Whether there is a recession or not, a business of any type should have a plan for the steps they will take to compensate for such an economic downturn. Laying off personnel should only be considered as a final option. Recruiting and hiring new people can offer fresh ideas, but always keep in mind the initial money and resources that will need to be dedicated to their development before profits can dramatically increase.
Here are some suggestions to recession proof your business:
- Make a graphic organizational chart of your business. This document determines who is responsible for what, and to whom they answer. If used properly, it makes the business efficient, prevents jealousy, dissension and double work.
- Make clearly defined manuals of business rules, policies, and duties of each job. Every leader and subordinate should have access to these. Top management must spend their time in long-term planning and focusing on company direction. Using manuals allows you to make note of repetitive problems and apply your attention where it is needed. Subordinates should make decisions in line with company ethics and needs. Overall it leaves more time for employees to discuss matters that improve the business.
- Develop a modern cost system like a prepaid credit card that continually assesses the cost of doing business. Most businesses find it difficult to stay on top of money and resource usage. These cards can highlight ways to decrease expenditures and increase profits. This ensures that capital is available to pay bonus rates to exceptional employees which will inspire productivity.
- Determine what is a reasonable expectation for profit and loss in every area of the business. This is the starting point for budget management. This allows for risk taking and effective strategy making for the future.