Let’s name it. People are on edge… Across the board, we are all feeling the effects this recession is having on our lives and our businesses.
As a millennial, this is my first time navigating this as a small business owner. In 2008, I was in college, and although I remember the impact it had on my family and many of our friends, for the most part, I was not super affected.
We founded our business in 2017 and up until now it’s been smooth sailing (for the most part). But just like sailing, rough waters are inevitable. Though it can feel scary, if your boat is solid, it’s time to settle in for what is sure to be a bit of a choppy ride.
As entrepreneurs we believe we have the power to create revenue and sales, but there are forces beyond our control that dictate a lot of this.
As a household of entrepreneurs, even though we have known this was inevitable at some point, we still had to make some big decisions quickly with the help of our parents and mentors to prepare.
I want to share with you some of the advice I have received about how to best navigate this time as a business owner, and just as an adult in general…
This has allowed me to feel more in control and actually stay in the abundance mindset. We have had to make some tough decisions and learn some big lessons which I have outlined below:
“You can’t control your revenue, you can only control your costs.”
Here are my 4 tips for surviving (dare I say thriving) during a recession:
#1 Talk to your parents and mentors. I cannot stress this enough. They have lived through not one but multiple recessions and have a knowledge and understanding of business and the economy that is extremely valuable. And if your Dad is anything like mine, he cannot wait to tell you all about it!
#2 Focus on controlling your costs. Look at what is profitable in your business. What is high margin vs low margin. I literally made a list in my phone. I had to make the decision to let go of some projects that were too low margin for us. Focus on what is profitable, and drop whatever isn’t making you money… for now. For me this looked like pausing my Pinterest campaign, scaling back on podcast production, postponing a mastermind, and cutting costs wherever I could in my business and in my personal life.
#3 In a recession, cash is king. Aka pay your debts. As many small business owners, we too have accumulated debt, and we have pivoted quickly and restructured our business in the past month to pay off as much of it as we can. Business owners who are in debt are not as profitable, and these are the business that will take a bigger hit.
#4 Settle in. This is a normal part of the business cycle. For many businesses with a good profit margin and an honest business model, it is a time to refresh and cleanse. This is not the end of the world.
And here’s the good news! The businesses who make these tough decisions now, and who are willing to pivot quickly, will have the opportunity to capture the business of your competitors.
So get ready!
Cut costs – maximize cash – and settle in.
… and remember you are not alone. Everyone is feeling the effects of this and we will come out stronger and more prepared for the next business cycle.
We’ve got this. We are in this together.
The mindset you keep during this time is just as important as the actions you take.
Sending you and your business lots of love and positive vibes.