By Thad Plumley
It has been impossible to avoid the economic forecasters whispering the R word on business television the last several months. “A recession is coming in 2020 and here’s why…” they have taken turns saying.
One half of the economists surveyed by the National Association of Business Economics last year said a recession would happen early this year, while two-thirds said it will take place before we wrap up the 2020 calendar.
Well, 2020 is here. Now what?
Begin planning for it and don’t wait for it. If you make adjustments and are ready for a recession, you’ll most likely be ready to ride it out if it indeed happens. And if the experts are wrong as they have been known to be on occasion? You’re OK there too; there’s no fault in being a nimble business ready to shift when a critical change occurs.
Most of you have seen the talking heads on television. Another survey last year, one of small business owners by BlueVine, showed 80% of you worry about a possible recession taking place.
The survey numbers that startle me, though? Forty-four percent (44%) of the business owners admitted to taking no measures to prepare for a recession and another 36% went as far as to say they are not planning on making any preparations in the next 12 to 24 months.
“It’s worked this far for us” is not a mission statement. It’s a death wish, and one probably uttered by more than a few owners of the 1.8 million small businesses that closed between December 2008 and December 2010.
So, get recession ready. It can be done in a few steps.
Have flexible capital on hand that can cover those slow periods that come with economic downturns. Savvy business owners apply and secure financing even when not immediately needed.
Consider diversifying your offerings. Finding new revenue streams is great advice anytime, but it can really aid a company when the main task of the business slows.
This is exactly why maintenance agreements should be offered by every water well contracting firm around. Are new well installations slow? Annual water testing, rehabilitation work, and repairs can be done on the systems of customers locked in on their agreements—which come with an annual fee to boot.
Finally, keep your eye on your long-term partners. If you have a supplier or manufacturer you have worked with for years or perhaps a local firm you subcontract for on occasions, make sure they are handling the recession too. If you have contracts with any of them, review them. You don’t want a stumble in their business to cause you to fall down.
Be prepared. Making a few small adjustments now can make a big difference for your business regardless of what the talking heads are saying.
Thad Plumley is the editor of WWJ and director of information products at the National Ground Water Association. He can be reached at firstname.lastname@example.org, or (614) 898-7791, ext. 1594.