Don’t think it’s not coming. I graduated in the 2002 recession. It took a year to get a job in my field. The next one came like clockwork in 2008 and was a contributor to my first business failure. Recessions usually come every 6-8 years. That means, like a dormant volcano, we’re overdue for a catastrophic eruption.
Step 1: Get Cash Flow Now
While the economy is good and loan or line of credit requirements are light you should take advantage of it. Apply for them now. Personally, I prefer to double up and I have an account called, Runway. This is a business account with savings to cover 3-6 months’ overhead. When I moved here from Boston I used up my Runway, but it kept me from accruing additional debt at an already strained time. You build runway by depositing a percentage of your gross revenue into that account and DON’T TOUCH IT! You’ll need it later if you don’t do the next step.
Step 2: Build Revenue Streams
This is especially important for service-based businesses. If all your eggs are in one basket what happens when the basket rips open? I speak from experience. I wasn’t doing all the steps in this article. All my revenue came from one service. Everyone stopped marketing in 2008 and in 3 months I went from regular cash flow to zero. When you have money coming in from multiple sources, if one dries up you only lose a percentage of your income—not all of it. The best way to do that is to create Continuity and Ascension Plans. One way to build another revenue stream is to create a product.
Step 3: Create Products
People will always buy things no matter the economy. If you have the right product your business could become recession-proof. Your product can be physical or digital. The biggest trend, which will be a permanent shift once the economy hits, is online education. This is the biggest opportunity for those who have over 10 years experience doing something. Turn your knowledge into cash by creating an online course. Overall, don’t make the cardinal sin most businesses make when the recession hits. (See step 4.)
Step 4: Don’t Stop Marketing
Everyone stops marketing. They hunker down and ride out the storm, but that’s not the right way. Marketing raises awareness and gets people in the door. Who’s coming in if no one knows you still exist and didn’t go down with the ship? While times are good, you need to track your campaigns to see what really works so when the recession hits, you’re maximizing your money by spending in places that gets results.
Step 5: Ride Out the Storm
I worked overnight for 10 years to support my family while I spent my days building my next business. You do what’s necessary to keep the dream alive because it’s only by controlling your income that you can leverage it to accomplish your life’s goals. So if all else fails, but you still have a small handful of clients—do what it takes to keep them happy. Supplement the loss of income with other work until the recession ends and you can grow again.
Recessions and loss of business are certainly harrowing times. However, if you plan now, then you may actually grow in the recession rather than sink. Until next time I wish you much success turning your business into an amazing brand.
