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Tag: recession-proof

  • 6 Steps to Becoming a Recession-Proof CEO | Entrepreneur

    6 Steps to Becoming a Recession-Proof CEO | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    The future economic forecast is looking unpredictable. You might be thinking, “What’s new?” The fact of the matter is that there is always uncertainty. 2008 caught millions of people off-guard in a matter of days. It isn’t about pulling back away from this uncertainty, though. It’s about heading towards it with armor on — your business’s economic armor — the kit you probably knew you needed but might not yet have.

    Your business’s armor is essential to its success. Sure, you can go through a few years without it, but you’re just counting on sheer luck here to get through. And just like you cover yourself from head to toe before you go into battle, your business needs to be covered back to front as well. If you haven’t experienced a downturn in business from economic collapse, you might have not ever really considered this. So, what does a recession-proof CEO look like? Let’s build your armor together.

    Related: How to Recession-Proof Your Business

    1. Your helmet: The financial deep dive

    Starting off, let’s get your head covered. Walking around without knowing your finances is like heading into battle without a helmet.

    Your financial books aren’t just for your accountants. They’re your reality check. Block out those critical three to five hours as the year draws to a close. Scrutinize every nook and cranny of your expenses. Which subscriptions are merely sapping resources without yielding returns? If multinational giants are meticulously trimming their operational fat, there’s a cue for you.

    How to put your helmet on: This isn’t about shrinking your team size; it’s about eliminating redundancy. Optimization is the key. Analyze your subscriptions, third-party services, and extra expenses. I can guarantee there is an area right now that you can tighten up.

    2. Your sword: The sacred 10% profit mantra

    Next, you want to build your sword — something you have with you that you can use when in battle to fight back with.

    Make the 10% profit mantra a non-negotiable. Every dollar that comes in, immediately set aside 10% as profit. Establishing a separate “Profit” account is a game-changer. This discipline reshapes your financial perspective. It makes you solve your financial needs using your 90% by getting creative and cutting the fat (step 1). But it also means you have a financial nest to use whenever you need it most. And this is your greatest weapon.

    How to build your sword: Make a new business account called “Profit.” Have your accountant (or yourself if you handle your company’s finances) set aside 10% of the business income into this account on a designated basis (weekly/fortnightly). Watch it grow.

    3. Your breastplate: Bolstering your reserves

    Where could you be hit the hardest, you would want a lot of buffer to take the punch. This is where your financial breastplate comes in.

    Revision your reserves. We’ve entered an era where the unexpected is the new norm. Those three-month reserves? They’re baseline. Challenge yourself. Can you push it to six months? Or why stop there? Aim for a year. By stashing away this nest egg and perhaps even parking it in high-yield savings accounts (some dole out a sweet 4-5%!), you’re not just cushioning your business but preparing it to soar post-crisis.

    How to build your breastplate: Use your financial review (step 1) to see where you can add more from where you have removed unnecessary costs. Get critical. Ask your financial advisors for help here, they can probably see where you can cut in order to start gaining.

    Related: Creating the 3-Bucket Cash Reserve System

    4. Your shield: Minds over money

    Your shield is your buffer, which will be able to take any hit. How do you create a solid business buffer? You strengthen your people and company.

    You’ve tightened the purse strings. Excellent. But now, let’s allocate those savings wisely. Begin internally. Your team, their skills, their growth — these are intangible assets. Consider launching a leadership book club. How about monthly self-development workshops? The essence is to foster a culture of continuous learning. When you invest in their growth, the dividends they pay back in productivity and innovation are exponential.

    How to build your shield: Send out a survey to your company on what they would like to see done for personal and professional development. Start there.

    5. Your chainmail: The contrarian marketing strategy

    Your armor is almost complete. Ready to get out and fight? Your chainmail will strengthen you.

    In stormy economic weather, many companies instinctively pull down the shutters, drastically slashing their marketing budgets. I advocate the opposite. Instead of retracting, expand. While competitors dial back from 100% to 20%, I say we amplify our efforts, pushing it to 130%. Do what others are not doing — this is where you will see truly unique results.

    How to build your chainmail: While buying patterns may change during downturns, buying itself doesn’t cease. Ensure your brand remains front and center, ready to cater to this discerning audience.

    Related: How to Lead Effectively in Uncertain Times

    6. Your plate armor: Embrace agility and innovation

    Your final piece to your suit of armor is your plates. And what do plates do? Protect your whole body. Let’s see how to protect the body of your business.

    Innovation is key. Economic downturns often signal a broader shift. The market dynamics are evolving. Traditional models might be upended. It’s the CEOs who keep their fingers on the pulse and who are willing to pivot, adapt and innovate that emerge not just unscathed but thriving.

    How to build your plate armor: It’s leveraging new technologies, exploring untapped markets or simply reimagining a product. Remember: Agility isn’t just an advantage; it’s a necessity. Keep new. Keep fresh. And keep innovating your business. Don’t get complacent just because it has worked alright so far. Get stronger, and get better.

    Facing a recession is as much a test of your mettle as a leader as it is of your business’s robustness. It’s a clarion call to think deeper, act smarter and lead with a vision. With the battle armor we have built for your business together, you can think, act and lead AHEAD of time. You have now taken back your control in the face of uncertainty. You’re bulletproof. Economic downturn? Ha! More like “Bring it on, world!” You’ve got this.

    Mikey Lucas

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  • 5 Recession-Proof Businesses to Start in a Turbulent Economy | Entrepreneur

    5 Recession-Proof Businesses to Start in a Turbulent Economy | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    Economic downturns are no joke. Recession throws a massive cog in the proverbial wheels of several established entrepreneurs as well as new startup owners. A recent study by Startup Genome found that a staggering 74% of startups saw their revenues plummet since the pandemic. Even more grim is how many of these (16%) were forced to lay off 80% of their workforce.

    No wonder, then, that companies are afraid to raise capital, or even start a business at all. Experts are warning about an impending global recession, so companies are apprehensive about scaling, hiring new talent and retaining the ones they have.

    However, not all startups struggle in times of recession and economic downturns. Some startups may, in fact, thrive during economic crises. As someone who has been in the VC industry for over a decade, sold several companies and launched an accelerator that helped over 200 entrepreneurs, I have learned that there is a crucial difference between startups that survive and succeed in a recession and those that struggle and fail. That difference is in the business model itself.

    As the CEO of Builderall, an all-in-one solution supporting over 20,000 small businesses worldwide, I have a bird’s eye view of the best-performing business models. Where other startups flounder, startups in our ecosystem continue to pull in more customers. In fact, we do not experience an economic downturn at all.

    If you are wondering whether to start your business, scale your startup or cut back operations, read on for the five recession-proof businesses I recommend during turbulent times:

    Related: 10 Businesses to Start That Can Weather Any Economy

    1. Service-based businesses

    Any time you provide a skilled service to your customers, whether online or offline, it’s a service-based business. For instance, a bookkeeping/accounting service or a digital marketing agency both provide services that require special knowledge and expertise. These companies are really crushing it today — and for more than one reason:

    • Their startup costs are low. Entrepreneurs can get started with a lower initial investment and fewer subsequent capital infusions.

    • They can operate with a minimal workforce. Companies can go fully remote with the advantage of tapping into low-cost talent markets, or they can go hybrid.

    • Faster turnover and revenue generation. Receiving payments from new clients and generating cash flow happen much more quickly.

    • Recurring payments keep the money flowing in. Service-based companies can benefit from employing subscription or retainer models. This guarantees two things: repeat customers and a continuous revenue stream in exchange for ongoing services.

    Customers are effectively fronting the cost, which reduces the necessity for venture capital or working capital. Then, three years later, they have built up a solid customer base of recurring revenue customers who simply keep paying on a monthly basis, and the money from those payments becomes your operating expenses.

    2. Influencer marketing

    You really can’t go wrong with being an influencer. It won’t be a stretch to say that influencers are ruling the digital world right now. Look at what Khaby Lame, Zach King, Addison Rae and Charli D’Amelio have achieved. During my years in business, I have closely followed the rise of several popular influencers, and I have found two common threads among all of them:

    One, all successful influencers work in a particular space or in a specific niche in which they are experts and know what they are talking about. And two, they are pure content creators, and their content resonates with their audiences, helping them attract more followers.

    Once you amass a substantial following on social media platforms such as Instagram, YouTube or TikTok — that’s when the magic begins. You leverage your online presence to engage with your audience and promote products or services, effectively becoming brand advocates for the companies you work with.

    3. Brand ambassadorship

    Being a brand ambassador is a close off-shoot of the influencer business. A brand ambassador has always been a cornerstone of successful marketing for several companies. Back in the day, when social media wasn’t a thing, only A-list celebrities or professional athletes and musicians would get top dollar for their endorsements.

    Like influencers, brand ambassadors also excel in specific niches. They position themselves as thought leaders or experts, and the association with them brings credibility to the brands they are endorsing. While influencer relationships are typically one-off arrangements, brand ambassadors generally work with the same brand for years and provide a deeper level of exposure and education for their audiences.

    Related: Scared of a Recession? Follow These 5 Tips For a Recession-Proof Business

    4. Online educators

    With upskilling and side hustling turning into major buzzwords, I have seen so many people asking, “What else I could do?” on social media platforms like Reddit and Twitter. Those who get laid off want to increase their skill set and willingly pay hundreds or even thousands for continuing specialized education rather than returning to college or seeking an advanced university degree. This is the major reason why online educators are making a killing by selling their courses online.

    People are learning all sorts of skills on e-learning platforms today. For example:

    How to turn sketches into finished digital artwork

    How to compose music

    How to create effective marketing funnels

    How to write screenplays

    Online educators are just normal people who are good at what they do. Becoming an online educator requires just taking the knowledge that they have, putting it into a course and selling it. They craft an exhaustive course structure and deliver courses that cover an extensive range of subjects, from practical skills to creative arts and everything in between. Platforms with user-friendly e-learning tools are making this easier than ever.

    Marketing, business, entrepreneurship, creative arts, coding and personal development are always popular with learners.

    5. Unique products

    Selling a unique product can be a tough nut to crack. But when a company achieves this feat, it can consider itself practically recession-proof. There are startups in the market that are selling a one-of-a-kind product to a narrow, but interesting, subset of consumers. It could be T-shirts, stickers, plush toys or anything else.

    And with the online platforms available today, it is so simple to launch an online shop, spread awareness and begin building a customer base. Paid ads are something that big companies use as they scale. But when you’re a small company, you can get creative and use Instagram reels and TikToks to drive audiences to your product. Try to create a niche product as opposed to trying to sell basic T-shirts to everybody, which is very difficult. Do something that’s very targeted to a specific niche. For instance, you can come out with a whole line of T-shirts for people who love unicorns.

    Related: 3 Key Strategies That Helped My Business Grow During a Recession

    At Builderall, we have not seen businesses negatively affected by the recession; if anything, it has been a positive catalyst for entrepreneurs. According to this recent survey by Gusto, 56% of individuals launched a business due to concern over inflation. The World Economic Forum reports that women entrepreneurs increased to 47% in 2022 up from 27% in 2019.

    So, while it may seem scary to try to launch or scale a company in today’s economy, with the right business model, now is the perfect time — and the future is bright.

    Pedro Sostre

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  • 3 Entrepreneurial Trends to Watch in 2023 | Entrepreneur

    3 Entrepreneurial Trends to Watch in 2023 | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    There is a lot of uncertainty about where the economy is heading right now. But as someone who has served and observed small businesses through many economic cycles, I believe determined entrepreneurs can make it in any climate.

    Yes, entrepreneurs must acknowledge and be aware of what’s happening externally. But, I’ve also always believed entrepreneurs can create the outcomes they want despite challenging macroeconomic circumstances. To do so, they need to take advantage of the opportunities in the existing environment and work through the challenging aspects as they drive toward success.

    To understand how folks are doing that today, I recently discussed these issues with a panel of small business owners I know and respect. Here are three trends that emerged from that conversation.

    1. A slow economy requires repositioning and refocusing

    What the economy has been doing recently is what all of us who were economics majors call an “economic correction.” Sounds a lot nicer than it feels, doesn’t it? But in reality, these corrections are necessary to create a healthier economy. Of course, business owners struggling from economic setbacks aren’t going to see them that way. At least not right away.

    But this is why the first important entrepreneurial trend worth highlighting is a mindset shift. Instead of viewing the economy as a foe, successful entrepreneurs accept that the economic adjustment is happening and then figure out how to work with it.

    For instance, when the economy — and lead acquisition — slows down, business owners are forced to become more efficient and get clarity about who they serve. By doing so, you can make sure you’re spending time with the right customers in the first place. Then, you can meet them where they are, help them get through their own challenges during this time and keep your company moving forward.

    Related: How to Prepare Your Business For Economic Downturn

    2. Talent challenges and opportunities

    Some of the business owners I spoke with mentioned that there have been both advantages and disadvantages in hiring talent recently. Ever since Covid, many people have branched out, come up with their own ideas and wanted to work for themselves.

    This can make it more difficult for the entrepreneur to get the right full-time people in place for their team, but it also means that access to remote and fractional talent is greater today than ever before. So even if entrepreneurs can’t find local, qualified personnel for a role, there are fewer geographic limitations today. All of the pandemic-induced and economy-fueled changes people have made have allowed business owners to bring on team members worldwide to fulfill their needs.

    Since people are embracing more freedom in their work, small businesses can attract top talent by offering flexible work arrangements, like remote work options or flexible schedules. This can be attractive to employees seeking better work-life balance.

    Additionally, small businesses can provide opportunities for employees to develop a wide range of skills and gain valuable experience across different business areas. This can appeal to individuals seeking professional growth and a diverse career path.

    Related: Work-Life Balance is Possible — And It’s Not as Hard to Achieve as You Think

    3. Embrace AI now or pay the price later

    Of course, my small business owner colleagues and I couldn’t talk about the economy and entrepreneurial trends without discussing artificial intelligence (AI). The economic landscape has driven an acute need for efficiency, which means getting comfortable using automation and technology. It saves time, reduces team members’ workloads and helps them do more with less.

    One of the owners I spoke with said his company has already fully embraced AI for its reliability, resiliency and ability to scale. They’re using AI for various tasks that can be automated, like creating presentations in numerous languages and disseminating them worldwide, which frees their employees to focus on the more complex projects that require critical thinking and creativity. This keeps their costs down and their output high.

    Related: Why Elon Musk and Other Tech Experts Are Worried About Artificial Intelligence

    Whether entrepreneurs are ready to get as sophisticated with the technology as this company is or not, AI is here, accessible and useful in myriad ways. The companies that will make the most of the current time, despite the economic fluctuations, are those that use technology like automation and AI to get ahead.

    There has been a lot of fear among entrepreneurs about the economy, and it’s time for that narrative to change. Research firms, like McKinsey, have found that “the moves companies make now (during a recession) could account for half of the difference in total shareholder returns (TSR) between leading and lagging companies over the next business cycle.”

    In other words, what you do now matters. By refocusing your efforts to align with the state of the economy, tapping into new talent possibilities and getting comfortable with AI, business owners can not only ride this wave but even attain real growth throughout it.

    Clate Mask

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  • I Asked ChatGPT How to Recession-Proof My Business | Entrepreneur

    I Asked ChatGPT How to Recession-Proof My Business | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    Entrepreneurs everywhere always have to look out for the dreaded “r-word.” They come around every so often and wreak havoc on businesses by reducing sales, dropping revenues and cutting employment. Of course, we’re talking about recessions — a natural, but certainly painful, part of the economic cycle.

    While there’s no way to completely insulate a company from the effects of recessions, there are steps you can take to help mitigate them.

    As a marketing and technology entrepreneur, I was curious to learn more about how to “recession-proof” my businesses. That’s why I asked ChatGPT, the world’s leading large language model (LLM) and the artificially intelligent darling of Silicon Valley.

    Below, I’ll share my conversation with ChatGPT about how entrepreneurs can protect their businesses from recessions and, ultimately, share my own thoughts on these ideas.

    Related: 9 Smart Ways to Recession-Proof Your Business (Fast)

    The prompt

    I opened our conversation by asking the following question in the form of a written prompt:

    How can I make my business recession-proof?

    Then, ChatGPT responded with the following steps after providing a brief disclaimer that no business can completely protect itself from inflation.

    ChatGPT’s “recession-proof” entrepreneurship formula

    Below are, verbatim, the seven recommendations offered by ChatGPT to help businesses weather the storm during recessions:

    1. Build a strong cash reserve.

    2. Diversify your offerings.

    3. Focus on efficiency.

    4. Maintain good customer relationships.

    5. Keep an eye on your finances.

    6. Prepare for the worst.

    7. Stay flexible.

    My thoughts on ChatGPT’s formula

    Personally, I think ChatGPT’s advice is excellent, and I generally agree with each point. However, I have slight qualifications for some. Below, I’ll share my thoughts on each:

    1. Build a strong cash reserve:

    To make it through down periods, you need to have cash saved for a rainy day. This is as true for businesses as it is for your personal finances. However, I’d go a step further and recommend holding non-cash savings as well to protect against inflationary effects. An asset such as gold and other precious metals, or even real estate, can serve as highly resilient stores of wealth during recessions — although they’re far less liquid than cash on hand.

    2. Diversify your offerings:

    This is a big one. Ensure you don’t count on a single product or service to carry your business. Diversify your revenue streams by offering several products or services so that if one gets hit badly by the recession, another can keep your business afloat.

    For example, a car dealership could diversify its offerings by adding commercial vehicles and trucks to its preexisting lineup of passenger vehicles.

    3. Focus on efficiency

    This one deserves a caveat. Prepare for a lean, hyper-efficient operation if economic circumstances require it, but don’t single-mindedly focus on efficiency by automating, downsizing and streamlining each and every task. Sometimes customer satisfaction and product refinement require a larger crew and more time dedicated to non-core functions, so allow space for that as well.

    4. Maintain good customer relationships

    This one is a given. Longstanding, loyal customers are far more likely to stick around during recessionary periods if you offer friendly, high-quality service. I suggest adding deal-sweeteners and discounts to repeat customers to keep them coming back.

    5. Keep an eye on your finances

    Create a budget, and stick to it. ChatGPT emphasizes the importance of monitoring your cash flow, and it’s right. If cash inflows aren’t leaving enough left over to cover all expenses while saving for a rainy day, you need to reevaluate your expenses and re-budget accordingly.

    6. Prepare for the worst

    Actively plan for an upcoming recession. In modern history, recessions have occurred every 3.25 years on average. Good entrepreneurs should use this as a baseline for when they should anticipate periodic business slowdowns, and contingency plans should account for these. This way, you can respond quickly if economic events lead to decreased sales.

    7. Stay flexible

    Always be willing to adapt. Market conditions can change suddenly, and savvy business owners need to be prepared for that by being flexible and able to pivot when necessary.

    Related: 5 Ways to Protect Your Business From a Recession

    Overall, ChatGPT presents a great set of principles to abide by if you want your business to be more resilient to recessions. But it’s worth reiterating that no business strategy is “recession-proof” as deep, economy-wide events can and will have unmitigable effects on businesses of all kinds.

    Yet, keeping a flexible and responsible approach to business management — as ChatGPT suggests above — would certainly make your company more likely to survive an economic downturn than one that doesn’t.

    Amine Rahal

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  • 3 Marketing Moves to Make Your Business Recession-Proof | Entrepreneur

    3 Marketing Moves to Make Your Business Recession-Proof | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    If you’re a business owner, a lot has happened already this year to make you stop and consider the state of your (and your business’s) money.

    Inflation has every dollar shrinking in value, federal rate hikes have made it more costly to borrow, and while recent bank failures may not have impacted your business outright, it certainly caused a justifiable stir.

    With all of this going on, my husband and I decided to meet with a mentor and financial consultant who has managed hundreds of millions of dollars in capital over the last 25 years to review our investments.

    He pointed out that, while we both have various investments, we’ve primarily been putting our money into something that has paid off many times over standard stock market returns — and that something is our respective businesses.

    After that meeting, I concluded it was wisest to invest more into my most reliable asset — my business. Sure, we have a lot of “safe” investments as well, but truly, in the long run, nothing has compared to our businesses in terms of return on investment (ROI).

    The biggest investment I’m making is in my marketing: I’m increasing our annual marketing budget by more than 20% this year to over $7 million.

    I made this decision based on some hard-won experience I gained surviving two economic recessions. The first (2008), I cut my marketing and we barely survived. The second (2020), I refused to cut our marketing and, as a result, growth in the last three years has averaged 20% after averaging only 5% in the decade previous. I learned that marketing is crucial to not only growing a business when times are good, but essential to survival when times get tough.

    If you’re like me and know that your business is your greatest asset, I want to share three marketing principles I have followed and applied in order to strengthen my business and grow revenue despite recessions and economic turbulence.

    Related: Why a Recession Is the Worst Time to Skimp on Brand Marketing

    1. Use the current economic conditions to your advantage to increase market share

    Recessions come and go, and some businesses leave legacies behind that we can learn from. Kellogg is a perfect example of that. In the late 1920s, Kellogg and Post dominated the breakfast cereal market.

    When the Great Depression hit, Post responded in fear, reducing expenses and cutting back on advertising while Kellogg did the opposite. Kellogg moved into radio advertising and heavily promoted a new cereal called Rice Krispies.

    By 1933, the economy was the worst it had ever been, but Kellogg’s profits increased 33%. Kellogg not only survived the economic crisis but became the leading cereal brand afterward — and has remained in that spot more than 80 years later. In 2017, Kellogg had a 30% market share, with General Mills following at 29% and Post at 18%.

    I experienced a similar phenomenon with my business, PostcardMania. In 2008, the recession devastated many businesses. We were heavily affected by the real estate market plummeting since mortgage brokers made up 46% of our clientele. In 2009, an advisor at the time saw how much I spent on marketing every week and said something to the effect of, “We could save a lot of money if we cut back.”

    Against my better judgment, I listened and cut my marketing in hope that we could conserve our resources and increase profits, but that made the situation worse. What was a small revenue decline in 2008 (around $150,000) ballooned into a much bigger loss in 2009 — as much as 15% of revenue and well over $1 million.

    I made a sharp U-turn and brought my marketing back up to speed as soon as possible, and we recovered by 2010. I vowed to never cut my marketing budget again.

    Then in 2020, when the pandemic disabled the economy, I knew exactly which moves to make and maintained my marketing regardless of how rough it got — and it did get rough to the tune of sales being down over 40%.

    But guess what my competitors did? Exactly as I did in 2008 — they froze or reduced their marketing. The difference between 2008 and 2020 was obvious; we grew PostcardMania in 2020, and then business got even better in 2021 and 2022. Since 2019, our revenue has been up 60% (an average of 20% growth per year) after 10 years of averaging 5% growth.

    I know it sounds counterintuitive to invest more in marketing when the economy is poor, but history doesn’t lie, and my own experience backs this up. Keep your marketing strong, and your leads and sales will remain strong as well.

    Related: 6 Recession-Proof Business Marketing Strategies

    2. Choose the marketing channels with the highest ROI to make the most of your budget

    So, which marketing channels should you invest in? The answer is simple — the ones that work.

    If you aren’t already tracking your marketing closely, commit to starting right now. It’s critical that you track what you’re spending and where leads and new customers are coming from so that you know what’s working and what needs improvement.

    Once you know which channels yield the highest ROI, you can invest more there to grow your leads, which in turn yields more sales and revenue (and you can tinker with the lower-performing tactics until they’re in a good range or pare them back to suit your budget needs).

    One of the marketing tactics I find to have a super high return on investment is retargeted mailings. Triggered mail makes the most of every lead by specifically targeting the people who have already shown some kind of interest in your products or services by visiting your website.

    Depending on who you want to target, a postcard is automatically printed, addressed and sent within 24 hours of their website visit. Targeting can be based on the length of time a visitor spends on your site, the web pages they visit, the items they put in their shopping cart or a number of other factors.

    Because you’re only targeting warm prospects and sending a few postcards a day (rather than thousands at a time like traditional direct mail), the upfront cost of a triggered campaign is relatively low — and that means your ROI potential is much higher.

    One of our real estate investment clients, Mark Buys Houses, added retargeted direct mail to their follow-up. They spent $647 to mail just over 100 postcards to his website visitors. As a result, he converted one lead into a sale and made $70,000 in revenue. That’s an ROI of 10,710%!

    If you decide to increase your marketing investment like I did, I suggest starting with tactics focused on improving website conversion or follow-up. You’ve already spent money on the hardest part — taking someone from unaware of your business to actually interested — so take the time to find out if investing a few more dollars per lead will translate into more sales. Just don’t forget to track closely!

    Related: How to Adjust Your Marketing to Survive a Recession

    3. Take advantage of free communication tools to stay in touch with prospects and customers

    Not every marketing tactic costs money; some are 100% free. Leveraging free marketing platforms during tough times not only helps your budget, it also helps you communicate better.

    First, I suggest perfecting and increasing your email marketing. Tools like Constant Contact and Mailchimp let you send emails for free up to a certain amount. Send out promotional emails that include catchy subject lines and enticing deals to increase clicks. Consider creating an email newsletter that your audience would enjoy reading. It could include valuable information about your industry, tips and tricks, recently completed projects or features about your company to keep your customers connected to your brand.

    Second, I recommend freshening up your website with new, SEO-rich content. You can write the content yourself or find a willing team member to help — or even give the latest craze, artificial intelligence (AI), a go. Just provide a prompt, and let AI do the heavy lifting (a.k.a. writing) for you, then go over it afterward and put your own stamp on it using expertise that only you could provide. Blog posts, web pages and other types of articles will not only boost your website in the search engine results on Google, but it will also increase engagement on your website.

    Lastly, get more active on social media. Post creative, informative content that draws people in and fosters engagement, like polls or questions. Facebook and Instagram also allow you to list your products and services for free on a shop page. Even though it takes a bit more time and energy to make posts every day, communicating consistently with customers and prospects is invaluable and could lead to increased revenue and positive brand image in your area of expertise.

    At the end of this economic downturn, at least you can say that you gave it your all and worked hard to build up your business to the best it can be. Invest in the right areas, and you’ll enjoy benefits that last far beyond the most recent crisis.

    Joy Gendusa

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  • 8 Ways to Keep Your Business Afloat in a Tough Economy | Entrepreneur

    8 Ways to Keep Your Business Afloat in a Tough Economy | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    As the economy continues to fluctuate, it’s important for entrepreneurs to have a plan in place for any potential downturns. To remain competitive, you can take several steps, including reviewing your finances, cutting operating costs, diversifying your products and offerings and focusing on customer retention.

    Utilizing automation technology and revamping your marketing approach are both essential to adapt to the ever-changing economic climate. Don’t wait until it’s too late to start preparing — take control of your financial future and create an action plan today. Having this action plan will allow you to build what I refer to as a “war chest” for your business. The “war chest” is critical since it will allow your company to survive for a minimum of six months during a rough time.

    Related: 5 Ways to Protect Your Business From a Recession

    1. Create an action plan

    Planning for an economic slowdown is crucial for preparing your business, so it’s time to break out that budgeting spreadsheet. Be aware of potential changes to revenue, expenses and cash flow so you are not caught off guard. By preparing a budget in advance, you can make adjustments to ensure your business stays afloat. Start planning for a rainy day now — don’t wait until it’s too late.

    2. Review your finances

    Getting a handle on your finances is the first step in preparing for an unpredictable economic climate. Do a deep dive into your assets, liabilities and outstanding debts or loans. You can then determine where you stand financially and how a downturn may affect you.

    Keeping a close eye on your sales and costs and uncovering opportunities to reduce expenses is crucial to staying ahead of any potential economic shifts. Make informed decisions about your finances during difficult economic times by tracking your monthly income and expenses, such as salaries, rent and insurance. One of the best things you can do is a comprehensive review of your P&L monthly to ensure you are not being wasteful in your business.

    3. Cut operating costs

    Cutting operating costs is an obvious but effective way to prepare for a softening economy. Take a hard look at your budget and trim unnecessary expenses. It’s important to consider all costs, including travel and office supplies. You may get better terms or lower prices by renegotiating existing vendor contracts.

    Walmart, for example, switched to LED lighting in their stores. Walmart reduced its lighting energy consumption by 50% by replacing traditional light bulbs with LED bulbs. This resulted in an annual cost savings of approximately $200 million. Furthermore, LED bulbs have a longer lifespan than conventional bulbs, so Walmart also saved money on maintenance. Many people overlook this when reviewing operational expenses.

    Related: How to Help a Business Thrive During an Economic Recession

    4. Revamp your marketing approach

    Don’t let tough economic times take a toll on your brand’s success. Instead, reassess your marketing strategies to stay ahead of the competition. Are you working within a tight budget? No problem! Optimize your spending by shifting your focus to marketing tactics to enhance customer loyalty and drive sales. Use technology to your advantage with social media platforms and digital marketing solutions to increase your brand’s visibility without breaking the bank. Keep your finger on the pulse of the latest trends in marketing to tap into what’s currently catching consumers’ attention.

    Want to make a lasting impact? Ditch the typical advertising route in favor of snappy, visually-engaging short videos on YouTube and Instagram. The sky’s the limit when it comes to creatively adapting to the economic climate and taking your marketing game to the next level. They key is getting creative in your marketing messages to stand apart from everyone else. I always tell business owners I work with that use the excuse, “It’s just too noisy.” Then, make more noise.

    5. Revolutionize your business with automation and AI technology

    The future of business is here, and it’s all about automation technology. Say goodbye to human error and welcome efficiency and cost-effectiveness with open arms. Companies are relying on AI more than ever before to help them reduce costs and optimize processes. With robotic process automation, predictive analytics and natural language processing tools like ChatGPT, businesses are experiencing revolutionary benefits.

    ChatGPT is transforming customer service and support by utilizing cutting-edge language models. Automation can be the superhero businesses have in their corner. Be very mindful of how you use some of these technologies as they are new, so test the technology and split-test them before doing any full integrations into your ecosystem. Just because it’s new and shiny doesn’t mean it is everlasting!

    6. Diversify your products and offerings

    In an economic downturn, diversifying your product or service offerings is a powerful strategy for breaking into new markets. Expanding your range can entice budget-conscious buyers who might have overlooked your business previously. Using the right approach, you can both maintain and attract customers.

    Related: How to Recession-Proof Your Business

    7. Focus on customer retention

    Hold onto your customers tightly. Your relationship with your existing customers is crucial, especially during turbulent times. Keep them coming back with exciting loyalty programs or tempting discounts. You can fix any problems quickly and identify areas for improvement if you listen carefully to their feedback. Remember, keeping a happy customer is easier than finding a new one in tough times.

    8. Have a backup plan

    To weather tough times, businesses must master the art of preparation. The unexpected can strike at any time, so it’s vital to prepare backup plans to ensure your business runs smoothly. Keep emergency funds and insurance policies in tow in case of a crisis. Review finances, pivot marketing strategies and explore new product lines to keep your company on solid ground during an economic slump. Take control of potential roadblocks and steer your business toward success.

    Being prepared for a softening economy can mean the difference between taking control of your financial future and becoming another victim. A solid action plan, regular reviews or focus on improvement will give you the edge over those who wait too long to take preventative measures. Prevention goes a long way, so get out there and stay ahead of the game!

    Jason Miller

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  • How Creators Can Thrive as Advertisers Are Cutting Back | Entrepreneur

    How Creators Can Thrive as Advertisers Are Cutting Back | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    If you’re a creator, you’ve probably heard about the importance of diversifying your revenue streams. Chances are, you may have already done this successfully and if not, you might be curious about where to start.

    Like any industry, the creator economy isn’t immune to the pressures of inflation. As declining brand sponsorship offers and ad revenue payouts squeeze revenues, creators increasingly seek additional ways to extract value from their businesses. But for many, the question then becomes how and when?

    Not only do I believe diversification is one of the major trends that will define the creator economy in 2023, but a recent survey we conducted also revealed that 70% of respondents were considering additional income streams because of this economy. And with good reason: Diversifying can help complement and cross-sell existing offerings, leading to greater engagement, retention and customer lifetime value.

    But while it can be tempting to dive right in, creators need to approach diversification strategically to ensure it yields increased revenue and career stability by complementing and strengthening existing content rather than becoming a distraction.

    I don’t just work with creators; I am one, which has given me a front-row view of diversification’s overlooked pitfalls and powerful potential. There are no easy answers to getting this right, but here are some rules of thumb for any creator hoping to diversify their offerings to remain competitive, meet evolving audience needs and survive in this economy.

    Related: Why Creators Can Weather a Recession Better Than Big Business

    Don’t diversify without a purpose

    Let’s get this out of the way. Yes, diversification can be a powerful strategy for business growth, but you don’t have to diversify just because everyone is talking about it. And you certainly don’t need to be on every platform, trying to tap into every possible revenue stream. Generally speaking, there are two main scenarios in which diversification might be a good option for your business: When things are working and when they’re not.

    Diversification can be an effective strategy for creators who are already successful and want to take their business to the next level. If you have a large audience, generate significant revenue, and have the bandwidth to take on more work, it’s a good time to consider expanding and reaching a wider customer base.

    By diversifying, you can tap into new revenue drivers and lead sources and engage with your audience innovatively. Twenty-five percent of full-time creators earn between $50,000 to $150,000 per year, according to a recent survey from ConvertKit. Most do this by combining several revenue sources, from online courses to paid newsletters, appearances, coaching, merchandise or other streams. Our research shows that full-time creators rely on an average of 2.7 income streams, and the number of creators relying on multiple streams has risen nearly 50% over the past five years.

    On the other hand, if your current strategy is losing steam and you’re finding it difficult to generate audience engagement and revenue, it may be time to look for content and revenue streams that click. Used this way, diversification is more of a slow pivot than a true expansion, but exploring new kinds of content, products and services may help you energize your community or find new audiences that are more receptive to your content, bringing long-term stability to your business. Simply put, if your content is not resonating with your audience or you find it difficult to generate revenue, it may be time to consider a new approach.

    Related: A Recession Creates Opportunity for Creatives

    When to wait

    Despite the great potential diversification offers, sometimes it’s better to wait and focus all your energies on what you’ve got. If you’re new to the creator economy, still seeing growth and achieving your milestones, it may be best to focus on your existing content and channels rather than adding extra distractions. Diversifying can easily become overwhelming, especially if you’re still on a learning curve.

    Even experienced creators should recognize that diversification will require additional focus and effort. I’ve seen plenty of cases where creators with Shiny Object Syndrome neglect successful and profitable business channels and lose at both. If your current approach works well, staying focused on growing existing channels and hiring a team to increase your capacity in those successful ventures may be better than splitting your attention.

    I’d always suggest you do a quick ROI check on if your efforts on this new opportunity are likely to create greater returns than just leaning into your existing business and doubling down on what’s working.

    It’s not a one-size-fits-all approach

    If diversification is your move, the next logical question for many creators will be: How? And the truth is, there is no golden ticket. The right moves for diversification depend heavily on your unique audience and business.

    One way to diversify is by expanding your topics using your existing channels. For example, if you have an online school for yoga instruction, your student community might also be interested in meditation and healthy eating. By expanding into related niches, you can diversify the topics within that niche to keep your audience engaged and attract new followers. This approach allows you to grow your brand while maintaining focus on the platforms that serve you best.

    Another approach is diversifying your revenue sources to complement and cross-sell successful content. A physical product can drive revenue, while a course and community can be an engagement engine that keeps people returning. The synergies create a virtuous cycle – hot topics of conversation in a community can be the basis for a new minicourse or ebook; courses can be gateways to paywalled communities where everyone has a common baseline of interests and skills.

    Creators can build robust and sustainable businesses by combining channels in unique ways. Take John Lee Dumas, host of the podcast Entrepreneur on Fire, who has combined his daily podcast, short courses, and even regular reports about his own entrepreneurial journey as part of his diversified offerings.

    Related: For Savvy Entrepreneurs, an Economic Downturn Creates Opportunity

    A well-executed diversification strategy can turn your community into an engagement engine that builds customer loyalty while yielding rich customer insights. The key is always to be strategic. When considering diversification, map out a workflow for your content production, syndicating it across channels and reassess the impact on your bandwidth before making additional changes.

    Diversification can be a gamechanger for creators looking to build thriving, sustainable businesses, but there’s no single way to go about it or one right answer that will meet every creator’s needs.

    Random expansion, or feeling the need to be everywhere all the time, is not a successful strategy — it’s a recipe for burnout. But by strategically identifying and tackling new content and revenue streams, creators can stay on top of the game.

    Greg Smith

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  • How to Jump the Curve and Get Ahead of the Game During a Recession | Entrepreneur

    How to Jump the Curve and Get Ahead of the Game During a Recession | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    Why should you think differently about a recession? When everybody is being cautious and using the down market cycle to consolidate their business, why should you be the person being bold and investing in new products and services? The answer is surprisingly simple. Consider that some of the most significant companies were born amid a depression or a recession.

    Ford was founded during the 1902-1904 recession, while GM started in the aftermath of the panic of 1907, the first global financial crisis of the 20th century. American Airlines was formed during the Great Depression. The 1973-75 recession saw the birth of HBO and Microsoft. Mailchimp sprung into life during this time and is still thriving today. The second Great Recession (2007-2009) saw Airbnb flourish in the market.

    What does “jump the curve” mean?

    Think of a sine wave — starting at the top of the curve, moving down to the lowest point, and then rising back to the highest point. Imagine if you could jump from peak to peak and skip the low point. To do this means having a completely different mindset.

    In general, when the market is bold and optimistic, this is usually the time to be cautious and use it as an opportunity to consolidate your business. When the market is fearful and cautious, this is the time for you to be bold with your new initiatives. This concept is jumping the curve. It is this concept of trying to move your business to the next level and to expand the operations at a time everybody else is downsizing and shrinking to a smaller operation.

    Preserving cash is critical at a time like this; no question of the wisdom of that strategy. But a smart team can find ways to preserve cash and expand the business simultaneously. This means being exceptionally innovative.

    Related: How to Unlock Your Team’s True Potential by Creating a Team of Leaders

    Abundance vs. Scarcity Mindset

    Often in a down market, a company can find its very best opportunities. When other companies are shrinking operations, laying off key people, and even canceling certain products and services, this creates opportunities to gain new customers that are no longer served. New customers become available during down markets.

    There may even be opportunities to acquire other businesses where evaluations of companies are at a lower level, often providing good value. During market upswings, most company valuations are inflated.

    Down markets also offer opportunities to find great talent and expand the business by employing new people.

    Related: This Is How Thinking About Abundance Has Helped Me Build a Success Mindset

    Developing a powerful culture to help jump the curve

    We mentioned earlier the exceptional innovation that a team has to display when trying to jump the curve during a down cycle. This means being innovative with capital and developing new products and services that require very little cash.

    Here, the Pareto principle can be beneficial. Perhaps you can get 90% of the benefit with 10% of the cost? What if there is a way for your team to expand your services and offerings while at the same time preserving most of your capital? This is a different mindset.

    When we flip the switch and become bold and innovative to expand our operations, we can access new customers, markets and increase market share. When the world is shrinking operations and scaling down, you can take the opportunity to jump your business to a whole new level.

    This requires a unique culture. That is why Peter Drucker said, “Culture will eat strategy for breakfast.” For this to work, key elements need to be built into your culture. When the business is on an upcycle, you consolidate your culture and empower every team member to act as a leader.

    This is how you create a team of leaders, not just a team with a leader. Allowing team members to experiment and innovate and even take calculated risks during good times teaches them how to think like owners and to act and function at a different level.

    The challenge is to move people from a “worker” mindset into a “leader” mindset. A worker is someone who manages their outputs. They do what they are told and try to do a good job by following procedures and meeting the required standards. The leadership approach is to teach people to manage their inputs and outputs.

    Related: The Mindset That Sets Apart Great Leaders

    This means people never use excuses like “nobody sent me the email” or “I’ve called twice, and they didn’t answer me.” You are teaching your team to function as a group of leaders in which they lead their own contribution to the organization by managing their inputs (what they need to do their job) and their outputs. You teach people to act like owners in their areas of responsibility.

    When you create a culture in which people are celebrated as heroes when they do something unique, you are investing in a powerful culture that will empower those same heroes to come up with extraordinary innovation and ideas during a down cycle.

    You take on a new mindset in which it is not your job to be the hero for the team but rather to create heroes in your team. This means taking a risk with people. It means giving people an opportunity to innovate and take risks. It also means that you give people a profile who normally would be overlooked or remain unseen in your organization.

    When everyone on the team knows they have an opportunity to have their moment in the spotlight and be celebrated, a new era of innovation and experimentation beings. It is really about you, as the leader, permitting to act like owners and bring innovation to every level of the organization.

    When we create a culture in which ideas have no rank, then every idea stands on its own merit regardless of who proposed it. Once a team learns how to innovate and believes that a certain amount of risk-taking is not just permitted but encouraged, heroes, are born. When heroes are created during the peaks of the market, the same heroes will be the ones who will deliver Innovation and great ideas during a down cycle and help the organization jump from peak to peak.

    Dionne Van Zyl

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  • Layoffs Don’t Have To Be Inevitable If You Reevaluate Your Spending in These Areas | Entrepreneur

    Layoffs Don’t Have To Be Inevitable If You Reevaluate Your Spending in These Areas | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    The fact is, the global growth profile of 2023 is showing a downward trend. According to the IMF forecast, this year the economy will grow only 2.7%, compared to 3.2% in 2022.

    In fact, the projected data for advanced economies look even more discouraging, with the World Bank predicting 0.5% economic growth in the U.S. in 2023, which is almost 2% lower than the previous iterations. This leaves experts scratching their heads on whether we’re imminently running towards yet another big recession, or not just yet.

    Team cuts are imminent, aren’t they?

    Supposedly driven by the lingering downward economic spiral, thousands of businesses across various market verticals (mostly tech, media, finance and healthcare) announced huge staff cuts back in 2022, and this neverending firing streak continues.

    Here are just some of the most stunning numbers.

    In January 2023, Sundar Pichai, the CEO of Google and Alphabet, announced the company’s plans to lay off 12,000 team members. Disney is planning to cut back its workforce by at least 7,000 jobs. Amazon will be letting go of 18,000 employees. Goldman Sachs will say goodbye to over 3,000 employees, Philips will be cutting over 6,000 jobs worldwide, and news of mass layoffs just keep coming. Overall, over 125,000 people were already laid off in 2023 by the tech companies alone, per layoffs.fyi.

    However, is the global market slow-down actually the key factor, influencing the massive workforce cuts? While the need to cut spending may be the common ground, in a more nuanced context — not so much.

    Namely, a lot of the companies in the tech sector, like Peloton or Zoom are facing overstaffing challenges, fueled by their exponential growth dynamics during the Covid-19 pandemic, which has turned out virtually impossible to sustain upon its decline.

    Meanwhile, in the real sectors, like the automotive industry, some companies, like Jeep Cherokee explained their plant is idling amid rising electronic vehicle (EV) costs.

    Related: Layoffs Abound Across Industries — But These Major Companies Are Still Hiring

    But most surprisingly, some commenters presume many companies are just “following the herd” in their market niche. In plain words, their assumption is, while the widely-predicted recession forces businesses to tie their belts in one way or another, laying off employees is just their go-to solution, which is seemingly working for their competitors. As business professor Jeffrey Pfeffer told Stanford News, “They are doing it because other companies are doing it.”

    And the truth is, a massive workforce cut doesn’t actually save money in a short-term perspective (imagine the severance pay volumes), and can even flatten the business development in the case of mid-sized companies and small startups.

    How to cut spending without laying off your team

    In view of the tracked decline in economic activities, in some ways fueled by the lingering supply chain disruptions, and the sharp increase of inflation rates, cutting operational spending seems to be a reasonable idea. Not only can it remove extra pressure from business owners’ shoulders amid uncertain times, but also free up extra resources to fund the growth areas.

    And, as mentioned above, letting go of your team members is hardly the best choice (in case you’re not overstaffed, of course), so it’s crucial that you eliminate the latter risks from the equation right away.

    So, how do you determine that you’re overstaffed?

    Essentially speaking, you need to analyze the average manager’s span of control in your company, or in plain words, how many people are reporting to each of them. This number can be different depending on the type of firm or industry. Anyway, the common ground is that if it’s lower than 5-6, the organizational structure most likely has too many levels, with the average optimum management-to-employee ratio currently ranging from 1:15 to 1:20(25).

    Suppose, you don’t have apparent issues with the tall span of control, and the overstaffing risks are not your business case. Consider the following checklist for evaluating possibilities to lower the overall company’s spending without taking a toll on your business processes and cutting the team:

    SaaS spending

    Quite predictably, even small startups with limited funding usually use a bulk of paid SaaS solutions in their business routine (e.g. from a CRM and task management tools to a mere G Suite and accounting software).

    And while the importance of such tools is hardly questionable, their actual selection, as well as the pricing, sometimes is. What I’m saying is that even though the high-quality product does cost money, negotiating a discount happens to be a far more rarely utilized option than one might imagine, which is a huge miss.

    And if you’re paying for two similar management tools, with minor differences, perhaps, the use of a more advanced version of one of these instead will be actually cheaper, especially in the long run.

    Office space rent

    Even though the end of the acute period of the Covid-19 pandemic has stimulated many businesses to return to offices, chances are opting for a hybrid office may help reduce spending costs quite a lot.

    Let’s do some quick math. Imagine you had 10 people in the office on a permanent basis, and consider rearranging the office space to a commonly-used area, which can fit 5 people at a time. This will cut the desk space in half, as well as reduce the required office space for the communal areas (like kitchens, breakout rooms and meeting rooms) by at least 20%.

    Given that the average space per employee was estimated at 75 – 150 sq feet in the pre-pandemic times, as per JLL research (50% deskspace and 50% commonly used areas), the change of the office type from an offline to a hybrid one in the example herein can help to reduce the required office space by at least 200 sq feet.

    In plain money, this could potentially save you around $7,000 monthly in office rent in Seattle, for instance.

    Related: Looking for a New Office for Your Team in 2023? Here’s What to Take into Account.

    Human resources

    While keeping your optimal team as is will definitely help streamline operational processes, you might consider limiting the hiring process for new employees, potentially needed for your newly-developed business projects.

    That is, if you’re hoping to launch two new products in 2023, perhaps, a wise idea would be to select and prioritize the release of just one during a downturn, in order to spare financial resources. Another way to cut spending on human resources would be to readjust the rewards and recognition programs for employees, i.e. making them more tailored to particular business KPIs. In such a way you’ll be able to keep your team motivated, without overspending money on yearly bonuses across the board.

    Ultimately, it’s up to each business owner to make their decision on how to prioritize spending and whether to cut their staff, or not during a downturn, but navigating a company amid uncertain times usually requires a strong team, so why risk losing it, having invested time and resources into building it? That is the question.

    Anton Liaskovskyi

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  • 3 Recession-Proof Strategies for Small Business Owners

    3 Recession-Proof Strategies for Small Business Owners

    Opinions expressed by Entrepreneur contributors are their own.

    Unless you’ve been hiding under a rock, you’ve probably read the dreary forecasts from JPMorgan, Citi and Goldman Sachs, which all agree that 2023 will be a rough year for the economy, perhaps even kicking off a “mild recession.”

    But try as they might with their recession talk on the heels of a global pandemic, supply chain chaos and market upheaval, we resilient entrepreneurs aren’t ready to throw in the towel quite yet.

    Small business owners’ most significant advantage is our ability to stay nimble and pivot toward opportunity. I say this as someone who built and exited a company after the last recession — when many founders rode a wave of “creative destruction” where smaller competitors thrived as big firms faltered. The little people, not the corporate behemoths, were best positioned to pick up the pieces and innovate.

    To see how others feel about this moment, Hello Alice surveyed 2,635 small business owners to gauge their sentiment heading into the new year. The findings, published in partnership with Mastercard, show that while nearly two-thirds of entrepreneurs are worried about a potential recession, an astounding 73% predict their businesses will grow this year.

    If that sounds counterintuitive, I agree. But a closer look at the results illustrates how scrappy entrepreneurs can be in the face of adversity. Rather than wait and see what happens, owners are already crafting action plans and seeking solutions to prepare them for the challenges ahead.

    Based on our survey results, here are three strategies for small business owners hoping to beat the 2023 trendlines.

    Related: 7 Recession-Proof Industries to Protect Your Money

    1) Make sure you have access to working capital now

    In uncertain times, small business owners need additional funding, particularly those mainly relying on bootstrapping.

    Why? Here are a few findings to set the scene:

    • 66% of owners said their expenses increased in 2022
    • 70% said their revenue stalled or decreased in 2022
    • 70% plan to apply for funding in 2023

    So far, entrepreneurs have successfully combatted inflation with price increases and adjustments to product offerings. Nearly two-thirds of owners said their business ended 2022 in a financial position as good or better than the year before. But the convergence of expenses and revenue tells a story of shrinking margins squeezed by inflated costs. You can’t raise prices forever, and events like a recession are certain to upend sales forecasts.

    Consider the following options to ensure you have ample working capital to overcome any financial surprises:

    • Develop a relationship with your bank. Lay the groundwork now, and you’ll have a friendly face to help you navigate available resources and facilitate potential financing applications.
    • Seek out a business credit card. Credit cards help you cover unexpected expenses and pursue new opportunities, often while earning valuable rewards that you can reinvest in your business.
    • Visit the Small Business Funding Center. This free resource matches you with relevant grants, loans, and credit opportunities.

    Related: How to Know If You Need Funding (and How to Get It)

    2) Get scrappy with tech solutions

    In our outlook survey, businesses ranked marketing among their top concerns. Owners are worried that price increases will reduce their overall customers, and the end of budget-friendly digital marketing makes customer acquisition more difficult (and expensive) than ever.

    Thankfully, a growing range of tech solutions can help owners optimize their marketing efforts while fitting into any budget. Here are a few ideas to get started:

    • Adopt software tools. Platforms like Constant Contact, Hubspot Marketing Hub and Sprout Social help you target your audience and amplify your reach.
    • Explore freelance help. Resources like Fiverr, Upwork, and MarketerHire can match you with affordable digital marketing support to take the work off your plate.
    • Look for discounts. Take advantage of introductory offers and seasonal discounts to test-drive tools before making a long-term commitment. Not sure where to look? The Hello Alice Business Solutions Center is one free resource that curates deals on popular software solutions to help owners shop and save.

    3) Be ready to fail fast and fail often

    Finally, in a reassuring sign that owners feel confident, a majority of small businesses plan to hire this year. According to our survey, twice as many business owners plan to hire in 2023 (52%) as were actively hiring in 2022 (26%). Growing headcounts are a proxy for growing businesses, but there’s still an inherent danger to making big changes, especially during uncertain times.

    Instead, operate with a startup mentality that sets up low-stakes experiments to explore an idea’s potential. Rather than dump your marketing budget into TikTok, test the waters with different types of content. Before bringing someone on full-time, trial them on a part-time or project basis. Set goals, measure outcomes, and assess where to go from there.

    Some of your 2023 experiments are sure to fail, but this innovative mindset helps you conserve valuable resources to invest in long-term growth in the years to come. And remember, the economy may flounder for a bit, but as entrepreneurs, times of uncertainty are when we thrive.

    Related: By Failing to Prepare, You Are Indeed Preparing to Fail

    Carolyn Rodz

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  • Survive The Recession by Tackling This Widespread Workplace Issue

    Survive The Recession by Tackling This Widespread Workplace Issue

    Opinions expressed by Entrepreneur contributors are their own.

    According to a January 2022 article from the American Psychological Association, employee burnout is hitting record highs around the globe, and in every industry — with “…nearly 3 in 5 employees report[ing] negative impacts of work-related stress, including lack of interest, motivation or energy.” This not only harms employees but your business will likely be hit hard too, in the form of reduced productivity, errors, healthcare costs, incivility and attrition. To recession-proof your business, you need to help your people heal from burnout, and then shift your culture to eliminate the causes using the science-backed strategies provided.

    What is burnout?

    Put simply, this term is defined as a medically diagnosable condition of emotional, physical and mental exhaustion due to long-term stress. Authors of Burnout: The Secret to Unlocking the Stress Cycle (Ballantine Books, 2019), sisters Emily Nagoski, Ph.D. and Amelia Nagoski, D.M.A. have identified its three main components:

    Britt Andreatta

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  • Once a Skeptic, Elon Musk Now Embraces This Divisive Workplace Policy — and You Should, Too.

    Once a Skeptic, Elon Musk Now Embraces This Divisive Workplace Policy — and You Should, Too.

    Opinions expressed by Entrepreneur contributors are their own.

    As part of ongoing cost-cutting measures under new owner and CEO Elon Musk, Twitter is shutting down its Seattle offices and instructing employees to work remotely. That’s despite Musk earlier claiming that remote workers are only “pretending to work” and banning remote work at Twitter upon taking it over in early November.

    So what explains his change of heart? Apparently, it’s the costs associated with the company’s Seattle office, including rent but also services such as cleaning and security.

    The fact that Musk — an extreme skeptic of remote work — acknowledged its cost-cutting benefits illustrates the future of remote work for the U.S. economy. It highlights the misleading nature of many headlines that claim an impending recession would lead to the end of remote work since a cooling labor market will give executives more control to require employees to return to the office. That’s because many employees prefer to work remotely and most executives want their employees in the office.

    However, the reality is that the impact of a recession on remote work is more complex than simple leverage from a cooling labor market. Of course, it’s true that during a recession, employers have more leverage. At the same time, they need to focus on maximizing the return on investment from their employees.

    Related: They Say Remote Work Is Bad For Employees, But Most Research Suggests Otherwise — A Behavioral Economist Explains.

    In times of economic growth, executives have more freedom to make decisions based on their personal preferences and intuitions. But during a recession, they may need to hunker down, be more disciplined, and rely on data to make decisions that make the most financial sense for the company — like Musk choosing to have Twitter staff work remotely for the sake of cutting costs. This focus on profitability over personal preferences benefits remote work.

    Evidence shows that remote work is more productive than in-office work, which makes facilitating remote work especially important in a time of cutting costs since higher productivity means companies need fewer employees to do the same amount of work. A study from Stanford University reported remote workers were 5% more productive than in-office workers in the summer of 2020. By the spring of 2022, this productivity gap had increased to 9% as companies continued to improve their remote work practices and invested in technology that supported remote work. A different study used employee monitoring software, and also found that remote workers are more productive than in-office workers. A recent National Bureau of Economic Research (NBER) study found that productivity growth in industries with a high reliance on remote work, such as IT and finance, grew from 1.1% between 2010 and 2019 to 3.3% since the start of the pandemic. In contrast, industries that rely on in-person contact, such as transportation, dining, and hospitality, experienced a change in productivity growth from an average increase of 0.6% between 2010 and 2019 to a decrease of 2.6% since the start of the pandemic.

    While collaboration and innovation may be weaker in a remote setting compared to an office setting, this can be addressed by using best practices for collaboration and innovation in remote settings, such as virtual asynchronous brainstorming. Studies have also found that greater worker autonomy and flexibility can lead to more innovation, and remote work facilitates autonomy.

    In addition to being more productive, remote workers show a willingness to work for lower pay, another factor that will boost reliance on remote work in an upcoming recession. An NBER study illustrates that remote work lowered wage growth by 2% over the first two years of the pandemic, as employees often view remote work as a valuable benefit and decreased salary demands in exchange for remote work options. For a specific example, a survey of 3,000 workers at top companies such as Google, Amazon, and Microsoft found that 64% would prefer to work from home permanently rather than receive a $30,000 pay raise. Companies that offer remote work opportunities may also benefit from lower cost-of-living expenses, as they can hire employees from lower-cost-of-living areas within the U.S. or even outside the country.

    Even during a recession, companies need to hire to replace people who leave, and we’re in an unusual situation of a surprisingly tight labor market despite the negative economic news. Remote work makes it easier for companies to attract top talent, as a Morning Consult survey found that over 60% of respondents would be more likely to apply for a job that offered remote work options.

    Remote work can also improve employee retention, and it’s very costly to replace employees, especially given the challenge of hiring good talent in our current labor market. A survey by the ADP Institute found that nearly two-thirds of respondents would consider looking for a new job if they were required to work in the office full-time. Flexibility is a key factor in job satisfaction, and a study by the National Bureau of Economic Research found that offering a hybrid work schedule, which includes both remote and in-office work, can improve retention by over a third, compared to a fully office-centric schedule. In fact, one of my clients who I helped figure out future work arrangements, made the decision to adopt a fully remote model after finding that over 85% of its employees preferred full-time remote work.

    Even the Biden administration has recognized the benefits of remote work. After initially encouraging federal workers to return to the office, the administration now changed its stance and began advocating for remote work as a way to improve recruitment, retention and productivity among government employees. That stance matches a Cisco survey of federal government workers, which found that 66% prefer to work remotely more than half the time, with 85% saying that the ability to work from home significantly improves their job satisfaction.

    As the cost savings and productivity benefits of remote work become more apparent, more traditionalist executives will recognize the benefits of supporting their employees working remotely on a full-or-part-time basis. However, this shift may prove challenging for these leaders due to cognitive dissonance, or the difficulty in reconciling conflicting information, such as their personal preferences and the financial realities of remote work. Moreover, traditionalist leaders struggle to adapt to new work models due to cognitive biases, which impair decision-making in various areas of life. The most effective leaders are willing to change their minds when confronted with new information, while less capable leaders may fall victim to confirmation bias, seeking out information that supports their preexisting beliefs, or the ostrich effect, denying negative facts about the world. As a result, companies with inflexible leaders will underperform compared to more adaptable organizations, and these leaders will ultimately be replaced by those who embrace remote work.

    Leaders need to show much more discipline in troubled economic times, focusing on company bottom lines over personal preferences. Remote work means greater productivity and lower salary costs, along with decreased costs through improved recruitment and retention. These people-related cost benefits add on top of the cuts in expenses for rent, cleaning, and security as companies give up now-unnecessary office space. In my conversations with clients who I help transition to hybrid and remote work, these cost savings have been increasingly important in recent months as a recession looms. And if even hard-line opponents of remote work like Musk see these obvious benefits, we can anticipate that a recession will prove a major boost to remote work.

    Gleb Tsipursky

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  • What Is a Recession and How Do You Prepare for One?

    What Is a Recession and How Do You Prepare for One?

    The news is abuzz with rumors of the next recession coming in 2023 or 2024. But for most Americans, all of that triggers a sudden panic and a desperate need to look at one’s bank account.

    What is a recession, what does it mean, and how can you prepare yourself and your family’s finances for one? This article will answer each of these questions and more. By the end, you’ll know what to expect and how to prepare for a recession.

    What is a recession?

    According to economists working for the National Bureau of Economic Research, a recession is a prolonged period of economic downturn or declining economic activity.

    It affects a nation’s or the world’s entire economy and lasts for a few months or more. In some ways, the best way to understand the recession is to compare it to “regular” or positive economic activity and GDP.

    GDP (gross domestic product) is essentially the combined value of the goods and services made by an economy, like the American economy. The country’s GDP grows a bit each day/week/month in a standard economy.

    When a recession kicks in, there is no economic expansion. Instead, the GDP is negative — the value of goods and services in the economy decreases — for more than two quarters or approximately six months. People stop spending as much money when this happens because the dollar’s value decreases.

    Related: Are We in a Recession? Here’s What Economists Say

    This decrease in consumer demand triggers a decline in industrial production, exacerbating the spiral effect and making a recession last longer. A significant decline in the business cycle, characterized by many consecutive quarters of lower consumer spending, may lead to job losses or a high unemployment rate.

    Several past recessions have stalled economic growth and led to the depletion of the Federal Reserve or the “Fed.”

    These include the recession leading into World War II, the Great Recession financial crisis, which occurred in 2008 from speculation on real estate, and the most recent recession brought on by the Covid-19 pandemic and the necessary cutback/slowdown on retail sales in the U.S. economy.

    Signs of a recession

    Aside from this recession indicator, some typical economic indicators also have other signs and symptoms to pay attention to.

    These signs include:

    • More layoffs than average, a tighter labor market.
    • A general, widespread decline in stock market stock prices.
    • More businesses are going bankrupt than usual.
    • Fewer raises or promotions for workers.

    Related: Are We Headed for a Recession? It’s Complicated.

    As for GDP? According to some sources, the American GDP was -1.6% in the first quarter of 2022 and -0.9% in the second quarter of 2022. Technically, this means there is currently a recession, regardless of what people say.

    Note that a recession differs from a depression, which is much more severe. In a depression, the economy tanks significantly, and many more people may lose their jobs and money.

    In contrast, a recession is usually relatively short-lived. Some people may not feel a recession’s impact, depending on how much money they have saved up and their financial situation before the recession occurs.

    In any case, a recession is never good news, which could signify that you must prepare accordingly.

    How to prepare for a recession

    Fortunately, there are multiple ways in which you can prepare for a recession. Good recession prep can keep your finances secure until the recession recedes, allowing you to maintain your investments, keep your savings account intact and provide your family with peace of mind.

    Knock out as much debt as possible (and avoid new debt)

    Your priority should be to get rid of as much debt in your name as possible. You should already be trying to clear debt aggressively. The longer you leave it hanging around, the worse your credit will be and the more interest fees you’ll pay over time — it’s lost funds.

    As you put more of your money toward knocking out your debt, prioritize high-interest debt, such as credit cards and loans with high-interest rates. When you get rid of as much debt as possible, you set yourself up for financial success during the potentially turbulent economic times ahead.

    Avoid taking out any unnecessary loans or opening up new credit accounts during this timeframe. If you avoid further debt, you’ll have more money to spend on savings or necessities, which may be necessary soon.

    Related: How to Recession-Proof Your Business

    Keep saving aggressively

    Speaking of saving, you should continue to save aggressively or even save more money than you were previously.

    You might not get an unexpected promotion or pay raise during the recession. Even worse, your job could be at risk if you recently joined a company or are at the beginning of your professional career.

    In these cases and others, your income streams could dry up unexpectedly. If you save aggressively before that happens, you’ll be well-positioned to get back on your feet and weather this economic storm until clear skies return.

    Try to save as aggressively as possible and put that money into a secure savings account. That way, you’ll earn interest on those savings and avoid accidentally spending the money.

    Diversify investments

    Plunging numbers and red lines on charts are not reasons to withdraw all of your investments or blow up your portfolio if you’re invested in the stock market. You should keep your money in the market; after all, the stock market will eventually rebound just like it always does.

    Instead of panicking, diversify your investments by distributing your money into different stocks, funds, and other securities and assets. When you diversify your portfolio further, you protect it from economic damage, even from recessions.

    Plus, if you diversify your investments instead of withdrawing from the market, you’ll prevent yourself from losing money in the short term.

    Every time a recession occurs, some Americans invested in the market sell all of their securities, which only lowers prices for those securities. Then they regret this panicked decision as the market inevitably rebounds, with many stocks achieving higher prices than they reached previously.

    Bottom line: keep your investments in the market and keep your eye on the prize, particularly for long-term gains. A recession will eventually pass. Your current positions may be unattainable the next time you have money to invest in the market.

    Related: Worried About a Recession? Do This to Prepare Your Company.

    Bump up your credit

    Your credit score is also essential during a recession. You should improve your credit score before and during a recession whenever possible, primarily by eliminating high-interest debt such as credit card debt.

    If necessary, move any high-interest debt to a new credit card with an introductory 0% APR offer for any balance transfer funds. This can be an excellent way to quickly pay down any other debt in your name (in keeping with the tip above) without paying extra interest.

    In any case, try to improve your credit so you can take out emergency loans if necessary, and so any other fees or financial strain you face over the next few months, reduce your credit by as little as possible. Many people feel the aftereffects of recessions for years to come, primarily because it damages their savings accounts or credit scores.

    Don’t panic

    Do not panic if and when a recession occurs or when the news anchors start talking about it. Contrary to what some may believe, recessions are standard parts of the economic cycles inherent in capitalism.

    Simply put, recessions are inevitable declines in economic activity that eventually fade away. Once people stop panicking about the effects of a recession, economic activity should return to normal, and businesses will start to boom again.

    Just thinking of a recession in this light — a regular element of the economy and not something to necessarily be feared — will help you keep your head straight as you plan.

    Not panicking is crucial, so you keep spending and saving money, which are essential actions to do your part to prevent the economy from spiraling downward even further.

    Summary

    Recessions might be financially uncomfortable, but they are far from devastating if you take the right steps beforehand. The proper prep and patience will go a long way toward shoring up your bank accounts and protecting your finances throughout the upcoming recession until the market upswings again.

    Looking to expand your financial knowledge with more articles like this one? Explore more of Entrepreneur’s Money & Finance articles here.

    Entrepreneur Staff

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  • 2023 Is The Year and a Fear of Uncertainty. Here’s How to Navigate It.

    2023 Is The Year and a Fear of Uncertainty. Here’s How to Navigate It.

    Opinions expressed by Entrepreneur contributors are their own.

    As we approach 2023, there is a ringing sound of uncertainty, amplified by foreboding headlines that warn us of a looming recession, or, as it’s described in one article, “a big reset,” — a term used to describe widespread layoffs across the technology sector. The latest report by the U.S. Bureau of Labor Statistics just adds to the collective discourse that we’re, well, doomed, stating that 263,000 new jobs have been added to the workforce — more than what was expected — yet the hiring economy remains extremely tight.

    The reality is that uncertainty hasn’t actually risen — it’s always been there. What is rising, in fact, is our fear of uncertainty. And we, as company leaders, try to do everything in our power to mitigate it, analyze it and wish it away. But the truth is, uncertainty will always be there. We may shore up our supply chain, reduce inflation and vaccinate ourselves against Covid-19, but a new health scare may hit, a war might break out or a natural disaster strike.

    As we kick off 2023, entrepreneurs have the opportunity to develop a relationship with uncertainty and get more comfortable with its existence. In fact, according to the Kauffman Foundation, a staggering 57% of Fortune 500 companies were started during a recession, so despite the fear of what’s to come, there can be a path to success. Here are seven ways to harness the unknown and find opportunity within that uncertainty:

    1. Identify what is in and out of your control

    No matter how much we plan, research and analyze, there will always be forces that are out of our control. Instead of obsessing about ridding ourselves of these circumstances, we must analyze our challenges and categorize them according to what we can and cannot control. For those we cannot control, we should be aware of them but also not dwell on trying to predict their outcomes. No one could foresee the effect a pandemic would have on their individual business. However, we can now think about the lessons learned, appreciate the innovation that occurred and reflect on how we can operate more nimbly in the future.

    2. Reframe your uncertainty

    Our tendency, as entrepreneurs, is to correlate uncertainty with a negative outcome. We don’t know whether we’ll raise the amount of capital we need, we don’t know whether our product will find market fit once launched, we don’t know whether our company will survive. The truth is, we also don’t know whether we’ll scale beyond our wildest dreams, an out-of-scope event will come our way that opens a new door, or an unidentified need for our product or service will emerge. As Steve Jobs once said, “You can’t connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future.” Uncertainty can be your biggest advantage.

    Related: How to Protect and Retain Control Over Your Business

    3. Listen to what your sense of uncertainty is telling you

    Many times, we as entrepreneurs feel a strong sense of uncertainty or fear about areas that affect us personally — meaning we are particularly sensitive to those topics that elicit a sense of fear-based bias resulting from our own life experiences. If you once had a poor experience living in a different city, state or country, for example, and are years later offered an opportunity to expand there, chances are your uncertainty bias will impact you. Perhaps you had raised money from a venture capital firm at one point in your career and that situation didn’t turn out well. You may be skeptical the second time around, potentially hindering an opportunity for a constructive investment relationship.

    4. Detach from your desired outcome

    There’s an old Yiddish proverb: “We plan. God laughs.” Many entrepreneurs kick off their ventures with their own definition of success in mind, and they become married to it. Any deviation is a failure. However, to properly navigate the reality of our futures being uncertain, we must detach from our own definitions of success — removing the ego from the outcome — and be open to what may unveil itself along the way. The uncertainty of such is also the joy.

    5. Understand the bigger life picture

    There is a bigger world out there, and it is important that we have perspective. Take a walk in nature and realize those things we obsess about are things in our own small universe. Uncertainty is inevitable, and it is foolish for us to believe that we have the power to control so much that goes on. Your life will not depend on the success of your venture. Today is a moment in time and we are but specks in a massive universe. Perspective is imperative.

    7. Recognize your survival instinct

    The human brain was formed over millions of years. We have an innate survival instinct that comes from the early days of being cavemen/women. For example, scientists have postulated that our need to be accepted by others stems from the previous reality that if the group were to kick us out, we’d be away from the fire and prone to attack by predators. This level of uncertainty held an entirely different scope at that time. Yet today our brains are still wired with the same survival-based fight-or-flight framework.

    Related: Many People Are Burdened by Fear. Here’s How I Embrace It.

    8. Approach with a beginner’s mind

    Our lives are all made of unique experiences that are individual to us. These experiences make up the lens through which we view the world. A toddler will not be afraid of the stock market crashing. However, s/he may be fearful of being alone or not having food. As entrepreneurs, we need to remove our biases and retrain our minds to approach our ventures with the wisdom of past experiences but also a sense of youthful naivety.

    As we kick off 2023, we, as entrepreneurs, have an opportunity to redefine our relationship with uncertainty. There is an opportunity to partner with the feeling of uncertainty by acknowledging its existence, asking what it is trying to tell us and being comfortable setting our own boundaries with its partner: fear. Uncertainty can serve as the pavement for our future path to success. We just have to become friends first.

    Kalon Gutierrez

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  • Prioritize This Tool to Increase Customer Satisfaction in a Recession

    Prioritize This Tool to Increase Customer Satisfaction in a Recession

    Opinions expressed by Entrepreneur contributors are their own.

    As economists continue to debate whether or not a recession is in fact going to happen, many companies are busy developing strategic plans should this come to fruition, taking the “hurry up and wait” mentality and focusing efforts on becoming more efficient with their dollars.

    The past few years have been transformative for many, and hopefully, your business has implemented some customer experience and digital transformation initiatives. Maybe you were already ahead of the curve or in more cases than not, the pandemic lit a fire under your organization as it did for many others. But if not, the good news is that it’s not too late to get started and with the economic uncertainty, now is a perfect time. The first step? Giving your customers what they really want with self-service options, which in turn will help you operate more efficiently from a digital perspective and more importantly, lead you through the potential recession.

    So how is this done? Let’s take a look at what your company can (and should) be doing:

    Help your customers help themselves — literally

    We are all familiar with how sales used to happen: Handshakes, order forms and catalogs over lunch. This method still worked before Covid-19, but changed drastically afterward — everything went remote and many companies had no choice but to go digital if they wanted to keep up. And now with another likely economic downturn, everyone’s minds are on their wallets, which means that one of the easiest ways to level up your business and lower the cost of sales is to ensure your customers have access to self-serve options so they can get the products they need without assistance. Convenience is key, as is ease of use — for every single interaction.

    It doesn’t really matter what your starting point is. Maybe you’re still employing dozens or even hundreds of field reps that are meeting face-to-face with customers, or maybe your customers use a call center where they’re helped by a rep with their product needs. The thing that matters most is where you need to go: A thoughtful digital experience tailored to your customer’s needs, accessible from anywhere to get what they need in real-time. Things that are easy should be easy. This means that if your customer wants to do something like order a product, track it or update payment information with you, they should be able to do all of those things themselves at a time and place that is most convenient for them. Therefore, creating the digital infrastructure for this is crucial. If something isn’t easy and cannot be done on its own, a customer may second guess their decision or withgo it all together — after all, budgets are tighter, so why waste time on something that isn’t convenient? Upgrading digital also means fewer sales responsibilities. However, with this lowered-cost-of-sale concept may come the logical thought, “are you suggesting we reduce the size of our sales team?”

    Related: The 6 Essential In-Store Experiences That Your Customers Want to See

    Make sure your sales team is still providing exceptional customer service

    To be clear, we are not advocating for you to make drastic changes to your sales team. In fact, quite the opposite. While we’d argue that many clients, especially the big strategic ones, should have a dedicated human being they can go to when they need something, there are always going to be long-tail customers that are perfectly happy to get set up once and from then on, use self-service for all routine smaller orders or account status questions.

    Once your sales team is freed from checking inventory, providing shipping updates, and other administrative tasks, they have a lot more time to do what they’re best at: building relationships and serving your customers with an unparalleled experience that differentiates your company from others. After this is implemented, watch as your customer relationships thrive and flourish. The option of self-service options will be a huge support for your sales team and make them better at their jobs and happier at work, which means you’re far less likely to deal with retention problems – something many industries are still feeling the crunch of in a post-Covid world.

    When we start working with just about any client, one of the first things we want to know is how their selling gets done, and what we can do to make it better, because, at the end of the day, this is what ultimately helps the client’s bottom line. What are the nuts and bolts of how your products are ordered to end up in your customers’ hands? While it may seem that you have bigger things to worry about in the face of economic uncertainty than changing your selling model, I’d argue there’s never been a more important time. Self-service may be the very thing that helps you weather this storm and thrive well beyond it.

    Andrew Walker

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  • 5 Things to Do Now to Propel Your Business in 2023

    5 Things to Do Now to Propel Your Business in 2023

    Opinions expressed by Entrepreneur contributors are their own.

    Entrepreneurship is a daily leap of faith. In times of economic uncertainty, that leap may feel like a dive off a cliff. We are in one of those times. It likely will take months to fully re-adjust to the forces that have pummeled the world’s economy, and to entrepreneurs, months can feel like years.

    With the right playbook, entrepreneurs can survive and thrive in whatever economic scenario. Here are five things you can do to propel your business ahead now and through the difficulties of business cycles for years to come.

    1. Learn the lessons of more challenging times

    A rocky economy presents a unique opportunity to make tough decisions about the business plan. Everything is open to reexamination. How has the market changed? Are your customers facing challenges that create new opportunities for your solutions? How do new conditions change your assumptions, and what actions do you need to take in response?

    Critically evaluate your product roadmap. Is this the time to pivot or become more aggressive with your current plans? Prioritize the highest margin features that are achievable in the next twelve months. Push out projects that don’t make that list, and re-assign resources accordingly. Re-assess pricing. Even as inflation tiptoes back from the highest levels in forty years, raw material and transportation costs remain way up. What will impact your customers if you adjust the pricing or add surcharges to offset these costs, at least temporarily?

    It’s been a rough year for hiring. Many companies took the talent they could get. If there are employees or gig workers who would fare better in a different job, now is the time to let them go. Make tough-minded corrections that will pay off overall — corrections that might be avoidable in less challenging times.

    Related: How to Turn Inflation and Recession into Your Largest Business Opportunity

    2. Tighten your grip on cash

    Venture capitalists are pulling back. In the third quarter, Crunchbase reported that funding for startups in U.S. and Canada fell 50% year-over-year. Valuations are down across the board. If you are fortunate enough to be a later-stage startup that benefited from VC largess in 2021, make your last raise last longer than intended.

    Keep your dry powder dry, and put off going for another round until the markets even out. Reemphasize the basics for early-stage companies with less market validation and greater distance between now and a potential exit. Delay all capital expenditures. Leverage the hybrid work model if possible, to reduce rent and other office expenses. Continue with Zoom or Google Meet. Now is not the time to rack up travel costs. Re-negotiate fees and terms with service providers. Seek credit terms with key suppliers, in a word, bootstrap.

    3. Talk to customers, in person. Now.

    How have the business needs of your customers — whether paying or beta — changed over the last 18 months? Are there benefits to your solution that have more recognized value now? Nearly every business, for example, from corporates to startups, has been forced to re-learn the lessons of supply chain management. Startups that can help their customers make better business decisions based on artificial intelligence (AI), reduce costs by improving inventory management or protect against out-of-stock scenarios by identifying and building relationships with new, more local sources of supply will have an edge.

    Related: Finding Validation in Serving Customers

    4. Non-dilutive capital

    According to PitchBook, venture capitalists are showing greater interest in portfolio companies “whose satellite, robotics and software tools can do double duty” in military and commercial markets. International conflicts are one reason, of course.

    Another is that the defense and military security industries are generally viewed as recession-proof. Our firm routinely encourages portfolio companies to consider non-dilutive funding from the Small Business Administration — grants to support cutting-edge technologies range from $150,000 to more than $1 million.

    Navigating the application process isn’t for the faint of heart. A startup must be realistic about the work involved, but in many states, there are resources to help. Besides the funding, severe responses to agency requests for proposals are reviewed and evaluated by technologists. At a minimum, this can be terrific feedback and a great source of industry contacts.

    5. Blue-chip cultures attract blue-chip talent

    Company culture can be an asset or a liability. An inclusive, rich culture helps key hires say yes. Finding stakeholders that believe what you believe and are aligned with your team’s values significantly improves the odds that they will stick with you in good times or bad.

    After months of “great resignation” fever, the over-heated demand for talent may be cooling off. Maybe offers aren’t as fast or grand as they were a year ago. Maybe Twitter won’t be the only advanced technology business to let people go. Regardless, the search for great talent isn’t a faucet that a young company turns off and on. A startup might modulate the timing or the number of hires but stand at the ready to recruit and filter for culture fit.

    Related: 3 Ways to Stay Competitive in the War for Talent

    With the right mindset and intentional approach, an entrepreneur can make 2023 a year to strive and thrive. As Yogi Berra, my favorite baseball player of all time, said, “Swing at the strikes.” In business, like baseball, the right swing can turn even the most challenging pitch into a hit.

    Tom Walker

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  • 4 Ways To Create and Sustain A Recession-Proof Business

    4 Ways To Create and Sustain A Recession-Proof Business

    Opinions expressed by Entrepreneur contributors are their own.

    Being a boss is hard, and it can elicit overwhelm and stress daily. This overwhelm is exacerbated when economic instability is looming. If you are an entrepreneur (in good times), you understand the map to success is stitched together with rejection, innovation and inspiration. My tenure as a business consultant and coach has given me an eagle-eye view of the fumbles and missteps of emerging talent. Let’s peek behind the curtain, which offers a glimpse into entrepreneurs‘ biggest enemies.

    The enemies of entrepreneurship are aligning energies with promises of instant gratification, the inability to build relationships, and a hyper-focus on the bottom line. The words “easy” and “instant” are nowhere in the definition of entrepreneurship. Most importantly, in times of flux, the foundation of business building is consistency.

    I see entrepreneurs who are brainwashed by the glorious algorithms of social media. Many entrepreneurs believe that TikTok and Instagram are their paths to riches and fame. I have walked with brilliant small business owners who focus on the bottom line and fail to understand the power of relationships. And I have been privy to the wave of overwhelm when business owners are faced with rejection. The energy that we align ourselves with is a make-or-break deal. And when we attempt to elevate our business to the next level alone, we are often banished to an island of stagnancy.

    Related: How to Recession-Proof Your Business

    Flexibility is the key to being recession-proof

    Experiencing fluctuations as a business is a norm. Adaptability is the cornerstone of an agile company that can withstand blips on the radar and experience steady growth. With the recession looming and the stock market volatility on the tips of everyone’s tongues, it is time to think outside the box and become recession-proof.

    When challenges are lobbed at us, it is often an innate response to turn inward, spend less money, and recoil from opportunity. Many entrepreneurs hunker down and wait for the juicy markets of yesteryear. I learned the lesson of reacting to spikes in global instability the hard way. When the pandemic ebbed its way into global consciousness, my immediate response was to go into overdrive. I amped up marketing strategies with phronetic energy. I did this because I connected with the news media’s deafening cadence, which proclaimed imminent economic doom. I attached my energy to the panic — and went into overdrive. This frantic attempt at trying to stay relevant led to burnout.

    When I took a step back to analyze my value proposition during an economic downturn, I recognized that my services could align in a new way with the new needs of potential clients. It is imperative to understand the needs of potential clients, no matter the economic or social climate. For example, if you are a coach or consultant, you must have your finger on the pulse of what your people need from you now.

    Staying stagnant in your brand messaging is perhaps the worst path for any entrepreneur. Being relevant, flexible and understanding your value in times of calamity can be your biggest strength. To become recession-proof, you must audit the fluctuations of your clients’ most significant needs. A savvy entrepreneur will adjust and fulfill their client’s new needs.

    Asking for help is a strength

    One of my most successful clients, who has withstood the fluctuations of an ever-changing market, recognized that she must be proactive in her success. Mika Altidor, the founder of the acclaimed vegan bakery, V&M Bakery, knew instinctively that the pandemic could be the downfall of her restaurant business. With a fail rate of 80%, many restaurants folded under pandemic pressure. Altidor knew she could not transition this wave by herself. The pandemic forced a significant shift in the restauranteur paradigm, and Altidor reached out to a coach and the expertise of mentors on Score.Org.

    Altidor firmly grasped the guidance and mentorship of her team and recalibrated her approach to serving delicious food to the masses. She wrote a cookbook, teamed up with local restaurants, and commanded a collective powerhouse in her local area.

    Related: 6 Proven Business Marketing Strategies to Grow During a Recession

    Join a community

    To be a recession-proof business, you must lock arms with individuals navigating the same space. Joining a networking community or mastermind group that is adequately moderated can groom your business’ growth. Professional communities are incubators for innovation, fresh ideas and new connections. There is an abundance of communities on LinkedIn that offer advice and networking that can change the trajectory of your business.

    Often entrepreneurs are offered the illusion that working harder will increase their returns. Yet, the truth is that working smarter and surrounding yourself with people who have traversed your journey successfully is the most ingenious way to elevate your business plan.

    Take a glance at your original business plan and make modifications. Modifying your original game plan is the only way to survive the turbulence.

    Related: 9 Smart Ways to Recession-Proof Your Business (Fast)

    Stop chasing shiny objects

    To be a victor in the recession, you must stop chasing shiny objects. Shiny object syndrome is defined as the insatiable desire to follow the newest trends in the hopes of attracting undue attention. Chasing fads and trends is only a temporary band-aid on entrepreneurs’ wounds. All businesses’ tried and true foundations are built on creating sustainable relationships that stand the test of time.

    Julie Lokun, JD

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  • With a Recession Looming and Interest Rates Rising, What’s Next for the Economy?

    With a Recession Looming and Interest Rates Rising, What’s Next for the Economy?

    Opinions expressed by Entrepreneur contributors are their own.

    The S&P 500 is down nearly 20% year-to-date, the dollar has lost lots of buying power, and the fed has made it increasingly difficult for young buyers to purchase their first home.

    With all these factors at play, it is essential to listen to economic experts like Jerome Powell. Powell spoke on interest rates again in early September. The Fed is expected to continue raising interest rates until the inflation numbers are under control. “Restoring price stability will take some time and requires using our tools forcefully to bring supply and demand into better balance,” Mr. Powell said in those remarks. “While higher interest rates, slower growth and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.”

    Dominic Blanco

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