s the area in a defense where a coach knows his team will be beaten if the offense executes the play well enough. Know where your void is. Make sure you understand why it’s a void. Then, focus your mental energy on areas you can control.
Tip #2: Build brand loyalty.
If you’ve been successful in small business, then you already know that your current customer base is always the best source of sales. They’re also the best place to start recession-proofing. Run offers that demonstrate your appreciation of their loyalty.
Similarly, make sure the community as a whole appreciates your business. Sponsor charity events and other activities. The businesses that took those steps were the recipients of an outpouring of loyalty during the COVID-19 lockdown. Social media memes and sayings like, “The small business that did you a favor needs one now” were popular and a rallying cry for many.
Tip #3: Diversify your revenue streams.
This doesn’t necessarily mean diversifying your product or service offerings. Sure, it could mean that, but it doesn’t have to. What’s more important is understanding that you’re better off with a large base of small customers rather than a small base of large customers.
In the short-term, the revenue might be the same—or even better with a small number of big-ticket buyers. But in a recession, you’re bound to lose a certain percentage of the customers no matter what. Make sure that those losses don’t wipe you out.
Tip #4: Sharpen your focus.
This applies to everything from your marketing message to your budget to your operations. Developing a laser-like focus on what you do best will make sure there are no wasted resources that have to be trimmed when times get tough.
All of the steps above are smart business practices, no matter what kind of economic landscape you’re preparing for. The prospect of a recession just makes implementing them now more urgent.