My top 3 ways to recession proof your business, AND just a quick pro tip: you want to be doing these all the time ANYWAY. They are just good standard financial control in your business.
1. Manage your Cash Flow: Cash Flow Management is KEY!! Revenue is vanity, profit is sanity and cash is QUEEN!
Understanding where the money is coming from and going out month to month is the foundation of a thriving, sustainable business. Ideas are great, I believe they are currency and they help create the value exchange of money, but if you do not know how much you need each month to keep the business alive and bring those ideas to life, you will be one of the 50% that fail in the first five years of biz.
Best practice: Start with identifying your monthly expenses. If you are new in your business, project what you think you will need each month. What is your bottom line of cash you need each month if no sales were to walk through the door?
2. Understand Your Accounting Software: Have a system you understand at an overview level to track your income and expenses.
So many people are not doing regular bookkeeping for their businesses.
I get it, as an entrepreneur you wear many hats AND bookkeeping might not be the most exciting hat to wear, but it is the hat that signals to the universe that you are a good steward of money and you would like more of it. So, get over your resistance and either hire a bookkeeper who explains things to you regularly or get in there yourself.
Best practice: Choose an accounting software that works for you, ask for referrals of what others in your industry are using and grow with it. Good books helps massively with cash flow management, financing, and will help reduce headaches next year at tax time!
3. Monthly Money Date: Have a REGULAR date with yourself, your biz partner, your online business manager.
This is a time for you or you and your team to review financial statements, income projections, expenses, financial goals, make decisions, pay bills, and invoice your clients invoice.
Best practice: Schedule it! On your calendar. Put 90 minutes down to start and if you finish early, give yourself a high five and go do a little happy dance. And then schedule your next month review.
You are a financial rock star!
Anticipating a downturn in the market does not mean your business has to have a downturn. Many businesses actually have thrived in a recession.
These three ways can help your business thrive in a recession or any economy.
And if you want more, download my free PDF checklist with all TEN ways to recession proof your business.