The arrival of COVID-19 set off a rollercoaster of uncertainty for businesses of all types and sizes, with home businesses among the hardest hit. The experience helped small business owners learn how to weather ups and downs in a short period of time and prepare for the possibility of a recession. However, what happened during the pandemic doesn’t cover everything that happens during a recession. And, it’s time to prepare, because many experts believe a recession is upon us.
Although home businesses tend to have lower overhead, they’re not immune to inflationary pressures. Raising prices goes a long way towards keeping income flowing, but it can also make it difficult to capture new or repeat business.
Maintain Your Current Customer Base
Don’t lose contact with the customers or clients that have been buying from you since you opened your doors. Make sure to keep in touch with them, find out if they have needs you can fulfill, and give something extra for a reduced cost or free if possible. These courtesies put you at the forefront of your customer’s minds when they need to reorder or want to know about your latest offerings. In turn, you keep their business along with maintaining a steady cash flow.
Improve Marketing Efforts
A small business tends to rely on word of mouth or low-key marketing campaigns to save on costs in a normal economy. However, operating during a recession requires making a bigger marketing effort. People don’t stop spending in a recession, but they spend less as a general rule. You need to capture more customers to make up for the loss of sales, and increasing the marketing efforts helps you find more customers and achieve your sales goals.
Use Freelancers or Contractors When Possible
Freelancers or contractors help you expand and contract your labor pool as needed and help make your labor costs predictable. Hiring a contractor enables you to get help for a defined period of time and for a set amount. You can negotiate the length of the contract and how much you’re paying for the work up front. Once the contract has been completed and the deadline has expired, you can opt to re-sign the contractor if you need them in the future.
Open a Line of Credit or Take out a Small Business Administration Loan
A line of credit or a Small Business Administration (SBA) loan are different types of lending products, but they’re designed to meet specific needs. A loan typically consists of a large amount that’s provided up front and paid off over the long term. In contrast, a line of credit helps you cover short-term funding needs. You can learn more about these funding options from a bank that specializes in business banking.
Carson Lappetito, President of Sunwest Bank, advises, “As a business you want to secure financing with a stable institution, especially during times of uncertainty. The US economy is at a tipping point, and rougher times may be ahead for businesses – all of which makes it imperative to secure financing through a stable banking institution.”