I have found that by creating multiple revenue streams you are able to recession proof your business. This is by far one of the most effective ways to ensure a steady cash flow and continue running your business during an economic recession. Even if you have a great 9-5 job or startup that pays you well, you need to diversify your income streams. Keep your job but pick a side hustle that brings in extra cash. You don’t have to work on it 24/7. Invest at least 2 hours a day or less to monitor and keep it afloat.
There are countless businesses you can start today that don’t require too much money or time. Brainstorm passive income ideas and pick one that interests you. Focus on turning it into a business. Some of the most lucrative passive income ideas to consider are dropshipping, online courses, blogging, coaching, writing eBooks, affiliate marketing, and opening an online store.
Consider your skills or interests to ensure success. Choose something that you are passionate about. Go with what you know you will enjoy working on years from now to ensure you don’t quit when things get tough.
Once you pick your side hustle, set sales goals and focus on growing the business. Use the money you make to grow your business. Save a certain percentage monthly or as often as you receive your earnings. Use your savings only during a recession.
Look for investment opportunities and make long-term investments. Choose businesses you are familiar with and ones you believe in to avoid losses and ensure returns.
Diversify your investments to increase earnings and your chances of success. Learn about investing or hire a financial advisor to help you identify smart investment opportunities, manage your finances, make informed decisions, avoid losses, and ensure profits.
Manage Your Cash Flow to Recession Proof Your Business
Managing your cash flow, accounting for every cent, and knowing where your money is going will set you up for success and help recession proof your business. Maintaining a steady cash flow during a recession is difficult if not impossible, so do your due diligence before it happens.
Consider your main income source. How do you fund your business? Where does the money you use to run daily processes come from? Does the business run itself or do you rely on other income sources? If you use other accounts to keep the company afloat, look for ways to improve your product or service so that you don’t have to borrow money from other accounts.
If the business runs itself, pay attention to your key performance indicators. Where is the money coming from? Which product or service brings in more money? Which processes generate revenue and get you more sales? Invest in processes or offers that bring in more buyers.
Identify areas that need improvement and make the necessary adjustments. For example, which processes are failing? And Which ones aren’t as effective as you want them to be? Isolate them and determine if they are worth the investment.
Another effective way to manage your cash flow is to cut unnecessary spending. Know where your money is going and determine whether or not it’s worth the investment. Have a look at all the memberships, subscriptions, and services you are paying for that your business can operate without. Cancel unnecessary subscriptions or memberships and discontinue services.
Use the money you save to fund important business processes and invest in things that align with your business goals.
Consider the important services or subscriptions you are paying for. Can you afford to continue paying for those services and simultaneously grow your business? If not, look for less costly options. But make sure you get value for your money.
Managing your cash flow is key to not only running and growing your business but preparing it for an economic downturn. So, prioritize it.
Recession Proof Your Business by Maintaining an Emergency Cash Fund
Build an emergency fund to avoid going through your business account to cover emergencies or other unexpected expenses. Open an emergency account and constantly deposit money into it.
Save as often and as you can. Be consistent. Set aside a certain percentage of your earnings and channel the money into your emergency account. If you receive money weekly, save weekly. If you make money monthly, save monthly.
Building an emergency fund is an ongoing process that requires dedication and proper planning. If you want to have $30,000 on your account in 3 years, take it one day at a time. Save daily, weekly, and monthly. Be patient and understand that the money will eventually add up. When the recession hit in 2008, and then the pandemic in 2020, I was prepared to cover all of my expenses easily because I’d been actively doing what I’m sharing with you here.
Setting aside money for emergencies allows you to continue running your business, avoid getting into debt, and ensures you don’t use your business funds to cover unexpected expenses. It is key to surviving a recession, ensuring a steady cash flow, and keeping your business afloat during uncertain times.
I’m a Wall Street Journal and USA Today bestselling author, an independent publisher, and serial entrepreneur Connie Ragen Green and would love to connect with you. If you’re new to the world of online entrepreneurship please check out my training on how to make your first income online at 3 Day eBiz (Use Code MAKEITHAPPEN for a Discount) and learn how to gain an unfair advantage when it comes to building a lucrative online business.