Recession Proof Small Businesses
What Does Recession Mean for Small Business?
Tips for keeping a small business afloat during poor economic conditions
During a tight economy, small businesses that were just scraping by during better times have an especially hard time staying in business. Sometimes, a simple change, such as moving to low cost promotional efforts instead of paying for expensive, but unproductive advertising campaigns, can mean the difference between success and failure during a recession.
Move Back Home
Many times, a small business owner starts out by working out of the house, the garage, or the little shed out back. As profits increase and the business expands, she or he begins searching for warehouse or office space in a commercial area instead. It makes sense that the owner of a shrinking business should consider going back home to cut overhead costs.
Take it Online
Unlike a brick and mortar shop or office, an online store doesn't have to pay the utility bills every month. There still are costs, such as hosting fees, web designer and maintenance fees and domain name fees, but they are far less than the cost of a physical building.
Cut Utilities
When families want to save money during less affluent times, they often are very careful about turning off lights that aren't in use. Small business owners should consider similar measures. Dimming the lights and closing heat or air vents in areas not accessible to the public that do not need a regulated temperature can really make a major difference in utility bills, especially in a big building that wasn't built with passive solar design in mind.
Do it Yourself
Hiring people to do things he or she doesn't like is a great feeling for a small business owner. However, during a recession, likes and dislikes become a bit less important. Cleaning the store instead of using a cleaning crew, stocking shelves and doing typing or filing are all things a small business owner may do before the business grows. While handing them off to other people frees the owner up to do more profitable things during a good economy, it actually may be more cost effective to take those tasks back on during a recession or a time of slow growth.
Barter to Keep Costs Down
If there are things that can't be done by the business owner or employees, bartering may be the way to go. Remember tax penalties, though. The government considers bartering to be taxable.
Virtual Assistants
Employees cost quite a bit of money. Salaries are only the beginning, especially if the small business owner is providing good benefits to the staff. Virtual assistants work as contractors, which means there are no extra employee-related taxes and no benefits to pay for. Clerical work, customer service concerns and other tasks that can easily be handled remotely are usually a good fit for VAs.
Of course, there are some things that should never be cut from the budget in an effort to save a business money during a recession. Quarterly tax payments, insurance and bookkeeping fees are a few of these necessary items.
