Recession Preparation Checklist

20 Things to Think About to Be Best Prepared to Survive and Thrive in A Downturn.

These will also make your company stronger if there’s no recession.

1) Research

Consider how past recessions affected your business. If you haven’t been through one, talk to industry mentors that have and learn from their experiences.

Don’t repeat mistakes.

Learn from the past.

2) Communicate

Proactively inform your team you are well-capitalized and have a plan to navigate a downturn. Inspire confidence that you’re prepared and even see it as a potential opportunity.

Encourage questions.

Otherwise, they’ll make up their own (negative) stories.

3) Increase Cash Reserves

Double the amount of cash that’s normally comfortable for you. If you like having 3 months of operating expenses in the bank normally, make it 6+.

Redirect profits to creating additional liquidity. This will help you weather storms and also capitalize.

4) Hire Top Talent

High quality employees are hard to get during boom times. Look for opportunities to hire great people at attainable salaries from companies less-prepared and capitalized that reduce workforces during recessions.

5) Ramp Up Marketing

This is a paradox, but the time to increase marketing is when you’re scared and economy is declining. Everyone else is slashing and this can create a “falling knife” for them.

Ramp up marketing and you’ll get outsized returns and gain market share.

6) Cut Unnecessary Expenses

Trim the fat. Print out your bank and CC statements and highlight everything you may not REALLY need and consider cutting it if it won’t affect the quality of your product/service or team.

Esp. subscriptions, travel, discretionary stuff.

7) ACQUISITIONS!

Of course I love this idea. But buy out your “chicken little” competitors when they think the sky is falling with friendly pricing and terms. People want out when the going gets tough. Make it easy for them to sell to you.

Gain ground via acquisitions!

8) Renegotiate your Lease

Landlords are often rightfully terrified they’ll lose their tenants and have long vacancies during recessions. Perfect time to see if you can get a better deal on rent and lock it in long term, and ask for additional wish-list concessions.

9) Change the “Menu”

Look hard at your product/service offerings.

Is there a way to pivot to make your offerings more attractive in a recession? Do you need to drop some SKUs or frivolous offerings and reposition as a high-value necessity?

Make your offers no-brainers.

10) Adjust Pricing

Every $1 of increase goes straight to your bottom line. Analyze how many customers you’d likely lose with an increase vs profit margin gained and see if it makes sense to raise, it usually does.

It’s harder to weather storms if you cut prices and lose margin.

11) Customer Service

People are stressed during recessions. They need love. Service usually drops everywhere as employers cut teams and morale drops.

Double down on providing awesome service and you’ll stand out and increase loyalty and make a positive impact at the same time.

12) Upsell and Cross-Sell

How can you sell more to your existing customers?

This is usually the easiest path to grow during recessions and survive and thrive. Meet more of your customers’ needs and continue to wow them and be more comprehensive in your scope of products/services.

13) Inventory Management

Inventory is cash! Cash is king in recessions.

Now’s the time to clear out dead weight and make sure you’ve got what you need and clear what you don’t. Be hyper-proactive and on top of inventory controls. Step it up here.

14) Demand Planning

If C-19 taught us anything, it’s that demand for some things goes crazy in recessions.

Anticipate how your customers will react and how can you be prepared to capitalize on sudden surges in demand or a collapse in demand?

What will the customer likely do?

15) Supplier Management

Flip side of demand planning is supply-side. Analyze your vendors. Replace ones that can’t deliver when needed. Renegotiate contracts and terms. Redundancy.

How can you become your suppliers’ favorite customer and be first in line during a demand surge?

16) Employee Compensation

Look at your employee comp with a ‘clean sheet of paper’ mindset.

Is everyone being paid properly and incentivized properly?

Now is the time to make adjustments and perhaps get a little creative on incentive-alignment around your most pressing needs.

17) Layoffs

Don’t tolerate low performers or bad cultural fits in this time.

Also if economic necessity dictates a layoff, cut once only and cut deep. Much better for morale than uncertainty of multiple rounds and the “who’s gonna be next?” thinking.

18) Capital Investments

Recessions are an awesome time to buy new vehicles, equipment, etc. and do projects to upgrade your facilities. Contractors are cheaper and more available. Dealerships are discounting. Survive and thrive!

Strike some deals and set yourself up for long term success.

19) Think “Global”

Recessions hit every country differently and at different times. Creates some huge opportunities if you look for them. Exploit currency differences, and find countries who need what you have and have what you need.

Suppliers, talent, customers, etc.

20) Get Face to Face

Step up your rhythm of 1-on-1 meetings with your teammates. Make sure they’re okay. Talk to your suppliers and customers in person.

Nothing beats direct human eye contact and empathy.

Resist urge to withdraw behind your computer and go care for your people

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