The COVID pandemic ended a record 11-year bull run of the U.S. stock market. This, coupled with an oil price crash, has all the signs of an imminent global recession. Depending on who you trust with your forecasts, most experts are predicting a global contraction that can last anywhere between 6 months up to 2 years.
How are you thinking about inflation and an economic downturn as an investor?
You have to see where the opportunities are going to be and if your business can continue to keep pace with inflation. We’ve [asked] a lot of our founders, “can you endure price increases, and will the market withstand that?” You should be doing a ton of testing to figure out where that magic point is in your market. You should be going very deep on negotiating with your vendors and suppliers on almost every single domain because as things creep up by 10% or 20% or even higher, we are no longer going to be in a business where capital is free. So the benefit of having a business that is profitable, that is generating EBITA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is going to be 10 times more valuable than it was even six months ago.
When we started our company, whiteboards were really expensive — they were $500 each — so we went to the hardware store, bought six pieces of wood and whiteboard paint and we painted ourselves whiteboards. We used them for the next five years. And I remember thinking we saved $3,000 on whiteboards. I don't think anyone for the last 13 years of this bull run has thought of saving money on whiteboards. The moral is you can do a lot with less; you can do an enormous amount with creativity and it's now the time to start thinking about that.
Here are Ten ways you can recession proof your business TODAY!
Keep your head up, be aware, and DON'T freak out!
Reconsider your products and services AND be ready to pivot if needed! (a Plan B)
Increase efficiency (work smarter not harder... or both if needed!) Look at work from home options for you or employees.
Find creative ways to add value to your products and services
Do an audit of your expenses.
Consider your prices (lowering prices or even raising your prices).
Follow the four rules of CPR: assess the situation, approach with caution, call for help, and don't become part of the problem!
If you have employees, you need to do an audit.
Vendor review (consider having your family clean the office Saturday mornings.)
Find ways to expand! (if Possible) many business do through challenging times.
Use these 10 steps to recession proof your business. American history teaches us that economies go through growth and recession periods roughly every 10 years. Don't let a recession (or growth period) make or break your wealth! Build wealth on financially sound principles that are 'recession-proof'.
If you need help getting your real estate business ready for what is coming, do not hesitate to set up a quick call with us and see how you can grow through any economy.
Set up a quick consultation call Today! and let me show you how to start or improve your journey, I look forward to hearing from you!
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PS: The Sky is not the limit, is just a point of view!