1. Know What Makes Your Business Essential
Businesses that tend to fare better in recessions offer goods or services people can’t do without; a few examples are healthcare, home repairs, or financial services. But even if you’re not in a ”recession-proof” industry, you can still make yourself essential by solving a consistent need and staying focused on what your customers value most.
”The key is relevance,” Matt says. ”Ask yourself: if my customers have to cut back, will they cut me out or consider me worth keeping?”
What are Recession-Proof Businesses?
While no business is completely immune to economic shifts, certain industries historically perform better during downturns. These include:
- Healthcare and elder care services
- Auto repair and maintenance
- Grocery and convenience stores
- Childcare services
- Home repair and plumbing
- Cleaning services (residential and commercial)
- IT support and cybersecurity
- Funeral services
- Accounting and tax prep services
- Pet care and veterinary clinics
If your business isn’t in one of these categories, don’t panic. Your customers will likely make room in their budget for you if you are delivering something valuable that they consider a priority or essential for them, even if it’s not a necessity for other people. This is important to remember as it may become increasingly crucial for you to lean into what really makes your business special and separates you from your competitors.
2. Start Talking to Your Banker Before You Need Capital
Too often, business owners only reach out for financing when cash flow is already tight. That’s backwards, Matt says. ”Your banker should be one of your most trusted partners. You don’t want to start building that relationship in the middle of a crisis,” he explains. ”Talk to us now, before you need capital. We can walk you through options like SBA loans, working capital lines of credit, or even just good practices for managing cash more effectively.”
Your banker can help you walk through different ’what if’ scenarios – what happens to your margins if your revenue drops to 10%? What if expenses go up by 15%? Plotting these scenarios out ahead of time and having a proactive plan in place can help build confidence and make you feel more resilient to face market fluctuations.
3. Make Smart Cuts Without Sacrificing Growth
If your instinct is to slash spending at the first sign of trouble, pause and think very carefully. Some cuts may make sense, like renegotiating vendor contracts or reducing non-essential expenses, but don’t pull back on everything.
”Often, the smartest businesses don’t necessarily cut more, they cut smarter,” Matt says. ”For example, investing in marketing initiatives might still be the right move if it keeps your customer base engaged. Same with training your employees to take on multiple roles. It’s about maximizing every dollar. Keep in mind that in most cases, you have to spend money to make money.”
Rather than cutting employee hours or marketing spend at the first sign of trouble, perform a quarterly cost audit to identify line items that may be draining your budget without you even knowing. Invite your team to contribute ideas; being on the front line, they often know where time or money is being wasted.
4. Keep Your Marketing Nimble
In uncertain times, your message – and where you deliver it – matters more than ever. Focus on marketing tactics that are low-cost and high impact: email campaigns, local SEO, social media engagement, and community involvement.
”Small businesses don’t need huge budgets to make a big impact,” Matt shares. ”But they do need clear, specific goals. Know what you’re trying to achieve with each effort before you start identifying tactics. Are you retaining customers? Building brand awareness? Launching a new product or service? That focus makes all the difference.”
Especially in times like this, people want to do business with brands they trust. That’s a huge advantage for local small businesses; you’ve built relationships and trust that big corporations simply can’t replicate. Now is the time to use this to your advantage and lean into the human side of your brand. Share customer stories, show up in your community, and really dial up the personalized service your customers have come to love you for. Send handwritten thank-you notes, launch a loyalty program, and engage with your customer base consistently through social media or email so you can stay top of mind.
5. Look for Quick Tech Wins
Technology doesn’t have to be expensive or complicated. Tools like automated invoicing, mobile payment options, or remote deposit tools can make a big difference in streamlining operations without a hefty price tag or timely onboarding process.
”We help a lot of small business owners set up quick wins,” Matt says. ”Tools like ACH payments, Merchant Services, or Treasury Navigator might not seem flashy, but they save time, reduce errors, and improve cash flow.”
Your banker can help ensure you’ve got the right tools for successful day-to-day operations.
6. Lean Into Your People
Recessions test teams, but they can also strengthen them. ”Your people will make or break your business in a downturn. Invest in them, even when it’s tough,” Matt advises.
Empowering your team goes beyond proper training and education; it’s about creating an environment where people feel seen, valued, and committed to the business’s mission. During slow periods, offer opportunities to deepen their skills, cross-train staff to learn multiple roles within the business, or bring them into planning sessions.
Transparency breeds loyalty; if your business is entering a tighter season, let your team know what you’re doing to protect jobs and keep the lights on.
