Although inflation didn’t increase in October and stayed level, there is no guarantee that it will not increase again in the months to come. A one-month statistic is not a trend, and therefore it cannot accurately predict the future.
There is widespread concern that inflation, coupled with many other factors will result in a recession next year – a recession at or worse than that of 2008.
With that said, how does a small business prepare now, in the Winter for a recession that may come in the Spring or Summer?
It all starts with the right mindset.
The correct mindset for an economic downturn is to turn it into an opportunity.
While weaker businesses fail and have to close their doors, the businesses that stay alive get to take all the market share from their failed competitors, and come out stronger than ever before.
But this only works if you keep your doors OPEN and don’t give up and fail. Remember, it is only a failure if you stop trying.
Therefore, the mindset is to not contract and retreat, but instead to stand fast, persist, and even expand where feasible.
But before you do this, you must clean house and make sure your business is healthy.
From a macro view, just as a recession clears out the weak, unhealthy, poorly organized companies, so must you on a microcosm go through your business and cut off the dead weight, remove any cancer, reduce waste, extravagance, double down on what DID work, and spend less on the untried ‘experiments’.
By making your business a stronger and leaner machine now, you will be in much better shape to weather the storm when it comes.
After you’re done cleaning house, what is next?
Never stop promoting
If the economy worsens and you stop promoting you are essentially committing company suicide, as less promotion results in less sales, and less revenue. Often, business owners have an impulse to promote less when times are bad. This is a reactive ‘lizard brain’ response. The opposite response is needed. You need to double down on promotion to make up for the lack of sales in a downturn, hold back, and find funding and resources from wherever you can get them.
The emotion of fear is very strong, but you must not let it cause you to make irrational decisions like the one mentioned above. Proof up your business now, while there is time.