With 58% of economists still predicting a recession in 2023, this is a good time to re-assess your cash flow and business decisions.
Our nation’s surprisingly resilient economy — even in the face of steadily rising interest rates — leads many experts to predict that the slowdown will occur later in the year than previously anticipated. In a recent Fortune commentary, Murray Sabrin, Ph.D., opined that major layoffs in the tech and finance will reach other sectors, leading to an inevitable recession.
Impact On Your Agency
Fortunately, there are four primary ways you can mitigate the expected downturn’s impact on your agency.
Modify Your Marketing
While many small business owners (in any industry) often cut their marketing budgets in a downturn, that can be detrimental long-term. It’s wise to evaluate your marketing efforts and streamline them where possible. You need to keep your brand in the marketplace, especially as your competitors cut back on their marketing spend. It also inspires confidence in clients when they see you’re still visible and available to meet their needs and respond to referrals.
Protect Your Revenue
As mentioned above, it’s essential for clients and prospects to see that you’re an active, healthy business. This is a good time to level up your customer service responses and consider deploying grass-roots relationship marketing , especially if your staff has time to personally reach out to existing clients. Stay on top of renewals, insurability rider dates and key events in your clients’ lives.
Optimize Your Operations
Take a close look at your costs to determine where you can save money. Part of it could be as simple as shifting from brand-name products to store brands for office supplies and kitchen supplies, but don’t eliminate all of the “good” stuff (like your staff’s favorite coffee). If your team has time to shop prices for services such as office cleaning, internet, mobile phones and other ongoing costs, those savings can add up too. Communicate the importance of planning ahead and being adaptable, but don’t deliver a message of doom. You want your staff to remain confident and loyal to your team.
Plan Ahead for Capital Needs
Even if your cash flow is currently good, it’s wise to prepare for potential shortfalls by looking into a line of credit or operating capital loans. In addition to allowing you to preserve your assets without needing to tap into them, having accessible capital reduces the likelihood that you’ll need to scramble to meet payroll and overhead if the downturn becomes severe.
Benjamin Franklin was right when he said that “an ounce of prevention is worth a pound of cure.” This is especially true in today’s economy as we anticipate a recession.
We’re here to help you.
Reach out to one of our team members today, and we can discuss the best way to prepare your business.
