This article was last updated on April 16, 2022
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Finance experts have been talking about it, politicians have been acting to avoid it, and business owners have been preparing for it; the next recession. And while economic uncertainty may already be there, there is still time to act. It is undeniable that things are going to change for business owners and consumers alike. Buying habits are fast changing, discretionary spending levels are dropping, and shoppers are looking to save rather than to splurge. Regardless of the industry you operate your business in, a looming recession can lead to a financial windfall. Here are some of the most highly recommended ways for business owners to secure their financial foothold.
Have Your Management Team Trained in Operations Management Theory
The best way to keep the money flowing in is to make sure that your business has the proper level of oversight. You can hire a dozen managers and supervisors, but for them to be effective, they have to be trained to be able to sniff out waste, improper financial allocations, and overages. Click here to see how upper level management new hires with a background in operations management theory can present fresh perspectives about how to make your business more profitable. From retraining your staff to enforcing accountability measures, implementing operations management theory will keep your company on solid financial footing. If you happen to be a one-man operation, consider taking some classes on operations management and see what changes you can prompt yourself.
Perform More Employee Reviews
When employees know that they are under review, they are likely to perform to their full potential. Formal employee reviews are structured, allowing all participants to prepare, voice their concerns, and ultimately lead to the best possible outcome for all parties involved. Whether you believe that employee reviews should be performed on a quarterly or even yearly basis, every person at your company should be made aware of the date of their meeting well in advance. Oftentimes, staff productivity levels can be improved via positive reinforcement, so remember to reward high achievers with raises, bonuses, promotions, and placements on special projects.
Announce Impending Workplace Policy Changes in Writing
Want to see that your staff make smooth transitions when new policies, procedures, and rules come about? Put up plenty of notices, in bold print, in all of the areas that staff usually visit. No, you don't really need to put reminders about timecard policy changes in the bathroom, but it is recommended you post similar updates in:
-Employee locker rooms
-Breakrooms
-Office areas
-Bulletin boards
-Storage rooms
-Human resources
Send out a couple of emails alerting staff to upcoming changes at least a week apart to be certain that all of your bases are covered. Alternatively, you can have your employees sign off and acknowledge that they have been made aware of any major company policy changes before they are enacted. Give your workers a copy of all documentation and keep the original in their personnel files, too.
Implement a Bare-Bones Operational Strategy
In the near future, restaurants are going to be offering limited menus, with more locally sourced foods to cut down on costs. Apartment complexes around the country have started to send office staff home, instead having them work remotely and only seeing potential tenants via appointment. You can still earn a profit when your business runs on a bare-bones operational schedule. It can take some getting used to, but people of all walks of life are preparing themselves for major life changes.
Examine the Books for Where You Can Reduce Overages
If you aren't exceedingly careful, waste and overages can account for a large part of the budget. If your office manager has a habit of keeping all of the lights and work computers turned on when they lock up at the end of the business day, your energy bills are going to be unnecessarily inflated. This is why you should be calling various vendors in search of the best prices and asking companies you have an existing relationship with for discounts regularly.
Prepare for the Absolute Worst-Case Scenario
Just how few employees could you keep employed and still have a profitable business? If you were to reduce the number of products and services your company offered, would you still be able to turn a respectable profit? What about cutting back on your hours of operation? Maybe none of these options seem attractive or even viable, but the reality is that business owners have to make tough decisions, and quickly, when the future of their companies depend on it. Considering what you can do to run a skeleton operation doesn't mean that you need to cut your workers' pay across the board. Rather, developing a strategy that will enable you to stay in business will help to prevent your company from filing for bankruptcy protection.
Secure Additional Business Loans and Funding Before You Need It
Banks are increasing minimum credit requirements for consumer and business loan products. In fact, some lenders have put an indefinite pause on new applicants for various products, such as credit cards and loan refinancing. Everything might be okay right now, but if your company were to need additional funds to stay afloat in the future, what would you do if you weren't able to secure a loan? Traditional loans through major lenders come with the best rates, but they also have the most restrictive requirements. If you have had credit or financial troubles in the recent past, peer lending may be a better and more realistic choice.
Have Employees Work Remotely
There are many industries in which having 100 percent of a workforce performing duties from home is unrealistic. However, uncertain times can call for unusual measures. Now is the time to start setting up web-based employee portals that can be accessed off-site. There are likely at least a few tasks that some of your workers can do from home, such as payroll, research, or even employee interviews. Allowing staff to work from home will allow your company to stay operational, whether inclement weather gets in the way of things or for operational cost cutting reasons.
Realize that recessions and changes in the global economy are cyclical. While you are busy reminiscing over the good times, remember that they will soon return. The crucial part is that you do whatever it takes to keep your company running in the interim. Sooner than you can expect, you will be back riding high.
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