This is not an article about political prognostication or economic speculation. Rather, it’s about ensuring that your business is prepared for all contingencies.

Simply put, none of us know what tomorrow will bring, and though we all hope for the American economy to remain vibrant, there are thousands of independent, external factors that could potentially cause a downturn. The question for service and contracting professionals to ask is what will you do to weather any economic storms? How can you prepare your business today for any unwelcome turns tomorrow?

Take a Look at Your Client List

The first thing to do is look at your client list and see how varied and diverse it is.

Do you have one major client who accounts for a huge percentage of your revenues? If so, then you may be in a more precarious spot than you realize. What if a market crash or recession hits that client hard, they have to make some cutbacks, and you lose their business? Could your business survive it?

Ideally, you’re always working to bring in more customers, rather than leaning heavily on only a handful. A lot of smaller clients, from diverse areas, are key for economic sustainability.

Consider Your Industry

Economic downturns impact different industries in varied ways. It’s worth doing a little research to find out how your industry was impacted by past financial crises and to home in on specific areas of your business that you can grow even during tough times. 

For example, say you own a plumbing company. During a financial crisis, you’re probably going to see less demand for luxury items, but there will still be plenty of homeowners who need help keeping their plumbing systems up and running, as efficiently and as economically as possible. So, you may sell fewer Jacuzzi installations, but you might actually grow your preventive maintenance program.

Have a Worst-Case-Scenario Budget

If an economic crisis does hit, you may need to make some tweaks to your budget. What would those tweaks look like? What are some expenses you could curb in order to keep your company afloat?

Try to come up with a worst-case-scenario budget — a bare-bones spending plan that gives you a blueprint for regulating costs should your company’s revenues ever dry up. Look for overhead that’s not necessary, strictly speaking.

Ensure Rainy Day Funds

When times get tough, it can be extraordinarily beneficial to have a little money stowed away to defray surprise costs. For example, what if your vehicle breaks down or you need to quickly replace emergency equipment? Do you have a savings account to cover these things? If not, now’s a good time to start one. Have that rainy day fund ready to go should your financial situation ever take a turn.

The bottom line for service and contracting business owners is that you can’t stop economic meltdowns from happening, but you can make sure you’re ready to weather them. Use these tips to safeguard your company even against the worst kinds of economic peril.

About the Author

Amanda E. Clark is the president and editor-in-chief of Grammar Chic, a full-service professional writing company. She is a published ghostwriter and editor, and she's currently under contract with literary agencies in Malibu, California and Dublin. Since founding Grammar Chic in 2008, Clark, along with her team of skilled professional writers, has offered expertise to clients in the creative, business and academic fields. The company accepts a wide range of projects; often engages in content and social media marketing; and drafts resumes, press releases, web content, marketing materials and ghostwritten creative pieces. Contact Clark at www.grammarchic.net.