How to prepare for a potential recession
- Be adaptable. Be aware of the current economic climate, listen to your client base, and conduct the necessary research to adapt or pivot accordingly.
- Know your finances. Monitor your cash flow, profit margins, and other financial metrics to understand where your business stands.
- Keep investing in your business. Put your funds where they’ll make the most impact. Continue to invest in digital technology to open new channels of business.
- Communicate openly with your team. Keep your team informed about the state of your business and the “why” behind important decisions.
The theory tells us that an economy is undergoing recession if it is experiencing a decline in economic activities or Gross Domestic Product (GDP) growth for two consecutive quarters in a financial year.
A recession is a period where unemployment is high and inflation is at its lowest. All economic activities decline and businesses suffer the most.
According to Curtis Dubay, Chief Economist at the U.S. Chamber of Commerce, other economic indicators like income growth, employment rate, and consumer spending are holding steady, despite falling GDP. While Deutsche Bank’s chief economist Matthew Luzzetti believes that the U.S. economy may tip into a recession by the end of 2023.
Whether the US economy is in a recession is a more difficult question to answer than usual but no matter the likelihood, small businesses can prepare themselves to stay more recession-proof by investing more in their business.
Investing in Digital Technology can innovate your small business, broaden your business reach, generate leads, stay connected with your client base, & secure transactions.
Latest Small Business Technology Trends
Explore the latest technology trends, including artificial intelligence, and interactive shopping, and find out how they can work for you within your business model.
AI applications for small businesses
Artificial intelligence (AI) may sound expensive or like something, only large enterprises use. But today, web applications powered by AI are increasingly used by small businesses in CRM systems, automate marketing campaigns and even enhance cybersecurity.
You will be surprised to know that 49% of shoppers surveyed think their shopping experience would be better if retailers offered promotions or deal specific to past purchases.
So, how do you fulfill it? AI integration with CRM is your answer.
The ultimate goal of AI-based web applications is to enable small businesses to offer more personalized experiences to their customers while automating redundant tasks at the business end.
Dedicated AI applications for e-commerce small businesses can reduce cart abandonment, and increase revenue per customer by cross-selling, up-selling, or dynamic discounts & deals based on user history.
AI also finds applications in customer service support. Conversational AI chatbots can lower customer service wait times, thereby directly enhancing customer experience. You can even combine AI chatbots with live chat agents to increase customer issue resolution rates.
In recent times, affordable cybersecurity solutions powered by AI are being offered by various companies. This is particularly helpful for small businesses that have eCommerce stores and coaching centers with huge amounts of data being generated every day.
AI can monitor, identify, and track user activity and behavior to recognize things that are relevant and acceptable – links, email messages, information inputs and time ranges for tasks. If something is outside of typical patterns, AI reacts to quickly remedy or remove the threat.
Tech assistant shopping experience
Mobile and social media commerce is the next big thing, if not already arrived!
According to Google search data, 59% of shoppers surveyed say that being able to shop on mobile is important when deciding which brand or retailer to buy from.
Small businesses are required to focus on developing mobile-friendly websites that offer an interactive user experience, faster payments, and security from cyber threats.
Furthermore, a global survey found that 56% of in-store shoppers used their smartphones to shop or research items while they were in a store in the past week
It indicates that your business should invest in empowering buyers rather than just selling online. You need a solid content marketing strategy to grow more inbound leads and build a knowledge brand.
You may read our previous blog to decide whether a freelancer or a digital agency can help you deploy the latest web development & digital marketing tools at the most competitive price.
More Strategies to Make Your Small Business Recession-Proof
Diversify Your Small Business
Covid-19 was no less than a recession. Many small businesses quickly adopted new business models to reflect the current crisis and created newer revenue streams.
Experiment with different price points and models; focus on other target markets that are related to your business.
Harvard Business Review suggests traditional businesses like restaurants offer “a flat rate for a set number of meals per week or per month, with limited menu choices.” They could increase their margins as they enjoy good patronage in the market.
Another interesting model could be “to offer a combination of precooked dishes with sides or additions that could be prepared at home using ingredients supplied by the restaurant. The restaurant could send a link to a video that walks the customer through preparation, thus incorporating an experiential and learning element.”
We can help you if you’re looking for a trusted partner in business consultancy and growth online. Click here to connect with us.
Open A Business Line Of Credit
A business line of credit is different from traditional small business loans, however much similar to business credit cards but with a higher credit limit. A business line of credit improves cash flow and helps in meeting unexpected short-term expenses to take advantage of new business opportunities.
Educate yourself more on eligibility and providers of the business line of credit for your small business.
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Small businesses (including but not limited to health & wellness, lifestyle, beauty, and food industries) can partner with us to benefit from our innovative web solutions or insightful digital marketing strategies to scale up online. We invite you to connect with us anytime to take forward this discussion.