by Shaheen Darr

Created on: August 18, 2011   Last Updated: August 19, 2011

Recent times have made small businesses acutely aware of the importance of having some kind of a safety net in place when times are difficult. While this cannot always ensure that it will prevent a business closure, recession proofing can lessen the impact on a small business and help its chances of survival. 

Customer Orientated: This incorporates a range of factors that include giving your customers a superior service in exchange for their loyalty, pricing goods competitively, providing offers and discounts and selling your products in an environment that is friendly and welcoming. Customer feedback and referrals can boost business reputation and ensure that despite difficult times they will continue to rely on you to supply them their requirements. Similarly for online businesses the effectiveness of a website, prompt interaction with its customers and a good representation of business products can help to maintain continued customer interest.    

Cash flow: Saving during good times will buffer shortfalls during difficult periods when the business will still need sufficient cash to pay off expenses. Staying aware of changing economic times and setting up a budget that allows for variations in business turnover can help you plan ahead for the future. Keep expenses under control by updating business accounts regularly to allow accurate reporting. This can help you analyze areas in which you have overspent to enable controls to be put into place in time. Effective credit control procedures should be implemented for customers who buy goods on credit. In difficult times it is best to stick to cash terms and avoid granting credit facilities due to the risks involved. By ordering goods that can be rapidly turned over and reducing unnecessary amounts of slow selling stocks cash can be freed to allow the business owner to keep the business operational. 

Flexibility: It helps to remain flexible in several areas of the business during difficult economic times to allow changes to be implemented easily. Some examples include replacing suppliers who are not competitive, cutting back on non key office staff or asking employees to consider working from home or part time hours. Explaining the reasons why cutbacks are taking place can encourage employees to suggest alternatives like flexible ways of working as it is in their interest to stay in work.

Diversification: Offering a range of goods and services to your customers can help you to attract

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