{"id":18,"date":"2020-11-16T08:34:55","date_gmt":"2020-11-16T16:34:55","guid":{"rendered":"https:\/\/hengreamaze.wordpress.com\/2020\/11\/16\/drafting-your-2021-business-plan-heres-how-to-recession-proof-it\/"},"modified":"2023-08-10T23:43:59","modified_gmt":"2023-08-11T06:43:59","slug":"drafting-your-2021-business-plan-heres-how-to-recession-proof-it","status":"publish","type":"post","link":"https:\/\/www.reamaze.com\/blog\/drafting-your-2021-business-plan-heres-how-to-recession-proof-it\/","title":{"rendered":"Drafting Your 2021 Business Plan? Here\u2019s How to Recession-Proof It"},"content":{"rendered":"

Guest Post by Samantha Rupp<\/p>\n

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If there\u2019s one thing the past 15 years has taught American business owners, it\u2019s that recessions are inevitable. After the 2008 recession, many thought that we wouldn\u2019t be due for another for a few decades\u200a\u2014\u200athat is, until COVID-19 came around and sent the economy downhill<\/a> fast.<\/p>\n

That means that, for many startup and small-to-medium sized business owners, a top priority should be planning for a recession. The last thing you want is to end up one of the 100,000 small businesses<\/a> that shut down permanently due to the pandemic and recession.<\/p>\n

That\u2019s why, today, we\u2019re focusing on recession-proofing. First, a quick disclaimer: there is a lot of unpredictability in the world of business. So, while there\u2019s no truly<\/em> recession-proof solution in many cases, there are actionable steps that you can take to minimize the potential for recession damage.<\/p>\n

Let\u2019s take a look at some of the moves you can make now to prevent a downturn destroying your business later.<\/p>\n

Start with\u00a0savings<\/h3>\n

Just like in the world of personal finance, it\u2019s important for your small business to also have emergency savings built up. This can be difficult, as for many businesses, there\u2019s little left over at the end of the month after all your regular costs and salaries have been paid.<\/p>\n

However, it\u2019s not impossible; and it\u2019s essential if you want to be able to survive a recession. Emergency savings can help cover expenses during the first few weeks or months of a recession, when you need time to decide what your next move is.<\/p>\n

Once customers or clients start drying up (because they\u2019ve run out of funds themselves), too many business owners immediately respond by shutting down their shops, fearing that they\u2019ll end up losing too much money if they try to wait out the recession. However, if you have emergency savings in store, you\u2019ll have the leverage you need to cover costs without going into debt. This gives you time to sit down and figure out how long you can realistically wait out the downturn, or whether you can scale back without shutting down entirely.<\/p>\n

Having an emergency savings isn\u2019t a guarantee that you\u2019ll be able to make it through the recession<\/a>, but it\u2019s something that you can rely on to give you breathing room during a crisis. And that can mean the difference between making a hasty and panicked decision, and one that\u2019s well thought out and beneficial to yourself and your employees.<\/p>\n

Consider your\u00a0assets<\/h3>\n

Your assets are a part of your business\u2019s total wealth. Assets include tangible assets like buildings, trucks, forklifts, printers, and other high-value items, but they also include abstract things like your investment portfolio, intellectual property, patents, and more.<\/p>\n

Why are your assets important when recession-proofing your business? It\u2019s pretty straightforward: owning the right assets can mean the difference between losing all your money in a market downturn and being able to stay afloat.<\/p>\n

It\u2019s easiest to see why with an example:<\/p>\n