The time is now for businesses to plan for an inevitable post-COVID-19 recession. Recessions result in reduced demand and disruption to the global supply chain.
Adam Ferrari founded his own company, Ferrari Energy, to educate landowners on how to manage their acreage best. He, too, has started necessary preparations for the severe economic downturn that is likely to follow the coronavirus pandemic. To assist other small businesses in the process, Ferrari suggests these ten helpful tips:
1. Take a look at expenses weekly to get a grip on your finances. Review the money you spend and try saving funds where you can. The stricter you are with your financial expenses, the better. Try to trim any unnecessary spending wherever possible.
2. Avoid late invoices during your time of preparation. You want to bring money into your business as quickly as possible before another potential drop in the market. A late invoice now could lead to a canceled payment or debt later.
3. Explore avenues of expansion within your market, or others, that you could tackle now to help sustain yourself when money flow from your main product or service dries up down the road. By building multiple streams of revenue, you can create a “multichannel sales strategy” to give your current customers a chance to buy from your business in more ways than one.
4. Continue providing moral support to your consumers through motivational posts or comforting emails to help maintain a sound sense of togetherness while facing such times. Some of your customers might live alone, and a little extra encouragement can go a long way for an independent individual as well as your brand.
5. Set a goal to gain more clientele before the predicted recession happens. You will only increase your chances for more revenue opportunities.
6. Prepare a series of new projects to launch before, during, and after the economic downturn. Get your creative juices flowing and consider projects that require little to no extra expenses.
7. Consider working with freelancers if you do not already have a staff. Companies working with contracted professionals are more likely to withstand financial losses. By seeking out additional help as needed, you have more flexibility to scale up or down with employment expenses.
8. Collect data from consumers to see in what areas you can benefit them the most. Conduct an email survey and offer a discount to participants in exchange for additional income or brand-boosting ideas.
9. Reach out to local charities that have assisted with the coronavirus and ask if they have any additional needs that your company can fulfill. It is more beneficial to maintain a safe budget if you seek volunteer opportunities that require no extra spending. This approach is a great way to gain an increase in consumer support.
10. Set up a line of credit as a back-up if you are a small business. You want to continue to take care of your employees in times of recession, and having a financial plan B for worst-case scenarios will save you some potential future stress.
About Adam Ferrari
Ferrari Energy is an energy company based in Denver, CO, founded by chemical engineer Adam Ferrari. Adam is a native of Chicago, IL, and was formally educated as a chemical engineer, although his professional career has been that of a petroleum engineer. He completed his degree at the University of Illinois at Urbana Champaign and graduated magna cum laude. His first industry role was as a production engineer for BP, and following this assignment, he also spent time on the financial side of the energy business at Macquarie Capital.