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Small businesses are the backbone of the American economy, accounting for nearly two-thirds of all recent private sector jobs. However, these businesses are often the first to feel the effects of a slowing economy. These uncertain times bring many challenges but, as a business owner, there are several things you can do to protect your business in a down economy.

Here are some things to keep in mind:

Cash Is King

One of the most important things to do in a down economy is to match its pace. You may need to slow down your own operations and expenditures. By avoiding the mistake of continuing to spend at the same rate you were in an up economy, you can maintain a positive cash flow and avoid taking on excessive debt. Consider focusing on the most important investments for now. Be sure to also watch your outstanding receivables. If your customers slow down on their payments, you may need to follow up more often to make sure you’re paid and not left with an uncollectible receivable.

Evaluate Your Supply Chain

Another strategy for weathering a down economy is to re-evaluate your supply chain, something many businesses are already doing in the wake of the Covid-19 pandemic. You could look at both domestic and international suppliers. It’s important to ensure your costs are appropriate and that you’re getting the best possible value. Don’t put all your eggs in one basket, either. You may also want to look for additional sources of supplies to ensure you’re getting the best rate for your supplies, and this could save money in ways you can see more immediately.

Evaluate Staffing Flexibility

You must also prioritize your people in a down economy, even more critical in the current climate, as businesses struggle to bring on new staff. One strategy to consider is cross-training your employees. Cross-training is the practice of training employees in the roles and responsibilities of more than just one position.

If you are a restaurant owner, an example of this might be to make sure all your servers are trained to know how to host the front of the restaurant and that your hosts should know how to wait tables. This way, you’ll have employees who can do more than one job should there be a need due to staffing shortages, layoffs, sick employees, etc.

You might also consider “grading” your employees, protecting your “A” players while making tough decisions about your “B” and “C” players. It may be wise to look at your revenue-producing employees versus your support staff. Should you need to reduce staffing, you’ll want to maintain your ability to generate revenue.

Invest in New Technologies with Immediate Returns

Finally, a down economy can be a good opportunity to invest in new technologies—particularly those that offer immediate returns. Although you may want to avoid making long-term investments right away, you must not let your competition become more efficient while you stand still. Try to look out for technologies that can help streamline your operations and improve your efficiency and integrate them at a slower pace than you might when the purse strings are less tight.

Remember, even if it seems like things aren’t great, every little bit helps. Even if the smallest changes might seem insignificant, a handful of tiny changes is still a handful. Success in an uncontrollable economy essentially lies in how you invest not only your money, but your time and resources, as well.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business & transaction advisory, healthcare management advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.