No matter what type of our business is and how large our business is, there’s no guarantee that our business is recession-proof. In this case, we should know how to properly recession-proof our company. Many businesses, big and small already fall victim to economic recession. When major companies like Apple, Google and Microsoft are lying off employees, this should be a good indication that there’s something wrong with the economic condition. When this situation occurs, it is important for us to get properly prepared. If we want to strengthen our company against recession, we may need to build up reserves. There should be a cash reserve that can help us survive a few months of low sales. It’s a bad thing if we take a loan to cover our losses due to economic recession. This could put us in an increasingly deeper hole and we won’t be able to get out, even after the recession ends. We won’t be desperate if we have enough cash reserves.
When it comes to preparing against recession, we can never have too much money. We should start to make it a priority, if we don’t really have enough cash reserve. Any kind of non-essentials should be cut back. Inventory should be analyzed and it is important that we don’t overstock. During slow times, we may need to negotiate with employees, whether they will agree for shorter work hours. We may maintain work hours, but we may try to improve productivity. Just before the recession strikes, it is important to step up our marketing effort. This will make sure that consumers will have higher brand awareness, even during the the peak of recession. It’s true that despite the higher advertising expenses, it is possible that our sales will not be higher than the pre-recession level. Even so, the sales level can still be manageable enough to ensure decent profitability and we may go through the recession without laying off a single employee. It is a common fact tat those who advertise their products the most, will likely have the most sales.
Before and during recession, we should try to pay attention. We should look and see what’s happening in the market. Even during a recession, there could still be some opportunities that allow us to survive the situation better or even obtain some decent profit. We may also notice changes and trends that can indicate the eventual end of the recession. In order to reduce the effect of recession, we may stop the production of specific items. This will prevent financial bleeding due to overstocking and poor demand. Even a small idea in the middle of a recession may lead to a million-dollar innovation. One good way to obtain idea is by asking for consumer feedback. We may perform focus groups, direct interviews and public surveys. Salespeople and front-line employees also see things that managers don’t, so we should interview them as well.