Is Your Business Safe From an Economic Downturn?

Remaining vigilant while sailing prosperous seas will help you weather future economic storms

Is Your Business Safe From an Economic Downturn?

Interested in Business & Technology ?

Get Business & Technology articles, news and videos right in your inbox! Sign up now.

Business & Technology + Get Alerts

This is not an article about political prognostication, or economic speculation; rather, it’s about ensuring that your business is prepared for all contingencies. Simply put, none of us know what tomorrow will bring. Although we all hope for the American economy to remain vibrant, there are thousands of independent, external factors that could potentially cause a downturn. The questions for service and contracting professionals to ask are: What will you do to weather any economic storms? How can you prepare your business today for any unwelcome turns tomorrow?

Take a Look at Your Client List

The first thing to do is look at your client list and see how varied and diverse it is. 

Do you have one major client who accounts for a huge percentage of your revenues? If so, then you may be in a more precarious spot than you realize. What if a market crash or recession hits that client hard, they have to make some cutbacks, and you lose their business? Could your business survive it?

Ideally, you’re always working to bring in more customers, rather than leaning heavily on just a handful. A lot of smaller clients, from diverse areas, are key for economic sustainability.

Consider Your Industry

Economic downturns impact different industries in varied ways. It’s worth doing a little research to find out how your industry was impacted by past financial crises and to home in on specific areas of your business that you can grow even during tough times. 

For a portable restroom company, during a financial crisis you’re maybe going to see less demand for luxury items like multiunit restroom trailers for weddings, but there will still be plenty of events that need to supply portable restrooms, as efficiently and as economically as possible. So even if high-end rentals and new construction work drop off, you might actually grow your event service.

Have a Worst-Case-Scenario Budget

If an economic crisis does hit, you may need to make some tweaks to your budget — but what would those tweaks look like? What are some expenses you could curb in order to keep your company afloat?

Try to come up with a worst-case-scenario budget — a bare-bones spending plan that gives you a blueprint for regulating costs should your company’s revenues ever dry up. Look for overhead that’s not necessary, strictly speaking.

Ensure Rainy Day Funds

When times get tough, it can be extraordinarily beneficial to have a little money stowed away to defray surprise costs. For example, what if your vehicle breaks down or you need to quickly replace some restrooms that got damaged? Do you have a savings account to cover these things? If not, now’s a good time to start one — and to have that rainy day fund ready to go, should your financial situation ever take a turn. 

The bottom line for service and contracting business owners is that you can’t stop economic meltdowns from happening, but you can make sure you’re ready to weather them. Use these tips to safeguard your company even against the worst kinds of economic peril.



About the Author

Amanda E. Clark is the president and editor-in-chief of Grammar Chic Inc., a full-service professional writing company. She is a published ghostwriter and editor, and currently under contract with literary agencies in Malibu, California, and Dublin, Ireland. Since founding Grammar Chic in 2008, Clark, along with her team of skilled professional writers, has offered expertise to clients in the creative, business and academic fields. The company accepts a wide range of projects and often engages in content and social media marketing, drafts resumes, press releases, Web content, marketing materials and ghostwritten creative pieces. Contact Clark at www.grammarchic.net.



Discussion

Comments on this site are submitted by users and are not endorsed by nor do they reflect the views or opinions of COLE Publishing, Inc. Comments are moderated before being posted.