What’s the quickest way to worry a business leader? Whisper the word ‘recession’ and see how they react. Just thinking about future economic downturn isn’t fun. And most business owners prefer to silently wish it never affects them, but you know the Saddock Advisory team loves to plan. There are many reasons why we think a business recession strategy is crucial for any business across any industry.
No matter the economic climate, having a recession business strategy in place is necessary. We’ll help you keep an eye on leading market indicators and macroeconomics to advise you on how to maneuver your company.
Recession doesn’t have to be a dirty word in the business world, because as with most things in life, with the right strategy in place you can navigate your way around and make it through the tough times. Keep reading for information that could help plan your own recession strategy.
We’ll collaborate on your business history, goals, and concerns and then set up a recession strategy that aligns with your needs, if you partner with us.
Planning a Recession Strategy for Your Business
Our economy is cyclical and is impacted by world events and the global growth of consumer demand. Smart CEOs and business leaders are taking the right measures today to prepare for a less strong economy.
Here are some of the aspects we find essential for ensuring business success before, during, and after a recession hits. Talk of recession pops up every once in a while and even though it may seem daunting, preparing for the worst is the best defense.
1. Get On Top of Debt
One of the easiest things business leaders can do is get into debt. This is because low interest rates and readily accessible capital during the good times can lead you on a one-way road to debt.
But once the easy money path is blocked (as it usually is during periods of recession) debt can be crushing. Work with us to get a handle on your debt load and redirect money used for debt to build cash reserves instead.
2. Test the Stress
While planning certainly helps, there are always issues that can’t be predicted. But running stress-tests on your business could give insight into various crises and disaster scenarios and allow you the luxury of crafting a contingency plan should these problems ever truly arise. Unexpected developments can derail a business, but you can mitigate those risks when you plan.
3. Review Your Cash Reserve
Having cash on hand will be the foundation for any solid recession strategy. What’s your current cash reserve look like? Let’s review it and increase it.
4. Focus on Customer Base
The phrase “never put all your eggs into one basket” is perhaps the best way for us to get this point across. If you rely on one or two large clients, how will your business be affected if you lost them?
Maybe you’re prepared for a recession, but if they aren’t, you’ll take a hit as well. Grow your customer base and safeguard your business from any unexpected losses.
5. Lower Portfolio Volatility
When you work with Saddock Advisory, we’ll alert you when recession signals are on the horizon. This is the best time to sell off volatile stocks (think biotechs, newly issued IPOs, etc.).
6. Look at International Expansion
Diversifying your business could help you make up for shortfalls in one market. Exporting opens you up to more opportunities but requires meticulous planning and market research. Then check to make sure you have a good balance of national and international stocks and bonds.
No one knows exactly when a recession will strike. But it will eventually happen, and with the right preparation, you can ease the blow and get past the harder times.
The Saddock Approach
If you’re interested in learning more about the above approaches as well as some other strategic planning methods, let’s get together! We want to learn more about your company and your vision, and we’ll tell you how we can serve you best. Get in touch with us by filling out our online contact form, giving us a call at 972.437.5201, or shoot us a message at info@saddock.com.