Is Your Business Safe In A Downward Economy?

kelowna accountantLet me start this with a disclaimer: I really dislike discussing downward economies and recessions. Call me a positive thinker, but I just prefer to look ahead and decide what needs to be done to get to where I want to go. Getting through a recessionary period generally has to do with shifting your mindset and remembering what truly supports your business.

Here are a few things every business needs to consider when determining their safety in a downward economy:

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1. Client Relationships

Make sure that you are continuing to build great client relationships so that you are keeping in communication with them, even if they aren’t currently ordering anything. If they challenge you on your pricing, consider it an opportunity for you to help them out and keep them as a long-term customer. Think of both of your goals and try to get there together. Win-win relationships are the only ones that work long-term.

kelowna accountant2. Have The Right Capitalization

If you’re going into a downward economy underfunded, it makes it substantially more difficult to operate because resources are much more difficult to acquire. Banks and venture capitalists are less likely to fund you during a downturn and if they are, it’s definitely going to cost you more. Make sure that you are funded correctly and have enough cash and inventory or you run the risk of falling into the trouble zone.

3. Make Sure Your Staff Is Solidkelowna accountant

A recession is the right time to handle any difficult staffing issues, not only because you have justification for letting people go but also because it is an opportunity to keep the right people through that time. You really get the chance to cleanse your business during a downward economy and reposition for a path to success and regrowth.  The benefit to tougher economic times is the labour pool is usually better with more options for finding great people.

Surviving, let alone thriving, in a downward economy is all about fine-tuning. You’ve got to dot your I’s and cross your T’s because when it comes down to the wire, the stakes are high and you’ve got a lot to lose. If you can focus on the foundational elements that support your business to weather the storm, you will do just fine.

 

 

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