No business owner likes to hear the “r” word, but economists are talking more and more about a recession. Some say we’re already in one, while others say a true recession is still months away. Most experts believe an economic downturn in some capacity is inevitable.

As a business owner or entrepreneur, you can take steps now to recession-proof your business. The key is to throw away rules from previous years’ playbooks, according to Bryan Smith, a CPA and the managing director, planning and analysis at Insperity. This is because we’re living in truly unique times considering a massive talent shortage, heightened turnover, wage growth and the rise of hybrid and virtual work.

In this issue of Promotional Consultant Today, we highlight Smith’s top tips for weathering any kind of economic turbulence.

Take a look at your finances. Smith says that the amount of cash your business has on hand is always important, but even more so in a downturn. Consider how much surplus you have and what kind of security it can provide you. For example, do you have enough for six months, a year or longer? He recommends that if you need to increase your credit limits to do so now rather than waiting. Another good tip for weathering downturns is to categorize expenses into buckets and prioritize expenses for potential reductions.

Keep your team engaged and motivated. Your employees aren’t immune to the stress of a tough economy. They may be worried about what a downturn could mean for their jobs. As your business adapts to an economic slowdown, Smith recommends remembering the impact these changes can have on employees, including their productivity, morale, mindset and engagement. He says it’s critical to always communicate openly, honestly and regularly with your team.

Aim to preserve workplace culture and values. In a shaky business landscape, leaders should always make sure they do what they say they will do. Employees are watching to make sure their previous words align with their actions when things get tough, Smith says. He recommends considering the cultural aspects of any business decision impacting your team, especially cutbacks due to financial limitations. Think about the unintentional message these decisions may send.

Focus on employees. Unless you’re a one-person show, you need your team to keep your business running smoothly. In a tough economy, it’s more important than ever to empower your team members with more autonomy and flexibility. Foster connection and belonging through this shared experience, Smith says, and remind employees of how they make an impact and why they are valued. You can also encourage frontline managers to spend more time engaging with their teams. Smith says that regular manager-employee engagement is essential to maintaining culture.

Business owners have made it through economic downturns in the past and they can do it again. By following the precautionary measures above, you can help your company withstand the storm.

Compiled by Audrey Sellers

Source: Bryan Smith serves as managing director, planning and analysis at Insperity. He holds more than 25 years of experience as a certified public accountant.