With the passing time, we have all learned the importance of investment and almost everyone wants to be an entrepreneur. While it is good to have investments and multiple streams of income, it also brings a lot of risks with it because being in business is not that easy.
When you are an employee of someone you are then their responsibility, you just have to work your shift, and then you are free as a bird, but few of us (including me) consider that freedom more like a prison. People now just do not want to work under anyone; they like to be their own boss. A running business gives them that, but it brings another kind of prison, a prison that takes the spontaneous acts from your life because now you have to think very carefully before making every move as you are not the only one you are responsible for. Freedom is considered easy, but it is not, as Captain America said himself, the price of freedom is high, it always has been.
Where the business has so many risks, the risk of recession is among the most concerned ones. We have recently experienced the recession period of the economic cycle, and we sure do not want to see that again but there are things you cannot control, and there are things that you can. We cannot control-entirely, the economic cycle but we sure can take measures to ensure our business remains steady at that time.
Following are the five tips that will prepare your company for a hard time of economic recession.
- HAVE AN EMERGENCY PLAN
A good business person is someone who realizes that everything should be well planned yet not everything can be predicted, so they take every measure to ensure their business is safe and secure. For any future crisis, it is essential to make an emergency plan. Following are the things that could help with an emergency plan.
- MULTIPLE STREAMS
It is better to have multiple streams of income whenever you can, so that, even if one of your business is going downwards the other one can lift your up but make sure that you are ready for the other investment and not rushing yourself into it as every income stream requires your attention.
Multiple income streams not just mean investing is a business that you have to run, you can also be a sleeping partner of a firm, you can invest in a mutual bond or can be a peer to peer lender.
- BUDGET CUTDOWNS
Always plan out your business in a way that you can cut down your expenses any time you need by setting up priorities.
- BRING UNIQUENESS
A business that knows its strengths and weakness has a better chance of surviving in the recession than any other business. Ask your employees to have a SWOT analysis and on the basis of the results come up with a unique selling point, something that only your company can serve.
In recession period, the major loss occurs on the inside sources you have, the research department, content marketers, advertisement department and training and development team. Try to outsource anything that you can or anything that is your weakness.
- EXPAND YOUR CLIENT/CUSTOMER POOL
Never rely on just one client or customer, I repeat, NEVER RELAY ON ONE CLIENT OR CUSTOMER. Recession hits every one of us differently, and if you have a limited range of clients and recession hit them hard then keep in mind, it will cost you too. Having a diverse client pool is the answer to the questions.
- STRESS TEST
We have established the fact that not every risk can be predicted, so what you have to do is to create a situation that the country is going through the recession and note down every issue that occurs in that role play and try to be prepared for such measures.
Author Bio: Sarah Smith has been a personal finance author for the last five years. She is also, an independent and very passionate finance and investment advisor. She regularly posts at PersonalIncome.org.