Entrepreneurship is all the rage. But it wasn’t always that way. It used to be that people would find a job, work hard, and retire 30 or 40 years later—with free time on their hands and a sizable pension.
Anyone can run a business in good times. But in times of economic crisis, the responsibility to get your business through rests solely on your shoulders. There’s no one else to turn to. You have to make things happen for yourself.
Let’s look at some of the most popular economic downturns—and see the effect they played on history.
The periods listed above are only some of the most significant economic slumps. But several other recessions also occurred throughout history—resulting in inflation, unemployment, and a strain on the economy.
Because you don’t know what will happen, you have to prepare your business for all the “what-ifs.” Below, we’ll show you how to do that.
To create a disaster recovery plan, start by thinking of worst-case scenarios. Try to come up with as many as you can—then ask yourself what would happen to your business if each situation occurred. Attempt to imagine the impact. Would your business survive?
If you believe it would, start thinking of how you can strengthen your business—so it not only survives but continues to thrive during this crisis. If you don’t think it would survive, consider what you need to get through and begin making preparations.
Many financial experts recommend you save enough money to cover your operating expenses for at least 3–6 months. You may choose to save more or less, depending on the business you operate.
In times of crisis, you can use your savings to prevent layoffs, pay vendors, maintain equipment, and meet your other operating necessities. Startups may find it difficult, but this shouldn’t be a problem for established businesses.
Sometimes, it’s necessary to take on debt. But when your business is debt-free, you have more cash to contribute to your savings. Excess debt also eats into your profit margins.
When sales are down and fewer customers are coming through the doors, the last thing you want to worry about is paying off debt. Maybe you got a loan to expand your business, hire more workers, or purchase new equipment. But you should repay your loan as soon as possible—to ensure it doesn’t become a burden later.
Customer service is always important, but in a down economy, it’s even more essential. The service you provide distinguishes you from your competitors. When you’re recognized for delivering exceptional customer service experiences, people will associate that with your brand and choose you over others.
Show your customers that you care about them beyond the point of sale. Make a genuine effort to respond to their inquiries, address their concerns, and resolve their complaints.
The more you focus on customer service, the more your service will improve. It may not seem significant when things are good, but every customer counts in times of crisis. The level of service you provide is the determining factor that will either draw customer support or drive it away from you.
During unprecedented times, you will probably look for ways to save money—and you should. But one thing you don’t want to stop doing is marketing your brand to new customers.
Consistent cash flow is what will keep your business going. You may not be able to depend on your current customers when times are tough—sometimes their support may dwindle as they cut their budgets and search for new ways to save money themselves. So marketing your brand to new customers will help you stay cash flow positive—and keep your business’s money stream from running dry.
As a business owner, you wear multiple hats, juggle several obligations, and play various roles. You get to celebrate your business wins—but you’re also responsible for preventing the losses.
Entrepreneurship is the dream of many, but it also comes with responsibility—and you can’t anticipate everything. No one foresaw that the stock market would crash in 1929 or a global pandemic would hit in 2020. But part of setting your business up for success is to make it bulletproof—ensuring it can survive through any economic climate.