How to Tighten Your Business Finances During the Looming Recession

By Andy Karuza, Marketing Manager at NachoNacho and founder of several technology startups.

A recession is finally upon us, by your definition. Among those who mention the slowdown are prominent economists, CEOs of different companies, major banks and former Fed officials. Seventy-five percent of CEOs of Fortune 500 organizations have confirmed that growth will turn negative before the end of 2023. At the start of the year, the US economy recorded a contraction of 1.4% in the first quarter. A recession occurs when GDP goes negative for two consecutive quarters.

During an economic recession, up to 17% of businesses do not survive, going bankrupt, being acquired or being privatized. However, the surviving companies succeed (some 9% of them even achieve better results) generally because they adopt appropriate financial management strategies or take advantage of new market trends. Here are four critical areas a business needs to focus on to survive a recession.

Marketing channels must attract the right customers.

Tracking the organization's marketing channels and monitoring key performance indicators (KPIs) is essential. Channels that get the desired results should continue, while others should be discontinued to help minimize costs. The goal is to focus on the best marketing channels to attract and retain the right kind of customers (more on that soon). Businesses need to have a manageable marketing budget to help build a strong online presence. Marketing is often interrupted when the business needs it most. At the same time, it may be the best time to acquire new customers when your competitors are back in obscurity. Here are some tips on how to handle marketing during an economic recession:

• Send frequent emails and social media updates about your products and services. It helps to stay organized with a content marketing calendar.

• Harness the power of referral or affiliate marketing to existing customers or partners. In most cases, you will only pay if they bring you sales.

• Use retargeting ads rather than cold top funnel advertising (people who have never heard of you) to reach potential customers who have interacted with you before. These website visitors are 43% more likely to convert. Why invest in recruiting new people when it's more profitable to try to convert or retain the people you've already painstakingly brought to your website?

And in general, always make sure you have a clear ideal customer profile or "personal buyer...