We all know the economy has its ups and downs.
And when times are good, many of us tend to forget that.
But if you were an entrepreneur or business owner in 2008 and 2009, you know how scary the last recession turned out to be.
And even though some economists predicted it would happen, many of us thought we could continue to ride the wave of growth.
Boy, were we wrong!
Even if I had understood how much the recession would affect my business, I don’t think I would have been prepared for the near total destruction it had on so many of us.
Perhaps that’s why everyone is being so cautious right now—it’s close enough in our rear-view mirrors that we know what to expect.
Knowing it’s coming can help.
And even if the downturn doesn’t happen for a year or two, it’s best to be prepared.
Communications as an Early Warning Recession Sign
Communication tends to be an early indicator of economic changes and I’m seeing some of the same trends we saw in 2007 and 2008, such as:
- Clients have begun to take marketing and communications in-house
- Retainers are drying up in favor of projects
- Clients won’t negotiate a budget increase for next year
- Prospects are slower to make decisions
In my work with agency owners, they’ve said this entire year has been like that.
It could very well that people are being cautious, but we definitely continue to see—for lack of a better term—a tightening of the belts.
We’re doing it in my business, too.
When times are good, we all tend to get comfortable and perhaps spend money on things we don’t really need.
When we anticipate a down economy, we all retreat.
It’s probably the opposite of what we should do, but human nature is very strong.
The Time to Prepare for a Recession is Now
If we are indeed headed into another recession, Forbes offers advice on how to prepare and suggest it’s important to:
- Manage profitability
- Identify and maintain your strengths and best customers
- Be ready to decide what you can stop doing
- Manage liquidity like you do your profitability
You need to develop a plan for each of these.
Spin Sucks Podcast
In this week’s Spin Sucks Podcast, we talk about:
- Why it’s important to know your profit margins and your expenses, so if it comes time to cut, you have a plan and can save the cash you need in a down economy
- How to optimize your client mix and build relationships that could help you weather the storm
- How to involve your team in planning so they’re on board with your strategy for various outcomes
- Tips for developing new products and monitoring your cash flow
Have you managed your business through a recession? What did you do to help you survive?
Please share your thoughts and stories in the comments.