Many economists are forecasting a downturn or even a full-blown recession in the next 1 – 2 years. Here a few tips to position yourself for the possibility.
Act early.
Discussing the possibility of a downturn in leadership meetings. What does this mean for cash flow? What does this mean for your employees? What liabilities need to be addressed? Who are your partners you can collaborate with to achieve success?
Prepare “if-then” statements.
Research has proven that our IQ drops substantially when we are emotionally hijacked. As a business owner, watching your revenues decline could potentially affect your emotions and impair your judgment. Proactive leaders make the hardest decisions before the crisis comes, then simply follow their action plan: “If my revenues fall by 20%, then I’ll take actions A and B. If my revenues fall by 40%, then I’ll take actions X and Y.”
Look at the long-term perspective.
All businesses have needed to pivot, downshift or upshift in recent weeks. It’s time to consider the long-term effects to decisions made today. What disruptions today need to be taken on headfirst for long-term success?
Find a balanced approach.
What are sustainable actions your business can take now to prepare for the unknown? What efficiencies can you create? How can you improve profit margins? What cost reductions can you take? Does it make sense to invest in technology now to achieve efficiencies, profit margins, and cost reductions.
Think about your successes in the past.
What did you do through the last recession that worked? Will it work again? Or what will need to be done differently?
There are many unknown answers to many questions. Making attempts at answering these questions today will help prepare for the possibilities of an economic downturn in the future.
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