Build a recession-proofed business. The economy is hard to predict, but top CFOs predict a recession in the first half of 2023. The next recession- if it comes- will likely be longer than what we experimented on during COVID. Regardless of this tentative bad news, a recession will eventually come around at some point. So, as a business owner, it is better to be safe than sorry. Prepare your business for bad times with these three tips:
- Automate time-consuming and monotonous processes
Companies have different processes and requirements to keep business running smoothly. Make sure to automate your processes whenever you can. The goal is to have cheaper and more efficient solutions. Some processes you can automate are:
- Hiring and Onboarding employees, by using automated solutions that distribute the same job post through different platforms like LinkedIn and Indeed. This automated solution makes it easy to track applicants, regardless of the volume.
- Payroll, a payroll software can help with the manual labor of payroll runs, calculations and tax fillings.
- Reassess your hiring plans
Hiring new talent is something that needs to be done with full conscience, and with your long term goals in mind. When it comes to a possible recession, reassessing your hiring plans can be the best thing to do. Make sure to make the best decision by answering the following questions:
- Do we need to add a full-time employee for the company’s needs or can we spread the job among existing employees?
- Can the company fulfill the needs of this position with technology and automation instead of a new employee?
- What will this position look like 6 and 12 months in the future?
After answering these questions you will feel more comfortable about hiring a new employee or not.
- Create a multi-scenario “Downturn Plan”
A good “downturn” plan has three essential elements. Preparing a forecast, preparing action steps and communicating to stakeholders. Let’s review each element.
- A forecast is very important in strategic planning and can be prepared with different factors in consideration. Economic precursors are indicators of an upcoming downturn for your company or the industry. Some economic precursors are interest rates, unemployment rates, disposable income, tax rates, etc. Another important factor in a forecast are the internal indicators. Be aware of whats happening within the company. Sales forecasts, budgets, and production forecasts are great indicators.
- Action steps. Once you have identified a downturn is coming, take the necessary steps. Some examples are increasing your contingency workforce, trying “if, then” scenarios, and developing sales retention plans.
- Communicate to stakeholders. Last but not least, make sure that the people who are involved in your business understand what is going on. Help yourself with metrics and standard reports and make sure everyone is clear on what is going on.
An economic recession will occur. The only question is when. Make sure you focus less on when a recession may occur and more on how to protect your business. Another way to protect your business is making sure you comply with the law and avoid lawsuits from unfair competition or other boundaries you might be unawarely stepping on. If you need help to protect your business, work with a business lawyer. Focus Law is an established and growing law firm that helps clients with various needs. Call us today at (714) 415-2007, or schedule a Kick-off meeting by clicking here.