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COAST RIVER BUSINESS JOURNAL BUSINESS COMMENT FEBRUARy 2022 • 13 Are you ready for the downturn? By Jessica Newhall Clatsop Community College Small Business Development Center If you had been given a crystal ball in March 2019 and been told that in one year a global pan- demic would strike, causing major disruptions in the way you do business, would you have been better prepared? I’m not a trained economist nor do I pos- sess the gift of seeing the future. However, even without these skills and abilities, I can say with absolute certainty, our economy and likely your business will face another economic downturn. Maybe not tomorrow, or next year or even the next, but it will come. Will you be ready? When the pandemic severely disrupted the business environment a lot of experts in the busi- ness world suggested business owners needed to build better resiliency. Yet, trying to teach business resiliency during a crisis is like suggesting to the ship’s captain how she could build a better vessel while it is in the process of sinking. No, at that point what the captain needs is for you to grab a bucket and start bailing water! Only when she has her ship firmly pulled into port can she start to think about what happened and what improvements are needed to ensure the success of future voyages. Certainly, to suggest we are safely in port would be overly optimistic. Omicron and variants con- tinue to knock at the door. Supply chain challenges, labor shortages and inflationary pressures persist. However, I do hope that you also feel that your experience over the last two years has given you a newfound appreciation for your capabilities and capacity to navigate complexity and overcome chal- lenges. With these also should come some invalu- able insight into the power of being prepared. How will you harness this newfound knowledge that the pandemic has brought you? I am handing your business a crystal ball. Although it can’t tell you when, it will tell you that an economic down- turn or other crisis will happen. How will you pre- pare your business and protect yourself and your assets? Here are some suggestions: Jessica Newhall • Financial management: If there is one lesson coming out of the pandemic for small businesses, let it be this: you must have a good financial plan for your business. This includes having up-to-date and accurate financial records as well as an under- standing of your expenses. Without these you can- not know how much cash you need to have on hand to withstand a downturn or be prepared to seek out- side funding. • Shore up your personal credit: Unlike the pandemic when many small businesses were saved by grants and unemployment insurance for the self-employed, programs like these are far less likely in an economic downturn. In fact, it is during an economic downturn that access to credit and financial support tightens and many financ- ing options will require personal guarantees. Poor personal credit health (and, “ahem,” underreport- ing your earnings to avoid the IRS) can have neg- ative impacts on your ability to borrow when you need it. • Invest in marketing and customer experi- ence: When consumers have less to spend, they are more selective about where to spend their dollars. A solid marketing and customer development plan will help ensure you are looking far enough ahead of your present sales to win those future dollars. CERTAINLy, TO SUGGEST WE ARE SAFELy IN PORT WOULD BE OVERLy OPTIMISTIC. OMICRON AND VARIANTS CONTINUE TO KNOCK AT THE DOOR. SUPPLy CHAIN CHALLENGES, LABOR SHORTAGES AND INFLATIONARy PRESSURES PERSIST. HOWEVER, I DO HOPE THAT yOU ALSO FEEL THAT yOUR EXPERIENCE OVER THE LAST TWO yEARS HAS GIVEN yOU A NEWFOUND APPRECIATION FOR yOUR CAPABILITIES AND CAPACITy TO NAVIGATE COMPLEXITy AND OVERCOME CHALLENGES. WITH THESE ALSO SHOULD COME SOME INVALUABLE INSIGHT INTO THE POWER OF BEING PREPARED. • Diversify your revenue streams: If there was an award for the most over-used phrase in business during the pandemic it would likely go to the word “pivot!” Yet, when a business is reliant on only on one sales channel or revenue stream, they are more vulnerable to market shifts and must make quick, often reactionary and costly shifts to survive. Are there any opportunities for you to use your present resources to diversify your business? • Check your insurance: When was the last time you talked to your insurance agent? With the rising costs of supplies, building materials and labor, are you properly insured for replacement? Do you understand your coverage? This is a good time to make that appointment. You’ve come so far and weathered so much over the last two years. You deserve to enjoy the rewards of your hard work. So make sure you have them protected as much as possible from any com- ing storms! Jessica Newhall is the associate director of the Clatsop Community College Small Busi- ness Development Center. She can be reached at jnewhall@clatsopcc.edu. Get to The Point. Expert Service. Guaranteed. Trust your vehicle safety to the professionals at DEL’S O.K. TIRE Same owners•Same tires Same great service YOUR #1 SOURCE FOR TIRES Business News Updates e-edition Coast River Business Journal.com CUSTOM WHEELS AUTOMOTIVE SERVICES 503-325-2861 For emergencies 503-325-0233 35359 Business Hwy 101 (Miles Crossing) Astoria, OR Hours: Mon-Fri 8-6 · Sat- 8-4
