According to the National Bureau of Economic Research, a recession is a significant decline in economic activity that spreads throughout the economy and lasts longer than a few months. Recessions are normal parts of business cycles. While they may be alarming, periods of recession can be weathered by many businesses if they prepare in advance. Take a look at these tips and resources to help you do just that.

Go Digital with Adobe Acrobat Tools

Recession-proofing a small business by going completely digital with the help of Adobe Acrobat tools and PDFs offers several compelling advantages. First, it enhances cost-efficiency by eliminating the need for physical documents, printing, and storage expenses. This digital transformation streamlines workflows and reduces administrative overhead, allowing the business to allocate resources more effectively.

Second, in times of economic uncertainty, remote work capabilities become essential. Adobe Acrobat facilitates remote collaboration and document sharing, enabling the business to operate seamlessly even when employees are working from home or in geographically-dispersed locations. This flexibility ensures business continuity and resilience during economic downturns.

Furthermore, Adobe Acrobat's security features, like encryption and digital signatures, safeguard sensitive business information, instilling trust in customers and partners. This can be a critical factor in maintaining customer relationships and attracting new clients during challenging economic times.

Plan Ahead

It’s important to create a business plan and business emergency fund before a recession hits. Paying down debt as much as possible is also important. Not only will reducing debt help to also reduce your monthly expenses, it will make it easier to get a small business loan if things get especially lean.  Work with your accountant and managing team to create an action plan for what you’ll do when, not if, business slows down. That includes taking advantage of any available tax deductions.

If you are relatively certain a recession is imminent, it’s a good idea to find ways to cut back on the company’s expenses by reducing overhead, downsizing your inventory, and possibly dropping products or services that aren’t being sought by clients. Invest strategically in things you can use throughout the recession, like high-quality video content.

You may want to keep cash reserves on hand. It’s always good business practice to stay within your operating budget, and this becomes even more important in a recession. Pay attention to what your customers and employees are saying about the business as well as general economic forecasts.

What to Do During the Recession

Once a recession is underway, it’s important that you offer your most valued employees competitive pay, benefits, and adequate working hours whenever possible. After all, you want to retain your best workers. Delay laying off workers as long as possible — it can be quite difficult to replace skilled and experienced staff later when business picks back up. 

Having multiple revenue streams is healthy, so it’s smart to diversify what your company offers. If some products or services no longer sell well, it’s time to acknowledge that and discontinue them, at least temporarily. 

While you may scale back efforts to find new clients, make sure you continue to foster strong relationships with current customers. It’s always a good idea to prioritize customer service because people won’t return if they aren’t treated well. It may be worth it to change your invoicing system so that you get paid more quickly, possibly at the time of each transaction.

Re-Evaluate Your Business Structure

The way you set your business up originally may have been just fine at that time, but it might need to be reconsidered in an economic downturn. If your business currently operates as a sole proprietorship, you might want to think about the advantages of becoming a limited liability corporation, or LLC. This entity provides increased flexibility, less paperwork, and some tax advantages, as well as protection for you and your assets. 

Set Your Business Up to Survive

While no business owner enjoys a recession, there are ways to make the best of it and help your company to survive. By planning ahead, you can make sure you have adequate cash reserves on hand, some if/then strategies in place, and some ways to get through the tough times. Remembering that recessions come and go — and you’ll no doubt live through several of them — can help you stay calm and focused and make the best choices for yourself and your company.