How To Keep Your Business Up When The Economy Turns Down
Most of us are sitting in fear and anticipation of a long-term recession. As an entrepreneur, you may feel this even more deeply. After all, your business is what supports your family, and you have employees counting on you. Today’s tips are brought to you by JST Investment Consulting and offer suggestions on how to safeguard yourself against an economic downturn.
Form Your LLC as Soon as Possible
One of the most important things a small business can do is take a quick look at its structure. If you’re currently a sole proprietor (which is not necessarily a formal structure), it’s time to convert to an LLC. As a limited liability company, you likely won’t get hit with personal debt if something happens with your company. Instead of spending the money on an attorney, use an online formation service and research local and state regulations before filing.
Get Your Financial Records Organized
If you’re currently holding onto paper files, now’s the time to get acquainted with PDFs. Managed Outsourced Solutions explains that there are many ways to digitize your files, including specialty devices, scanners, and apps. Once you have your files scanned, you can use an online tool to create PDFs. Click here for more info about how you can merge these documents into large files or separate for different purposes. PDFs splitting tools make it easier to pull the exact information you need so that you can share it with pertinent parties. You can even rename split segments of your document so that these are easier to find.
Make Friends with Your Current Customers.
Here’s a fun fact: it will cost you around five times more to get a new customer than it is to keep your current ones coming back. Even more interesting is the fact that maintaining a 5% customer retention rate can boost your profits up to 95%. While you might not want to quit marketing to your preferred customer, it pays to prioritize those that have already established an interest in your business.
Avoid the Temptation to Downsize Your Staff
As a small business owner, you’re probably looking for ways to save money now. Don’t let payroll be your first cut (and if you do have to reduce the staff, be empathetic and compassionate). Your employees already know your business, they have relationships with your customers, and you owe it to yourself and your employees to keep your business going as close to fully staffed as possible.
In fact, do what you can to cut costs while continuing to show your staff how much you appreciate them. Contact JST Investment Consulting to discuss low cost life insurance options you can offer your employees.
Look for Low-Cost, High-Profit Products
While the products you sell are dependent upon your business, most industries have multiple options with exceptionally high profit margins that may help float you through a rough time. The Website Builder Expert blog suggests looking for things that are high quality with limited competition and that are easy to ship and sellable all year.
Create Relationships with Other Businesses
Compatibility is key when you’re looking to create a mutually beneficial relationship with other businesses. Since reciprocity is the act of providing benefits to one another, look for businesses that can refer customers to you and that you can, in turn, refer people to. For example, if you own a local drugstore, make friends with a nutrition shop. You may not sell certain health supplements, while the nutrition shop can’t really offer a professional opinion on vitamins.
Master Your Marketing
Last but certainly not least important, prioritize your marketing strategies. This is especially important for small businesses that don’t yet have a large and sustainable customer base. Social Eyes Marketing can help, especially if you’re looking to establish or grow your online presence.
Be Strategic During the Downturn
When the economy isn’t doing well, that can shake things up for you as a business owner. Put yourself on solid ground by forming your LLC, keeping organized, and following the other tips in today’s post. While no one can predict the future, putting measures into place now can help you weather the storm that is to come.
This article was written by our featured contributor, Sara Bailey of Thewidow.net. As a widow and mother of two, she knows from experience how important it is for parents to have a strong financial plan.
Excerpt from Thewidow.net: “Like many people who have lost the love of their life, I never in a million years thought I’d be here. On my 40th birthday — which I spent with my husband and our two kids bowling, devouring cupcakes, and laughing more than I ever thought was possible — I never dreamed that by my 41st, I’d be a grieving single mom raising a son and daughter on her own. But here I am, and with each passing day, I get a little stronger, and life gets a little easier.” If you or you know someone who may be facing similar challenges, please visit Sara’s website for support.
Image via Pexels
JST Investment Consulting does not provide tax or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable. The information in these materials may change at any time and without notice.
