How to Prepare Your Service-Based Business for a Recession

Recessions are a part of the economic cycle, which means they’re inevitable. Fortunately, they typically last only 11 to 12 months. However, a recession can cause significant harm to a business that is unprepared for one. As the economy contracts, unemployment rates increase, profit margins weaken, and credit is harder to get. Service-based companies feel the effects of a recession through their client base. These businesses typically experience a delay in payment from clients, fewer new clients requesting their services, and fewer long-term clients renewing their contracts.

With these effects in mind, it’s imperative that you prepare your business for the inevitable by taking steps to ensure your company remains financially stable. Listed below are a few steps you can take to ensure your business is adequately prepared for a recession.

Following the steps listed here is a great way to increase your chances of surviving a recession. With that said, it’s also crucial you recognize that recessions are regular occurrences. Doing so will encourage you to continue employing practices that will ensure the financial health of your business for years to come.

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At Summit CPA we offer multiple resources to assist and help your business grow. If you’re ready to get an edge on your competitors? Contact our office at (866) 497-9761to schedule an appointment with our advisors.

 

How to Prepare Your Service-Based Business for a Recession