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.
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