This Utah company has tips to make your business recession-proof
Estimated read time: 4-5
minutes
Everyone in America wants to know if the country is headed for an economic recession. Though no one can say for sure, a recent Bankrate survey reported a 64% chance of it happening in 2023.
“We expect a recession in 2023, and while incoming data for the first quarter have shown a resilient economy thus far, there have been signs of slowing activity,” Mike Fratantoni, chief economist at The Mortgage Bankers Association, told Bankrate. “Coupled with the likelihood of tighter financial conditions brought about by developments in the banking sector, economic activity will likely slow sharply over the next few quarters.”
Whether or not a recession is imminent, taking steps to safeguard your business is a wise move either way. To help you face the future without fear, contact Impact Utah to make your business recession-proof.
Improve your margins through operational excellence
Successful business leaders know that there are always ways to improve. Tightening up your operations is one way to do this. Look for opportunities to make reductions. Work hard to retain good employees — and possibly let go of some you don’t need. Reduce costs where possible.
If you’re not sure where you stand in terms of operational excellence, Impact Utah offers a free assessment tool to help you gauge your strengths and weaknesses.
Learn critical cash management strategies
Perhaps the most important thing you can learn in business is how to manage cash flow in any economy. Start by clearing up your balance sheet and examining your three main areas of cash flow: accounts receivable, accounts payable and inventory.
Be sure to collect receivables on time. If you require payment within 30 days, stick to that agreement. On the flip side, make sure you’re not making payments faster than necessary. If payment terms are between 30 and 60 days, you can push that out to the full 60 if your cash flow situation warrants it.
When it comes to inventory, maintain appropriate levels. You may need to look at items that aren’t selling as quickly as other items and do whatever you need to do to keep things moving.
Grow your revenue
There are two main ways to grow your revenue: effective marketing and increased sales.
First, don’t discount the value of recession-proof marketing. Successful companies such as Venmo, NerdWallet, Uber, Groupon and WhatsApp each got their start during the Great Recession. If you can communicate a unique need or pain point that your product or service addresses, people will likely be willing to pay for it.
Win Jeanfreau, executive director of Impact Utah, outlines several different questions you should be asking yourself to market your business more effectively. These include:
- What problem are you solving?
- How is your solution unique?
- What is your value proposition?
- How will you create awareness of your product/solution?
- How will you get consumers to purchase your product?
- How do you facilitate a purchase and a repeat purchase?
- How will you get customers to refer you to others?
For the full list of effective marketing questions, check out Impact Utah’s webinar on recession-proof marketing.
Also, when it comes to increasing revenue, don’t be afraid to increase prices if necessary.
“Every dollar increase in price is a dollar increase in your profitability,” Rick Papworth, Impact Utah’s managing director of finance, says.
Develop skills and master tools to lead your company through a recession and beyond
Just as a car relies on an engine to keep it running, your business has an engine that requires consistent maintenance. Specifically, Papworth says there are six areas that need to be aligned well for things to run smoothly: strategy, structure, people, work methods, lateral processes and metrics.
Without a clear strategy, you have confusion. If your structure isn’t aligned with your strategy, that creates friction. People who aren’t enabled and empowered aren’t likely to perform well.
Without standards on how to produce products, you’ll have variance. When you leave coordinating processes to chance, you get gridlock. And if your metrics and rewards don’t support your goals, you’ll have disengagement. You get the picture.
To develop the skills and tools you need to lead your company effectively, visit impactutah.org for more information.
Get the help you need
If a recession is in the not-too-distant future, there’s nothing you can do to stop it. But there’s a lot you can do to prepare for it.
Fortunately, you don’t have to try to figure things out on your own. Impact Utah can help you navigate your way through any economic climate. With full-service training, consultation services and a successful track record, you can trust Impact Utah to be a safe harbor and valuable resource. Visit impactutah.org today to learn more.
