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Recession-Proof Your Business Now!

It has already been a solid decade since any of us saw or felt the worst effects of the last major economic recession. In historical terms, that means that another downturn may be just around the corner. No one knows exactly when or how the next business cycle bottom will start, though. That’s why it’s important to recession-proof your business now, while you still have both time and wiggle room. After a surprise stock market rout, there may be no more space to maneuver!

Recession-Proof Your Expectations

During a recession, money will dry up. It will be much harder to secure any kind of loan from a bank or other investors. So don’t expect to get any easy help in a pinch.

For related reasons, your sales will drop. All of your customers and clients are going to be working in the same environment you are, and they, too, will have no cash to spare. Luxuries, especially, will become unpopular.

It’s hard to recession-proof your business after a recession starts because everyone you work with, from suppliers to customers, will be dealing with the same tight conditions. People you depend on now may not be there for you in those days, so plan for that now.

Diversify in Every Direction

There’s a great and highly applicable survivalist maxim that is always worth remembering, even if you’re not stockpiling ammo and spam in a bunker with a biohazard filter:

“Two is one, and one is none.”

What that means is that if you rely on one tool or have just enough supplies on hand, you’ll be in a load of trouble if that tool breaks or the supplies are damaged or run out. Redundancy is insurance. Always have a backup in case your most crucial lifeline gets cut! Be smart about it, though.

Here’s where a lot of people go wrong. Sometimes something will work perfectly at home (or on the internet) but not in the field, even though there’s nothing actually wrong with it. What good does it do to have two of them then? Your spare shouldn’t be a duplicate if at all possible.”


With that in mind, there are three types of business backups you have to have ready to go in the event of a dangerous recession.

1: Develop Recession-Proof Alternate Revenue Streams

This is smart to do whether you’re planning for economic Armageddon or not. Seeking out many different entrepreneurial opportunities will both grow and stabilize your income, since not every industry responds to recession conditions in the same ways at the same time.

You might be most comfortable sticking to industries complementary to the one you already inhabit, but as you get further outside your comfort zone, the possible rewards can get a lot better.

2: Build Your Networks, and Never Stop Marketing

Keep reaching out to more and more people who can help you, and who you can help. The bigger your network, the more opportunities you have to get a brilliant new idea and pivot to save your business. This also applies to learning about backup suppliers and distributors. You need to have people you can call if another business you rely on for yours to function goes belly-up.

Likewise, you should always keep building your brand. Even during a serious downturn, you need to market your solutions so people know that the value you offer is worth spending on, even when it’s hard. Remember that you can get a huge ROI by using low-cost marketing tools like blogs and social media. Enlist your customers to help share and promote your content!

3: Grow Your Customer Base, All The Time

Again, “two is one, and one is none.” When it comes to customers, you need a lot more than two. And customers come and go! You always, always, always have to find more! When a recession hits, you will lose some. The fewer you have, the harder the impact. If most of your revenue comes from just a few big accounts, losing one can cripple you.

You’ve got to imagine and analyze the effects of losing both of your two biggest customers. Will that effectively sink your ship, or would it only be a dent you can hammer out, since you have so many others? Plan accordingly, and go after every lead you get!

Budget For Rainy Days, and Recession-Proof Your Financing

Once you have stronger and backup revenue streams in place, you can work on building up a rainy-day fund. Reinvestment helps you scale crazy fast like Amazon, and dividends are also lots of fun for everybody, but it’s wisest to also put some cash away for a day when everything just goes wrong.

If your business is strong enough to build up a fund like that, you can also lock in some recession-proof financing terms with your favorite creditors. After a recession starts, it will be almost impossible to get a new deal that’s really favorable to you. Get a good line of credit now. Use it wisely while you build up your credit rating, and when times are tough, the banks will know that they can trust you.

Build The Right Team Right Now

Finally, do all you can to avoid having to resort to layoffs during hard times. Focus on finding people who are a good fit for your company’s culture, and treat them like family. Only hire when you’re sure that the candidate can provide value no matter what’s going on outside.

For all other needs, it’s smartest to rely on contractors and freelance workers. The flexibility they provide makes it much easier to scale up and down when you need to.

This is also where MadCap Ventures comes in. Our experienced marketing and business development team knows how to prepare you to succeed in any circumstances you might face. We serve you the way you need it, without ever holding you down.

MadCap makes it much easier for market-viable niche products and services to get that extra push that helps them take flight. We work closely with multiple universities and business incubators to make it happen. Contact us for more information about how we can accelerate your growth, even during difficult times.

Get ready for what’s next. It might be exciting, or it may be dangerous. But it will definitely be an opportunity for you to succeed!

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