There's an elephant in the room during my business skills workshops these days. Countries around the world are starting to fall into recession, but the people I meet don't seem to be thinking very hard about how this might affect them.
The media have been focusing almost exclusively on the big picture (central banks bailing out retail banks) or defaulting to dinner party economics - the fall in house prices and rise in food prices.
So if you're just starting out as self-employed what should you do? Well it's not rocket science...
Here are my top tips for weathering a recession:
- Hang on to ready cash - don't assume you can borrow
- If you have an overdraft imagine what you would do if the bank withdrew it overnight - something they're perfectly within their rights to do.
- Make sure you know the minimum figure you can survive on - and your breakeven point
- Try to lower your breakeven point
- Make sure you know what your value proposition is. Why should your clients come to you, as opposed to anyone else?
- If others work for you, make sure they understand your value proposition too. You'll need them as your ambassadors.
- Don't kid yourself. Be realistic.
Actually this is good business practice in any circumstances. Doubly so when times get tough.
If you have any other tips on beating a recession I'd love to hear them.
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