According to Investopedia, a recession is defined as a significant, widespread, and prolonged downturn in economic activity. While there may be several leading indicators that may point to a recession – such as increased layoffs at big Tech companies or even changes in consumer spending behaviors – the truth of the matter is that we really only know we are in a recession after we are already in it.
For some of us, this may be our first time experiencing a recession as business owners. All of the angst, overwhelm and anxiousness we may be feeling about the uncertainty that lies ahead is completely normal. Trust me, you are not alone.
I am a planner by nature so If I’m being honest, uncertainty is incredibly uncomfortable for me. I like knowing what’s next and feeling like I have no control over what’s “next” is really hard. One thing I find helpful in times of uncertainty is to focus on the things that I can control and try my hardest to not worry about what I can’t. So if you are like me, you are looking for some tips to control the uncertainty that lies ahead. Keep reading for some practical tips to recession proof your business and prepare for the months ahead.
During times of uncertainty, I find myself getting all up in my head.If you can relate, I want you to take some time to reflect over how far you’ve come! Hopefully, this will help you center yourself, and serve as a gentle reminder that everything is temporary.
Take the space and give yourself grace. You got this!
So after you’ve taken some time to breathe and reset, it’s time to get uncomfortable. Generally, when prospects reach out to us for help – many have gotten to a point where they have been avoiding their numbers.
In my opinion, one of the most important things you can do right now is get incredibly intimate with your numbers. In order to plan for what’s ahead, you have to make sure you have a realistic perspective on what has happened in the past.
How do you do that?
After you’ve gotten the tactical part out the way, it’s time to use those numbers to make some predictions.
Keeping with the theme of focusing on what YOU can control in times of uncertainty – I also think it’s just as important to plan for future expenses.
While you might not necessarily be comfortable making that investment right now – it’s a good idea to start thinking about it and setting aside a reserve so when the time is right – you can execute.
In general, it’s good to have at least 3 – 6 months set aside to cover your fixed expenses. In this inflationary economy – it is probably a good time to revisit your emergency fund. While you may have had six months of your fixed expenses covered last year – EVERYTHING is more expensive. So go back and re-run your numbers and start planning for some extra cushion if needed.
So there you have it! Five things you can do in order to ease your mind about the recession that may be looming. I encourage you to take some time this weekend and handle at least one of the above. Since I want you to thrive and be successful, check out this freebie to help you organize your expenses and get naked with your finances. As always, sign-up for a discovery call if you are still looking for a virtual CFO to help take your business to the next level financially.