Community News C HOW TO PREPARE FOR A RECESSION…JUST IN CASE
By Dean Swanson, volunteer Certified SCORE Mentor and former SCORE Chapter Chair, District Director, and Regional Vice President for the North West Region S ome people predict a recession is coming, while others dismiss the notion since the nation is essentially at full employment. But many small business owners are worried a recession is looming. According to the latest Small Business Recovery Report, issued last week by Kabbage from American Express, 83% of small business owners are concerned a recession is coming soon. But entrepreneurs tend to be optimistic, and in that vein, 80% are confident they can withstand it. Rieva Lesonsky, one of SCORE’s content partners and president and CEO of GrowBiz Media, a custom content and media company focusing on small business and entrepreneurship, wrote a great blog on this topic. I share that with you in this column. Interestingly, the business owners are so confident they can withstand a recession because they survived the COVID-19 pandemic. They say the pandemic “helped them find a greater sense of resilience and preparedness to be successful in the future, despite economic turbulence.” Due to inflationary pressures, many of the businesses surveyed have already raised their prices, so they’re in a stronger financial position in case a recession comes, but many are still struggling with supply chain disruptions. Cash Flow is King. As I was doing the research for this blog, I came across an interview I did with my pal Steve Strauss about surviving a recession—in 2009! And what I said then is still relevant today. While cash flow is always king, it becomes more paramount during recessions because customers and clients often pay you later than usual. Net 30 becomes net 60 in a hurry. It’s critical for you to keep your cash flowing. Start by
examining your accounts receivable and payable right now. What’s your monthly cash flow today? Are there invoices that are past due? If so, call those customers and try to collect now. Due to inflation, it’s likely you’re spending more than you typically do. Look for areas where you can cut back now before you’re forced to. One area that business owners often overlook is subscriptions and dues. Are you paying for publications or newsletters your rarely read? Are you a dues-paying member of organizations that you never interact with? Are you paying for technology apps you rarely use? Keeping your overhead spending low during a recession will make a significant impact. Are you still operating remotely? This is a smart way to keep costs low. Spend your money wisely. Use credit cards that offer cash back or other relevant rewards. To read more, visit SCORE’s website at https://bit.ly/3lC7k6d
| Advantage Magazine 16
August 2022
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