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Zehnder Communications, Inc.
2019-11-18T18:46:17+00:00

Five Ways to Recession-Proof Your Business



If you’ve been paying attention to the news the past few months, you likely have heard warnings about an impending recession, or two consecutive quarters of negative economic growth. Since the U.S. is currently in the midst of the longest economic expansion in its history, investors, business owners and consumers are starting to wonder if a downturn is due.

While there are plenty of reasons to be hopeful (strong job growth, lower interest rates) and reasons to worry (trade conflict, the Treasury bond market), it’s more important for companies to focus on what they can do to prepare for a recession than on predicting when the next one will occur.  

Fortunately, the Zehnder Business Strategy team has compiled a list of five things your company can do right now to ensure that you not only survive a recession, but come out afterward with higher earnings and an improved position.

 

  1. Be Proactive
    It is important to develop a recession contingency plan with an end state in mind. By planning for what the company will look like after the downturn and three years afterward, you will be able to pinpoint the growth opportunities that will provide the most ROI.

  2. Avoid a One-Size-Fits-All Approach
    Different customer segments, and even different parts of your business, will require varying approaches to survive. Determining where to cut versus where to invest is a delicate, but important balancing act. 

  3. Fight the Urge to Purge
    Your first instinct during a recession may be to cut costs through whatever means necessary. Rash decisions, like mass employee layoffs and slash-and-burn cost cutting, should be avoided.

  4. Enact a Strong Financial Strategy
    Practice early cost management while the economy is still growing. Focus on managing the balance sheet, not just your profits and losses: reduce your debt and create a cash reserve that can be used for investment later. 

  5. Invest in Growth
    An economic downturn is when you should be increasing your investments in R&D and marketing, not cutting it. By utilizing your improved cash standing, you’ll be in a great position to pursue valuable merger and acquisition opportunities that might not have been available before.

Historically, companies that enter the recession with a plan of action do better than companies that do not. Utilizing these strategies will put your company ahead of the competition before a recession hits and enable you to out-perform your competition afterward. 

Download our Recession Roadmap below and reach out to Jennifer Boneno today at jboneno@z-comm.com to learn more about how Zehnder’s Business Strategy team can help prepare your company for any economic turmoil.

 


Posted By Jeremy Hunnewell

CFO & Business Strategist
Perspectives
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