The term “recession proof” has come up a lot over the past two weeks. The first question to ask, “Are we in a recession?” The answer is emphatically “yes!” I hate to say it, but it is the truth. We are in a recession and let’s hope it doesn’t get worse. Now, that said, what does it mean to be recession proof? The simplest definition is for a business to employ a business model that is so strong that a “significant” loss in revenues will not greatly impact the way you conduct business. What is “significant?” That is different for every business. It changes by industry, changes my business model, changes by geography, etc. So how do you know if you are recession proof? If you have to ask yourself whether or not you are in a good position to take on a significant loss in revenue, chances are you are probably not prepared. But don’t fret, you are not alone and there is light at the end of the tunnel.
Here’s your first step – know your current state. This can be phrased different ways: know your numbers, review your financials, understand your bottom-line. Semantics. The directive is to know how your business is functioning today – in all areas. So, get to work and know how your business is doing today, right now.
Jeff Newkirk, Founder & CEO, PEM Consulting Group
– a management consulting firm