Polling more than 500 U.S. small business owners across a variety of industries, a new Kabbage survey reveals 80 percent of entrepreneurs are confident their small business will outlast a market downturn and how companies will prepare for one differently.
Even with a high rate of confidence in the stability of their companies, small business owners anticipate a slowdown and will take necessary steps for their business. While 10 percent of respondents were unsure how to prepare for a recession, the majority of entrepreneurs are pursuing investment opportunities to increase their cash flow.
Actions to increase cash flow:
33 percent are growing their customer base, securing more contracts or expanding sales.
21 percent are launching new products or services in an effort to increase revenue.
13 percent are pursuing business partnerships to sell to a wider customer base.
Actions to reduce costs:
8 percent are reducing operational expenses where possible to increase cash reserves.
8 percent are postponing an expansion.
7 percent are postponing hiring.
“The grit and resilience of small business owners are admirable. Despite the growing fears of economists and Wall Street, entrepreneurs are ready to rise to the challenge,” said Kabbage Chief Revenue Officer, Laura Goldberg. “The data demonstrates how every small business is unique and how market shifts impact them individually. The constant among them is their confidence to build their business and pursue their passion despite any hurdle.”
The survey asked for anecdotal responses from small business owners, showing the variety of ways that small businesses will approach a potential recession. Responses include:
— My organization has sustained over 30 years of economic downturns, severe storms, and just about every other obstacle. Of course, economic issues affect us, but we continually reinvent the way we manage the business to do whatever it takes to sustain. — Medical Services Provider, New Jersey
— I am prepared to change my marketing or selling strategies. It’s what I learned from the last recession. — Online Retailer, Texas
— I work as hard as possible every day and cannot worry about things out of my control such as a recession! I have $400,000 of inventory on the shelf. Selling that will get me through whatever hard times may come. — Manufacturer, Texas
— I’m not worried as I’m a management business in the entertainment industry and jobs can last as long as seven years. — Entertainment Agency, California
— My company does better in bad times as my stores specialize in closeouts and bargain goods. — Retailer, North Carolina
— We always run lean to ensure survival if there is a downturn. — Marketing Agency, Florida
— Our industry was affected by the 2008 meltdown, and we run our business from that experience. If a recession were to happen, we would view it as an opportunity to gain a bigger portion of our industry. — Retailer, California
— We survived the recession of 2008. We know how to cut costs and market during a recession. — Screen Printer, Georgia
— We’ll do more face to face expos and trade shows for relationship building. — Retailer, California