Recessions & What Business Owners Can do to Prepare
Recessions hit all business owners a little differently.
Some businesses are recession-proof by nature.
For businesses like NEST Financial, when recessions come and layoffs are high, more people turn to us for help, advice, and direction.
But for businesses more dependent on consumer demand, recessions can be tough.
With job security wavering, unemployment rising, and consumer dollars stretched thin, spending tightens — and the dominoes start to fall.
For Austin business owners, here are some strategic ways to survive and thrive through a recession:
1. Get a Bookkeeper and Monitor Your Cash Flow
You need a good bookkeeper. No exceptions.
Running accurate cash flow projections monthly or quarterly gives you an honest view of income vs. expenses.
This way, if you spot a problem, you can:
Cut spending
Renegotiate vendor agreements
Explore credit options
Cash flow is the heartbeat of your business. Ignore it at your peril.
2. Secure Cash and Credit Now
Just like in personal finance, cash is king.
You want at least six months’ worth of business expenses saved — or at least have access to that amount via a line of credit.
Pro tip: Secure credit lines before you need them.
During a recession (which can last 18 months on average), cash flow slows. Credit can bridge the gap.
3. Tighten Your Belt Early
Don't wait until it’s too late.
Cut unnecessary expenses as soon as you sense an economic slowdown.
Small reductions add up fast and help you weather slower months without crisis decisions.
4. Run Lean
Unfortunately, layoffs can become necessary.
It’s painful — but overstaffing during low revenue periods can sink the entire ship.
Layoffs should reflect true demand.
Stay lean and agile, and keep the business alive for the employees who depend on you long-term.
5. Keep Marketing
It’s tempting to slash marketing during downturns. Don’t.
Visibility is key — when competitors pull back, you can dominate mindshare.
Invest smartly in:
Updating your website
Creating valuable content
Staying active on social media
Retargeting ads and nurturing leads
Out of sight = out of mind. Don't let that happen to your business.
6. Strengthen Customer Relationships
New customers cost a fortune compared to keeping loyal ones.
Focus on:
Excellent service
Loyalty rewards
Adapting products to meet customers' changing needs
Existing customers will anchor you through tough times.
7. Stick to Your Strengths (But Stay Flexible)
A recession isn’t the time for risky pivots.
Instead, lean into what you do best. Perfect it. Elevate it.
After long recessions, markets change — be ready to adapt intelligently, not reactively.
8. Don’t Wait for an Official Recession Call
Recession declarations always come months too late.
By then, the damage is done.
Signs you should already be acting:
Inflation at 40-year highs
Stock market drops 20–30%
Consumer spending slows
Start preparing today. Not tomorrow.
Let’s Talk
If you’re an Austin-area business owner and want expert guidance through the coming economic turbulence, schedule a no-obligation call with us.
We’ve helped businesses weather multiple downturns over nearly 30 years, and we’re ready to help you thrive.
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DISCLAIMER:
We are legally obligated to remind you that the information and opinions shared in this article are for educational purposes only and are not financial planning or investment advice.
For guidance tailored to your specific goals, please contact info@nestfinancial.net.