The pandemic taught us many hard lessons, but now isn’t the time to forget any of them. If anything, it’s time for more reinvention.
During the last couple of years, I’ve seen entrepreneurs rise to the challenge of the times. It was difficult, and many got through using innovation.
Whether it was new products, new services, or new business practices, improvisation was the order of the day. Many renovated their spaces, expanded the product lines, or changed their delivery processes to accommodate a new type of consumer.
But the last two years were different from the rough times ahead because of one big factor. We had help.
Whether it was the PPP Loans, EIDL Loans, Employee Retention Credits, or other grants, there were billions of dollars available. The upcoming problem is that recessionary periods don’t normally come with help.
If they do start passing out money again, it will be the first time that it’s happened in my work-life. Given the new administration, it’s possible, but highly unlikely given the deficits we’re currently experiencing.
Let’s also remember that acquiring financing during a recession is almost impossible. Banks hold onto every dollar they can to maintain their solvency. Without it, the FDIC will come in and sell their bank to someone else.
If you’re lucky enough to trip over some available financing, you’re going to pay for it. During the ’78 – ’81 recession, banks were regularly doing business lending at 17% – 19%.
Let me leave you with this.
What I’m saying is that now is the time for some old-fashioned innovation. It may be the only thing that gets you through the next couple of years.
If you have a common input for your business, buy plenty of it when prices are low. As long as it will last, this will provide a competitive advantage.
Holding onto your key employees is critical. Maintaining your quality and customer service in difficult times is crucial.
Trim The Fat
If you have any expenses that can be trimmed, do it now. In tough economies, small and medium-sized businesses must do more with less. If you can cut the hours that your business is open or reduce staffing costs, get it done.
Raise Your Prices
You have to stay ahead of inflation. If you don’t, you’ll never stay open. This makes your accounting more important than usual. You need to know exactly where your expenses are, given the fact that they will change.
Cut Or Decrease Unprofitable Products And Services
We all have items that provide less profit than others. Cutting or decreasing your exposure to these, may make the difference.
These recessions aren’t a good time on a Saturday night. Getting through them is what it’s all about.
But no matter what happens, you can always count on us. Remember that you aren’t in this mess alone.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, M&A Due Diligence, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Accounting Solutions Ltd.
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.