There are some early indicators that a recession is coming. If you’ve been in business long enough, this likely sparks a reminder of 2008 and the Great Recession. Here are some tips for preparing for a recession.
1. Nobody really knows when it is coming. A recession is always coming. So is a recovery.
2. Work on your Culture. Strong cultures are scrappy and resilient. We have had more than one client who have told us that their investment in their culture carried them through difficult times. When times are harder, you need your people to be empowered and aligned.
3. Build up your war chest. Making sure you have some cash in the bank to carry you through some slower times is always a good idea. Depending on the nature of your business, you should set yourself a goal for “x” months of operating expenses in an account. Knowing the goal for fully funding your war chest is key to achieving it and having it when you need it.
4. Keep investing in your business. Sometimes businesses panic when things slow down and they stop investing in their own business. Good investments yield returns so just make sure you are making good investments. Keep marketing. Keep training your people. Keep advancing your culture.
5. Be innovative. If you are in a recession sensitive business, now is a good time to think about diversifying your product. What could you sell during a recession?
6. Keep score. Let everyone know what success looks like so everyone can work together towards a common purpose. Consider implementing the Great Game of Business to get everyone aligned and focused on success. People Centric can help you implement the Game if you need help.
Here is the punch line. In case you haven’t noticed, all of the above suggestions are best practices even when there isn’t a recession on the horizon. We are still seeing lots of businesses invest in growth and hiring, so who really knows what is going to happen. Your job is to build a healthy company and a healthy, resilient team. This will yield great results in good times and in bad times.