Tips for dealing with an economic downturn
- Streamline operations – Consider where you can cut costs or project scope to meet reduced budgets. Work with your clients and key partners to come up with flexible solutions. Reduce your overall expenses where possible to provide more wiggle room.
- Leverage your emergency savings fund – This is what you set aside money for—to help cover expenses in case of trying times. Remember to adjust your budget accordingly to get through lean months.
- Reach out to your network – During a downturn, employers often seek to switch work to freelancers, who offer flexible schedules and lower overhead. Proactively reach out to key contacts and businesses to let them know that you’re available.
- Diversify your products and services – How can you adapt your portfolio of services to meet current needs? Can you offer courses, write toolkits, or provide online mentoring and training? Can you start to sell your product online?
Preparing for emergencies when self-employed
Here are some ways you can prepare to help deal with emergencies:
- Create a business continuity plan – Business continuity plans aren’t just for big businesses. Freelancers and small business owners can benefit from identifying significant risks to their business and preparing for recovery. Many tools and templates are available online to help you craft the right plan, and the process of thinking through risks and plans will help to ensure you are prepared.
- Implement crisis communication – Contact clients and stakeholders to address the situation and communicate any issues or changes in timeline.
- Proactively address changes in cash flow – Reach out to debtors and other stakeholders. Many financial institutions will work with you to restructure payments and prevent any loans from falling in arrears. Consider other funding that might be available to you; some businesses may be eligible for a low-interest disaster recovery loan through the SBA for damaged and destroyed assets in a declared disaster.
- Strengthen cancellation clauses – Review your contract and consider including clauses that help to protect you in the future. A lawyer can help to draft appropriate language for your business.
- Ask for help – Connect with mentors and other freelancers to learn how they deal with emergencies and share information and solutions.
To help your business prepare for disasters, economic downturns, and other emergencies, Ready.gov offers free resources to help you build a business continuity plan. Or consider small business resilience training, with tools and other resources available from Score.org.