The word is out - the economy is changing, and you should probably start planning for a recession. MakingChips hosts Jason Zenger and Jim Carr help take the intimidation out of a looming recessional period by offering some practical advice based on their own personal experiences with leading manufacturing businesses during economic recessions. Learn how you can get a head start in your business and personal life by making just a few - and not too frightening - changes to your company’s lifestyle in this important episode of the MakingChips podcast!
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Jim and Jason explain that recessions in the economy are inevitable. While we can’t ever know for sure when or how harshly recessions will hit, we can take steps to prepare for the strike. There are difficulties in every season of the economy - even in the good times. Recessions simply provide a different set of challenges that can be weathered more effectively by those who plan accordingly. Jim and Jason point out that the manufacturing economy is at a booming national high, which makes now the perfect time to save and plan for a dive.
A looming recession raises numerous questions on how to best manage company and personal finances. Jim and Jason give helpful starting points for long-term effectiveness, beginning with the important step of keeping your debt low and under control. The probability of needing to cut job margins is high, and there will not be as much room in the profit margin to play with. Keeping debt thin will leave more room for necessary funding. Saving money is also vital. Jim and Jason recommend bulking up the savings account to create a buffer for yourself and your company for when times get tight. Saving now can help counter the possible need to cut employment levels. A third way you can take precautions now is to be prudent with your company and personal spending. Determine what you can cut out of your business and personal spending and make a budget. Learn how sacrificing now can save you later by listening to the full episode!
Don’t leave your employees and team members in the dark on what is happening in the economy and of the changes that you will likely need to make in your business when the recession hits. Encourage your team to not overextend themselves and to prepare themselves. Build up morale by explaining the cyclical nature of the economy. Recessions don’t last forever! Give them tools to help them prepare (such as this podcast!). Refrain from purchasing new machinery leading up to the recession and during. Invest in your current machinery by making necessary repairs and keeping up on maintenance. Today’s machinery will be tomorrow’s money-makers. Invest now while you have the monetary means.
Jim and Jason point out that opportunity is available in every season of the economy. Diversify your customer base now so that when things get rough, your company’s well-being won’t be compromised by the collapse of just one or two of your clients. Not all of your customers will be affected by the recession in the same way. When the recession does hit, don’t sit back and wait it out. Look for ways to build your business by observing what is available when other companies are struggling. An example Jim and Jason give is acquiring your competition’s businesses or bringing them onto your team. Look for ways you can help yourself by helping others. For more tips and tricks on how to lessen the pain of a recession and effectively prepare your manufacturing business for the coming times, listen to the full episode!