Types of business that are recession proof and how to make your business more resilient to a downturn in the economy…
If you are worried about the future of the economy and want to consider a recession-proof type of business you should seriously examine the following:
Healthcare Business - People face more stress in a recession. We all know that stress can make you ill… right?
Undertakers Business - this business actually does pretty well in a recession. Getting sacked, going bankrupt and struggling in business all lead to stress. Stress is a major killer…
Debt Collection - pretty self explanatory as when the economy is suffering more people are likely to get into debt and therefore there will be a greater demand for your services.
Car Repairs - in a recession, sales of new cars fall as people tend to keep their cars for longer. Older vehicles in the market need more maintenance to keep them on the road.
Make your business more recession proof
If you are already in business then there are some simple strategies you can use to make your business more recession-proof:
Cash is King - liquidate some assets and get rid of dead of stock. Start keeping some money aside in case the economy does indeed get worse. Invest in defensive stocks that have been known to hold their value in a recession.
Good Records - keep your business records up to date so that you always now how you are faring. The more robust your records are the easier it will be to move faster in the case of a slump.
Batten Down the Hatches - When business is slow you have more time on your hands to look at ways of cutting costs. Cut down on wastage and examine all your outgoings to remove or reduce all unnecessary expenses.
Speak to Your Lenders - this is the right time to keep communication lines open with the banks. The credit crunch is hitting them hard so it might also be a good idea to open talks with another lender just in case your bank pulls the plug.
Examine your Loans - in a recession interest rates tend to fall as the government tries harder to stimulate the economy. This is the ideal time to collate all your loans and possibly switch to longer payment terms and / or fixed rate loans.
Negotiate Harder with your Suppliers - ask for longer payment terms and demand quicker delivery times so that you do not need to have so much money tied up in stock.
Improve your Credit Control - cash flow is king in a recession so meet all your customers especially the ones that tend to pay late. Send regular reminders and statements followed by a phone call the minute an invoice is overdue.
Insure your Debt - in a recession more of your customers are likely to fail.
Increase your Marketing - you heard me right - this is the worst time to reduce your marketing budget! The aim is to keep and hopefully increase your market share and the best time to do this is in a recession.
The best way to survive a recession is through better record keeping, more planning and reacting faster to bad news.
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