Recession Proof Your Business
There's an event coming up on August 24th, 2022. During the hour-long event, Kathryn Rose, Founder and CEO of get Wise, will interview me about recession proofing your business. Check it out if you can. If I get a direct link, I'll add it here. That discussion will be more in-depth than my discussion here (1 hour vs. 11 minutes!). That event will also be evergreen. It will be taped and available to any member of get Wise and members of DWEN - Dell Women's Entrepreneurial Network (https://dwen.com/en-us/). Join us if you can.
Now on to the good stuff.
According to the SBA, the stats, the survival stats of businesses over a five-year period from 1997 to 2019, the failure rate was statistically indifferent, regardless of whether we were in a recession or not. And that includes the great recession. So there were many businesses that failed during the great recession, but there were also many businesses that started and thrived.
So if businesses can make it through the great recession and even thrive - not just survive but thrive - then you can definitely make it through a downturn caused by supply chain issues and demand, adjusting to supply or supply adjusting to demand. Basic macroeconomics.
The key is to focus on what your business can do better. It is true that during times of hyper growth, you can cover up things. For example, if you're growing really rapidly and getting initial deposits from your customers, then you're not worried about cash flow. When your business slows on the cash flow, and there's no more initial deposits. You're just getting paid by existing customers, but you were getting paid 30 or even 60 days later, despite 30 days terms.
Now you're going to have a very serious issue with cash flow because you went from collecting all these deposits to now having to manage your receivables. However, you were not managing your receivables.
You were letting them slip for 30 days or more. That's not good. So obviously now's the time to correct that.
For more information, watch the entire video!
If you want to discuss how to recession proof your business, schedule a free 20-minute consult at https://theresourcefulceo.com/schedule.