In this video, I’m going to show you 4 ways to survive the a recession.
There are a lot of business owners and entrepreneurs growing increasingly nervous about the price of stocks and the global economy.
Watch and learn how to avoid making costly mistakes that could cost you your business.
Transcripts:
Chris Bounds
Bloomberg says recent economic model prediction just came out saying a recession is pretty much certain within the next 12 months. recessions are a natural part of the economic cycle. They don’t necessarily mean doom and gloom, and really some of the greatest innovations and companies have been formed during recessionary periods.
Regarding real estate, I actually believe that we’re going to see some of the greatest real estate opportunities in the next 12 months than we’ve seen in the last two to three years. Meanwhile, there are a few things you should probably do to protect your family and your business during a recession. Number one, reduce expenses when times are good, it’s very easy to justify unnecessary expenses go through all your expenses, especially the ongoing recurring expenses and prioritize them rate them as related to revenue.
Any expense that’s not directly tied to revenue should be strongly considered for elimination. Just remember the leaner you can get and operate without sacrificing revenue, the less financial risk you’re going to face whenever times get tough. Number two, reduce debt and liabilities, review all of your debt liabilities and strongly consider paying off high interest debt such as credit cards, lines of credit and bridge loans. Of course, keep in mind that by paying off that debt will increase cash flow, but it also reduces much needed cash reserves.
Which brings me to number three, increase cash reserves, cash just sitting in your bank account is not the best investment strategy. But when times are tough, you definitely want a well funded cash reserve account to make it through those times. And once the economic cycle starts to turn back around, you can actually take that extra cash and use it to reinvest and finally diversify your revenue sources. So this part may be harder to do during the recessionary period.
But ultimately, if your business is just reliant on one or two income streams, if those streams were to dry up or slow down, it’s going to put you in a pretty vulnerable situation. You do want to look for other opportunities that bring in revenue that do not require a lot of cash investment so that way with that new revenue ultimately will help stem any loss of revenue from your primary sources and you never know sometimes these new opportunities can end up being what brings your business to a whole new level whenever the economy starts to turn around. Now, this is not an exhaustive list. You may have some other suggestions let me know what you think.