How to Recession-Proof Your Business

Reading Time: 3 minutes

You’ve probably heard rumblings and noticed headlines warning of a possible recession. While no one person or analyst can predict our economic future definitively, business owners across the U.S. are wondering if there are steps they should be taking now in case there is a recession on the horizon.

Below are some tips to recession-proof your business. These are actions you can take now, down the road, or even when business is at an all-time high.

Ask Your Accountant for a Financial Report

The first step in making any financial changes to your business is getting an understanding of the full scope of what’s happening. This means understanding…

  • How your income is being generated
  • Revenue and expenses for each of your products and services
  • Payroll costs
  • Expenses
  • Whether there is a seasonal flow to your income

Having a base knowledge of how money is flowing through your business is critical no matter what’s happening with the economy. But, if you are worried about a recession, this report will make the next steps so much easier.

Schedule a Meeting with Your Accountant

Looping your accountant in early means you can take a look at your business together and come up with a plan before any potential downturn happens. In this meeting, you’ll want to be frank about your concerns and work with your accountant to determine what will be the best way to recession-proof your business, and identify next steps. Because every business has a different combination of structures, products, staff, and business plans, it’s important to get qualified advice from someone who knows the ins and outs of your business.

If you’re not already working with an accountant, consider setting up a consultation and investing in an analysis and forecast.

Have Your Accountant Put Together a Forecast

A forecast analyzes your financial flow and works to protect the future. Forecasting in the face of a potential recession also means coming up with the potential effects of that and how you as a business owner can work around that.

When putting together a forecast, your accountant will analyze historical data and your business’ financial path to estimate for future costs. Forecasting can help your company determine where to allocate resources, staff, and money, and how that will impact revenue.

A financial forecast can be short-term or long-term, and updated periodically. This can help inform your budget.

Update Your Budget

With your forecast built, it’s time to update your budget. While your budget estimates costs, expenses, revenues, it also outlines expected cashflow, debt reduction, and growth.

During budgeting, you can also determine what your minimum income required to cover operating costs, and set some flag points (meaning, when your income drops to a certain level, this indicates a change needs to be made or a new plan must be implemented).

Your accountant can be a great resource for advice on this point. A good budget with longterm stability and business longevity in mind can help you through rough patches and low points, and lower your stress level.

Consider Diversifying, or Reallocating Your Efforts

Part of recession-proofing is diversifying your income streams. This can include services, products, investments, and shifting how you allocate staff, money, and time.

Diversifying can involve offering new services and products, looking into options that are less volatile and require little overhead, and identifying passive income streams.

Reallocating can be anything from shifting costs and expenses to dedicating more of your team to a primary product or service.

If it makes sense for your business, diversifying your revenue streams can ensure you have more ways to generate income when and if things get tough.

Plan for the Future Regularly. Not Just in the Face of a Potential Recession

The best way to protect yourself from economic dips and valleys it to plan for the future regularly, not just in the face of a potential recession.

Business owners who maintain and update a business plan, forecast, and budget typically have a broader understanding of how they are generating revenue, know their business’ weak points (and work to improve them), and create safety nets to ensure they can continue to operate through difficult times. Planning ahead and building strategies that can be implemented when times get tough can be a huge stress reducer for business owners.

Whether you update your forecast and budget yearly, every six months, or quarterly, it’s important to operate with a wide lens view of your business, and understand that peaks and valleys are normal.

Do The Best That You Can

It might sound simple and silly, but in the face of a recession business owners only have so much influence over customer and client habits. No amount of hard work and planning can guarantee that you won’t be affected by a recession, but it can keep your business afloat longer and offer stability in an uncertain time.

Facebook
Twitter
LinkedIn
Sign Up For Our Weekly Newsletter
*Email
AKIF CPA
5.0
Based on 107 reviews
powered by Google
Annie Phillips
Annie Phillips
12:35 10 Oct 21
Turn around time was amazing on the project I needed done. When you don’t understand all the different forms... communication is key and you will get that here. They are there to explain what and why you need it.read more
Meru Kapadia
Meru Kapadia
23:33 01 Oct 21
I usually don't write reviews much as everyone has different experiences, but definitely wanted to share the positive... experience I have had here and why I would recommend them to all my family, friends and co-workers.I got a referral for here from a friend, so thought of giving them a try over my old CPA firm. I have been going here for a couple years now and have to say they are top notch. They are always responsive and willing to work with me even when I am delayed. I generally like to ask a lot of questions and not once did I feel like they were annoyed by it and would very thoroughly and positively answer all my concerns with detail explanations. Even during the pandemic, they worked with me 100% virtual and it was seamless. Overall, I am very happy with this firm and will continue with them for the foreseeable future.read more
Kevan Shah
Kevan Shah
21:45 01 Oct 21
I’ve been going to them for 3 years now for multiple of my businesses. I changed to them after I had problems with my... previous CPA firm and I’m so glad I did! Best decision I ever made for my businesses. They have saved me thousands of dollars over the years as well as deal with my immensely complicated tax filling issues. No matter when I call, they always help answer all my questions (and trust me I have a lot) and put my mind at ease on all my concerns. I feel as if I am family the way they take care of me. The quality of their work has not changed; very consistent and professional. It is an understatement when I say I highly recommend them.read more
Maunil Shah
Maunil Shah
16:19 01 Oct 21
AKIF CPA is the best place for your tax needs! Saim has been easily available for my all my questions and concerns. ... Couldn’t ask for a better firm that provides excellent service and a familiarity with their clients. I always recommend family and friends to AKIF CPA!!read more
Shah Hussain
Shah Hussain
03:58 01 Oct 21
Hello AKIF CPA,I wanted to share my experience with you, your team and whomever may be reading this message. My most... humble thanks to you and your team for a being such great part of my success.You have done a fabulous job for us this year, and since you took over our books (during our most devastating times) you have literally taken weight off of our shoulders.Thanks for bringing everything up to date and also providing us with numbers or as you call it consultations, ahead of time so we could seal the holes.Great work!!!Shah H.read more
Sumit Dalwadi
Sumit Dalwadi
04:57 30 Sep 21
The professionals at Akif have been absolutely amazing! Quick to answer all the questions I had and always available... to offer their guidance.read more
Calvin R
Calvin R
20:21 29 Sep 21
I recommend these guys! I will be going back next year. They made everything simple and we understood what was... happening. There we issues with our taxes due to our previous accountant and these guys fixed everything. They answered our questions and service was always with a smile.read more
Ammoria Daniels
Ammoria Daniels
02:11 16 Sep 21
We contacted Akif with an urgent matter regarding corporate taxes. Akif immediately understood what was needed and... within days had everything ready to sign. The level of service we received was amazing and unmatched. Waqar expertise in trucking industry made our situation seamless. His communication was outstanding; I heard from him daily and could have been completed sooner if I was as fast as he was 😃 Highly recommended!read more
Joe Paneitz
Joe Paneitz
18:30 18 Aug 21
What an absolute pleasure to work with this CPA firm. My business is already seeing such a positive impact and growth.... I cannot believe I didn't connect with them sooner. This firm is helping in so many ways! 5 stars is an understatement! Thank you so much for your help AKIF CPAread more
Helptest ARCpoint Labs
Helptest ARCpoint Labs
15:02 18 Aug 21
The firm is quick, responsive, and has the latest technological software. Thus far, I have been with them for 3+ years... and will continue to work with them even after relocating. They make it easy even when I'm miles away. Would highly recommend them.read more
Luz Tipaz
Luz Tipaz
16:06 13 Jul 21
Saim and his team are the best CPAs in town. I have been their client for years. All started when I needed help with... company structure with multiple companies and then accounting and Taxes. I have been very happy ever since. Thank you AKIF CPA.read more
Maria perez
Maria perez
18:31 08 Jun 21
Me and my husband have been getting all of our personal Taxes, business Taxes, monthly bookkeeping, accounting and... payroll done with AKIF CPA. Recently, we had more stuff come up and had detailed analysis done on capital gains, single family rentals (SFR) and business disposition. You will only know how great this CPA company is until you have worked with them and given them a chance. Words can’t describe our experience. AKIF CPA gets the job done every time - very reliable, professional and affordable.read more
Afnaan Amin
Afnaan Amin
22:14 02 Jun 21
Very good experience, we had unique situation in regards to cross border income as Canadians currently residing in the... US. Income on both sides of the border through completely different channels. Everything was very easy and completed timely, I also had lots of random questions and Mohammad provided top notch service along the way and even after we finished our taxes!! Highly recommended.read more
Ryan Paton
Ryan Paton
10:56 08 May 21
I moved to the USA from Canada late 2018 as part of a promotion/relocation for work. For my 2019 returns, I used an... accounting firm recommended by the local Canadian social club in my city, which was a terrible experience. They were slow to respond to inquiries and would follow up in piecemeal requests which dragged out my return process over several months, often asking for information I had already provided.For the price I paid, I vowed to find better service. I found Mohammad online and decided to reach out. Mohammad was extremely responsive, took care of my US and Canadian returns as well as my wife's business returns in a timely manner. Overall, it was a very positive experience and I would recommend him to another in my situation.read more
Tuan Vo
Tuan Vo
01:59 20 Apr 21
I relocated to Texas from Alberta, Canada and needed a CPA to help me with my cross-border taxes as I was not happy... with the CPA that I used previously. During my interviewing process to find another CPA, I had good feedback from Mohammad as he was able to answer my questions regarding my unique tax situation with expertise, and importantly to me, in a timely manner. I decided to use his services for the current tax year and I have nothing but compliments for the work Mohammad provided. If you are in need of a professional cross-border CPA, I highly recommend reaching out to Mohammad Akif.read more
See All Reviews
js_loader
Archives

Crypto Tax & Accounting Newsletter Signup

*Email

Cross-Border Tax Newsletter Signup

*Email