8 Ways to Prepare for a Recession

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Here are some time honored tips to help you survive the recession we are now facing. I had anticipated that some of you would like to know more about this situation as soon as I could write it for you. I think you’ll find it a bold addition to my previous words on this topic.

1. Create Your Own Worst-case Scenario

Create a worst-case cash flow forecast for you personally and for your business. You should take the time to predict just how bad your cash flow would be if you lost your job and/or if your business dropped in sales by 50% or more. What actions would you take? 

2. Prepare an Emergency fund

You should be prepared by building up an emergency fund that contains sufficient money to cover at least 6 months of your expenses.

3. Move to Conservative Investments

Move your assets from risky ones to conservative ones in order to ensures that you lock the level of capital gains that you need before it is too late.

4. Improve Your Personal Worth

During a recession it is critical that you always strive to be the best either in your job or business. You must avoid becoming redundant either to your company management or to your customers. If you do not prove your worth, you will be the first to be shown to the exit door as the recession deepens.

5. Diversify Your Income

If your business only services a few major customers try to sign on many smaller accounts or several new major ones. If your income depends on a few big accounts you will be at a great risk during the recession.

6. Manage Your Funding Sources

Another excellent way to prepare yourself for an economic slowdown is to manage the sources of your funding properly. As credit tightens this is usually done selectively and subjectively, particularly on the local level. Make sure that you have a good working relationship with those who you borrow money from.

7. Learn to Live on Less

You will probably see cuts in your business income or paycheck as the economic recession progresses. Defend against this by looking for ways to trim your budget as much as possible right now.

8. Cash is King

Cash is king during an economic recession like we are now facing. Having cash on hand will offer your more opportunities as those who are less prepared sell off valuable assets during a recession.

This entry was posted on Sunday, November 26th, 2017 at 9:01 pm and is filed under Recession. You can follow any responses to this entry through the RSS 2.0 feed.

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