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5 Ways To Help Your Business Survive Tough Economic Times

Dec 05, 2023
Posted by: Stearns Bank
Entrepreneur standing in her business

The economy is unpredictable, and small businesses need to be ready for anything. Recessions can have a devastating impact on small businesses, especially if they don’t have a plan to cope with them. 

According to a survey by Nationwide, 70% of small businesses anticipate a recession in 2023, but only 37% feel ready for it. This means that many small businesses are vulnerable to the effects of an economic downturn and need to take proactive steps to prepare for it.

How can you make your business recession-ready? By having a smart plan, loyal customers, and a reliable financial partner like Stearns Bank. With these assets, you can navigate any economic situation with confidence. 

Here are five strategies to strengthen your business:

1. Build a Budget

Think of a budget as a money plan for your business, helping you make sure you're on track to do well. It's good to have goals for now and for the future. With the help of experts, like the ones at Stearns Bank, businesses can set simple targets for how much money they'll make, spend, and save.

After you have these goals, you can figure out how to meet them. It's also important to check your budget from time to time and change things if needed.

And don't forget to keep some extra money on the side for any surprises that come up.

2. Maintain a Healthy Cash Flow

Cash flow isn't just about ensuring money comes in; it's about managing when and how it does. A steady cash flow means your business can handle regular expenses, pay employees, and invest in future growth opportunities. Small business owner receiving payment method

During uncertain economic times, disruptions to this flow can quickly escalate into larger issues. Diversifying income sources, maintaining a clear invoicing system, and staying vigilant about overdue payments can help in achieving steady cash inflow. 

Additionally, using financial tools and services, like those provided by Stearns Bank, can offer insights into optimizing cash reserves, effectively planning expenditures, and identifying potential financial bottlenecks before they become problematic.

3. Get a Small Business Loan

In fluctuating economies, liquidity is paramount. A timely business loan can act as a buffer, helping businesses bridge financial gaps, capitalize on growth opportunities, or weather a downturn. 

Loans can offer breathing room, whether it's to purchase equipment, hire more staff, or invest in research and development. However, the key is securing the right loan. Consider factors like interest rates, repayment terms, and potential penalties. 

Stearns Bank has a track record of working closely with businesses, ensuring they understand the intricacies of their loan and how it can benefit them. 

Our expertise can help you find the best loan structure for your specific needs, ensuring you can manage repayments comfortably and benefit from the extra financial leverage.

4. Cultivate Banking Relationships

Banking goes beyond transactions — it's built on trust. Consistent, supportive banking relationships smooth the path when navigating financial challenges. Reliable partners like Stearns Bank provide tailored advice, beneficial products, and favorable terms during tough times.

Dallas Nestvold, owner of Revived Iron Auto RepairDallas Nestvold, owner of Revived Iron Auto Repair, experienced those benefits firsthand when applying for an SBA loan with Stearns Bank.

"I valued the hands-on approach. With Stearns Bank, I never worried about going over budget or being left hanging. It feels like that small-town bank where everybody knows your name that I always wanted to work with," Dallas said.

5. Reevaluate Marketing Efforts

During economic challenges, it's important to review your marketing strategy. While some businesses might cut their marketing budgets, it's vital to keep promoting your brand. This keeps customers interested and keeps competitors on their toes. 

Adjust your marketing plan, focus on what you do best, use cost-effective ways to reach customers, and choose the right platforms to advertise.

Safeguard Your Business With Stearns Bank

At Stearns Bank, we pride ourselves on being more than just a bank; we're a dedicated ally for small businesses. Our deep-rooted expertise allows us to offer tailored advice that meets your unique challenges. Business owner and Stearns Bank business banker

Whether you need guidance on managing cash flow, securing the right business loan, or navigating financial uncertainties, we’re here with a comprehensive suite of solutions.

Our commitment is to cultivate lasting relationships, ensuring transparent operations and steadfast support every step of the way. By partnering with us, you’re choosing a dependable teammate dedicated to your business's growth and success.

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