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Precautions Your Business Needs To Take To Protect Itself In A Recession

Running a business during a recession can be scary, as no one knows what’s going to happen next and both people and businesses have less disposable income, which means both B2B and B2C businesses suffer. However, you don’t just need to sit back and wait for the worst to happen (if it does) as there are things you can do to help you protect your business in a recession. From getting the right types of insurance, including credit insurance, to keeping your customers loyal and focusing on maintaining the quality of the product or service that you offer, we’ve got you covered.

Get The Right Insurance

Having the right insurance for your business is always important, but it’s even more so the case throughout a recession where there are increased risks to your business. Whilst good insurance is a cost for a business, it could one day be what your business needs to stay afloat. A good example is export credit insurance, which can help you to expand safely as if the creditor doesn’t pay up for what they owe, the insurance company will. It’s best to work with an insurance broker specific to your industry to make sure that you’re able to access the best possible cover at the best price. Working with a broker does not involve the cost being passed onto you, as usually insurance companies will pay the broker. So, find yourself a reliable insurance broker and get the right cover for your business.

Don’t Neglect Customer Retention

It’s also vital that you don’t neglect customer retention. Whilst you may want to expand your business and look for new customers, usually it’s existing customers that are the bread and butter of your business and provide consistency. Whether you’re a service based business and you’re wanting to retain existing clients, or you sell products and want to keep people coming back, you should make sure that a big part of your business strategy is encouraging brand loyalty from existing customers and not just pushing expansion.

Cut Costs Not Quality

In a recession it can be so tempting to simply cut costs by reducing staff, reducing the quality of ingredients or using cheaper softwares, but if at any point this comes at a cost of the quality you offer, you need to seriously rethink. Whilst you may save some money short term by cutting costs, it could be detrimental to the reputation of your business long term, so you need to be very strategic with what you’re cutting back on. Cost cutting without impacting quality is possible, but you do need to be careful. It may be worth working with a consultant depending on the size of your business to make sure that you get this right the first time around. Or, even starting by getting some good budgeting software can make a big difference and realising where you’re overspending and don’t need to be to save money.