As we go through life, we often re-evaluate and reassess our hopes and dreams. Many of us grow up and seek our fortune in the corporate environment, thinking that big companies will give us a chance for advancement and help propel us to financial and career success. We also hope that we can learn and grow and have bosses who truly care and will mentor us along the way.
Instead, after a few years, many of us understand that being a small cog in the giant corporate machine is mind-numbing. That’s when we find ourselves longing to escape the quicksand of the corporate realm and wanting to create something to call our own in the world. Sound familiar? Do you dream of starting your own business? If so, it’s important to understand the big challenges that await you. According to Saij Elle, one of the best ways to plan ahead is to recession proof your life and your business. The following are some tips to position your startup so it can weather the storm of those early days.
Make Sure You Have the Financial Reserves You Need
When you face times of massive change and business model uncertainty, you must have enough money in the bank. As a startup, you’ll need the funds to pay for fixed monthly costs, salaries and hourly wages, and ongoing inventory purchases. Having this cushion is especially important when you are still ramping up your venture’s sales.
One of the best ways to ensure you are ready financially is to take out the small business loans you need to build up your cash reserves. These loan programs also often include a range of other valuable resources and educational programs. If you are looking for the best small business loans in 2022, you can find them on FinImpact.
Be Ready to Reinvent Your Business Model
As the tidal wave of the pandemic rose globally, nearly every business in the world was tossed upon the seas. Entire industries, such as travel and hospitality, saw revenues plummet quickly, and customer counts and bookings evaporated. The big changes were especially hard on startups, which didn’t have the years of experience that can often be necessary if you want to ride out the storm.
Yet, despite the severe economic downturn, we saw success stories dotting the landscape. Startups that were willing to change their approach to the marketplace instantly found that they could actually make more money and profit by actively pursuing new opportunities in this rapidly altered world.
Maintain Lean Staffing Levels
If you find that the economic landscape has been rewritten in an instant, you are going to be faced with high salary expenses for employees on staff and a potential deep reduction in revenue.
This will put your startup in an incredible bind. Paying even a few salaries can be a nearly impossible task when the money isn’t flowing in. As an entrepreneur with a new venture, it’s possible to avoid the high, nearly fixed costs of salaries if you automate processes and/or outsource many of the key functions in your business. By creating partnerships and contracting out some of the areas like public relations, bookkeeping, human resources, and social media management, you’ll be able to limit your monthly salary liability.