Best Practices to Shore Up Your Toccoa-Stephens County, GA Business for a Recession
The last recession was brutal on small businesses. In fact, 1.8 million small businesses that closed during the recession did so because they simply couldn't survive the effects.
As we enter the final quarter of the year, there are signs that another recession could be on the horizon. That's why it's more important than ever for small business owners to take steps to recession-proof their companies. Below are some tips from the Toccoa-Stephens County Chamber of Commerce on how to do just that.
Your Employees Are Gold
In a downturn, it's tempting to institute a hiring freeze and put off performance reviews (and raises) to save money. However, this can be counter-productive in the long run. Your best employees will be the ones who stand by you during the toughest times and come out the other side stronger than ever. So, do what you can to keep your best employees happy and engaged. This might include instituting a four-day work week or letting employees work from home one or two days a week. You can also offer perks like more time off or surprise half-days.
Eliminate Debt and Cut Costs
If you're carrying a lot of debt, now is the time to start paying it down. This will free up cash flow so you have more flexibility should tough times hit. You should also take a close look at your expenses and see where you can cut back. For example, if you're renting office space, can you downsize to a smaller space or sublet part of your current space? You should also consider whether moving to a virtual office model could save you money on overhead costs like rent and utilities.
Use this time to also organize your files. It’s easy to stash away paper receipts and email invoices when things are busy, but keeping a good filing system means you’ll be able to find accurate records of what you pay and when. If you find files that address multiple vendors or expenses, use this PDF splitter for free to break them into separate files so you can save them with other similar documents. This organization will help you to see the big picture and make strategic financial decisions.
Get Paid Faster
One way to ensure you have enough cash on hand is to make sure you're getting paid as quickly as possible. To do this, send invoices as soon as the job is complete and follow up with clients who are late in paying. You might also consider instituting a policy of partial payments upfront so you're not left waiting for weeks or even months to get paid in full. If you're still running a manual accounting process, you can also save money and time by adopting online accounting and an automated system.
Switch Your Business Structure
If you're looking for ways to cut costs, one option is to switch your business structure designation. For example, you could switch from a sole proprietorship to a limited liability company (LLC). This can offer certain tax benefits and protect your personal assets in the event of a lawsuit. Another option is to form a partnership or an S-Corp. Both of these structures have their own set of pros and cons, so be sure to do your research before making a decision.
New Revenue Streams, More Profit
The best way to boost profits is to create new revenue streams. According to FastCapital360, there are several ways to do this, and the options vary depending on your business. However, some common strategies include expanding your product line, entering new markets, and offering services in addition to your products. Whatever route you choose, it's important to make sure that the new revenue streams are profitable and sustainable. Don't add them just for the sake of adding them; make sure they actually contribute to the bottom line.
Give Your Marketing Strategy an Upgrade
Lastly, make sure your marketing strategy is up-to-date and focused on generating leads that convert into customers—even in tough economic times. This might mean shifting your focus from traditional marketing channels like print ads and direct mail to more cost-effective digital channels like email marketing and social media marketing, explains Instapage. Or it could mean refocusing your efforts on customer retention rather than customer acquisition.
Prepare and Recession-Proof Your Business
No one knows for certain when the next recession will hit or how severe it will be, but small business owners would be wise to prepare for the worst, nonetheless. By taking steps now to recession-proof their companies—including using a PDF splitter to organize files, keeping their best employees, reducing debt and cutting expenses. They'll be in a much better position to navigate the recession successfully.
Membership in the Toccoa-Stephens County Chamber of Commerce offers invaluable benefits to entrepreneurs in our community. Join us today!