Five Mistakes Small Businesses Make in a Recession

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As evidenced by recent job and stock market losses we are clearly already well into a serious recession. Perhaps you have wondered how your small business can survive the recession. Maybe you should also consider the types of mistakes that small businesses make during a recession. Let us work out some of the things that we should not do to try to cope with a slowing economy which is found during a recession.

1. Fire Your Talent

Of course, you will probably need to cut back on employees during a recession. That is just a fact of life. However, you must keep your talented, hard working people. Laying them off and allowing them to be picked up at a discount by competitors is a potentially business killing mistake.

2. Don’t Develop New Markets and Products

Too many companies stop innovating and looking for new opportunities during a recessionary period. They circle the wagons and prepare for the worst. Guess what, the worst usually shows up for a visit rather quickly. While all due caution should be used, don’t fail to use innovation to develop money making opportunities for your business that will help it grow to the next level.

3. Cut Technology Costs

While you must contain costs, don’t be penny wise and pound foolish when it comes to your technology investment. Failing computer systems will put your business at risk. Invest wisely in improving and maintaining your technological edge.

4. Fail to Take Risks

During tough financial times it is easy to take the path of risk avoidance. Don’t allow the risk adverse economic environment prevent you from taking advantage of money making opportunities that present themselves to you from time to time. Instead, evaluate the risk and take the plunge if and when it is wise for you to do so.

5. Adopt a “Cut Expenses At All Costs” Mentality

While you can cut 10% of anything in business, you don’t want to get in a mental state where only cutbacks count. This can be a sure path to disaster. It is better to adopt a policy of smart expense cutting. For example, look for used office furniture rather than new but don’t fail to get the equipment that you need to operate your business effectively.

You should always bear in mind that there are always winners and loser in every economic recession, even a particularly tough one like we are facing. Avoid these five common mistakes and you’ll be a winner when we come out of the current economic recession.

This entry was posted on Tuesday, December 5th, 2017 at 8:46 pm and is filed under Business Performance, Recession. You can follow any responses to this entry through the RSS 2.0 feed.

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