Recessions come and go, but your business shouldn’t have to!

Believe it or not, there are a few things you can do to ensure your business remains profitable during difficult economic times.

Starting a business is one of the most rewarding career paths one can pursue.

Being an entrepreneur is fulfilling to the soul and infinitely opportunistic… Entrepreneurs have the unlimited potential to achieve anything they set their minds to.

If anyone else tells you otherwise, you are talking to the wrong person.  

The Economy Isn’t Always Rainbows and Sunshine…

The economy isn’t always great, but this doesn’t mean you can’t prepare and take the necessary precautions to ensure your business is maximizing its potential.

Starting a business isn’t easy, but when you are truly passionate about what you do, the difficulties are merely opportunities to learn.

One of the struggles entrepreneurs ponder upon is what they can do during difficult economic times…

What if I told you, that there were a few ways you could “recession-proof” your business?

How to Build a Recession-Proof Business:

1. Build Your Business in a Wealthy Area

One of the most valuable lessons I have learned and witnessed is the importance of choosing the right location for your business.

Many factors must be taken into consideration before selecting a location but something that remains consistent is opening shop in a wealthy (ish) area. The demographics you are catering to is the first and foremost idea that should be considered, but when it comes to RECESSION-PROOFING your business, the wealthier the area the better.

If your clients are wealthy, you can be sure that your doors will remain open, even during the most difficult economic times.

This became most evident during the recent pandemic…

Why? Because even during recessions and pandemics, the wealthy will still shop.

Of course, the type of business you have may impact how your business performs, but restaurants, boutiques, spas, salons, and everything in between will likely be just fine if you choose to open your business in a wealthy area.

The wealthy will still get their hair done, eat at restaurants, buy clothes, and fulfill whatever their hearts desire… because they CAN.

Take this with a grain of salt, however. Just because you open your business in a wealthy area does not mean it will be successful or recession-proof.

You still need a great business plan with products/services that will keep your customers happy and coming back for more…

2. SAVE. SAVE. SAVE.

Did you know that 45% of Americans have absolutely NOTHING in their savings accounts?

An additional 24% of Americans have less than $1000 in their savings account.

Saving is at the root of building wealth. Those who cannot manage their finances will fail to build a successful business, let alone, a stable life.

3. Build a Network of Other Entrepreneurs

Connecting with others in your industry (and beyond) is important for various reasons…

Not only will your network allow you to lean on others for advice and guidance, but it will also give you access to information that may not necessarily be available to the public’s ears just yet.

Before a recession happens, there tend to be signs of economic distress. Entrepreneurs are always thinking about ways in which they can ensure their business is ready for anything that might hit. Talking to others will help you determine the best approach for your business and allow you to see what others are doing. You can learn from their mistakes and find out what has and hasn’t worked for them.

Observation is key.

As always, take everything with a grain of salt. You should always keep your own goals in mind before moving forward with whatever advice you are given. What might be right for others is not necessarily right for you or your business, which leads me to my next point…

4. Talk to Your Accountant(s)

Your accountants are a resource and guide to help you throughout your entrepreneurial journey.

A good CPA will be able to assist you with the right approach for your business.

During difficult economic times, the government may offer certain programs to assist entrepreneurs (similar to the PPP loan available during the pandemic). Your accountant will walk you through the processes and ways you can benefit.

In general, your accountant(s) should be able to guide you on how you can minimize overhead costs and benefit from certain tax deductions.

You don’t have to be the most financially savvy, but your accountant better be PHENOMENAL.

If you want to be the best entrepreneur possible, you should however have a pretty wide scope of knowledge on the economy and current events that will likely impact your industry and revenue.

A great entrepreneur is constantly seeking ways to improve themselves and their business.

The learning never stops. 

5. Create a Plan

Your future self will thank you.

The importance of preparing should not be overlooked.

Before business slows down, you should do everything you can to create a plan to prepare. Your plan might include writing down play-by-play scenarios that will help minimize errors in the future.

It is a known fact that you should never make decisions while you are emotional (this includes your highest and lowest moments).

Most recently, Elon Musk himself emphasized the importance of following the “PPP Strategy” to survive the recession.

The PPP Strategy: Predict, prepare, and persevere.

Difficult economic times typically create stress for entrepreneurs, which is perfectly normal, but can be minimized if handled properly.

PLAN AHEAD! 

6. Build Great Relationships with Your Clients

Building high-quality relationships with your clients is so important.

One of the biggest reasons your customers will continue to return is whether or not they enjoyed their experience with you, the services you provide, or the products you offer.

Taking a moment to have a conversation with customers and show genuine interest in helping them will go a long way.

Customers want to feel special, acknowledged, and understood. If your customers do not feel as though you understand their needs, they will leave. If they have an unfriendly experience, they will likely go somewhere else (unless the product or services provided are especially unique).

It’s very important that you take care of your clients and show them that you care, CONSISTENTLY.  This will create long-lasting relationships, increase referrals, and open doors to new possibilities that you may have never even imagined.

Customers will continue to give you business if they feel connected to you, the brand, and the services you offer.

7. Diversify Your Investments

You should never put all your eggs in one basket.

This strategy is meant to challenge business owners to think about where they have invested capital, such as fixed assets and external partnerships.

Analyze the return on investments for current holdings and consider shifting funds to existing and new investments with higher returns.

8. Create Multiple Streams of Revenue

Once you have started your business and have a steady stream of income, you should start considering where to invest your remaining funds.

Investing in rental properties, starting another business in a totally different industry, or allocating your money to various mutual funds are all great ways to create multiple streams of income.

⭐️ If you found these tips helpful, don’t forget to share!

READ MORE: 5 Destinations the Wealthy Cannot Resist

ABOUT THE WRITER:

Elena Patestas is a journalist and writer for Valuetainment media. She attended Pepperdine University in Malibu, California, and Adelphi University on Long Island, New York. She was born and raised in Roslyn, New York, and currently lives in Miami, Florida.

Elena is passionate about bringing positive change to our world and believes education is the root to solving many societal problems. After overcoming a chronic health condition, Elena became passionate about health and believes food is the key to preventing dis-ease and achieving optimum health.

Amongst her many goals, she hopes to bring positive, impactful change to our world to create a healthy, financially sound, and unified society.