Preparing for the Possibility of a Downturn

Will there be a recession? The future is filled with uncertainty. One of the best ways to provide comfort and control is to start planning now, knowing you may need to adjust as the situation unfolds.


These are actionable steps you can take right now to prepare yourself and your company for an economic downturn.

Assess Your Cash Flow

How much are your expenses each month? What happens if your biggest client doesn’t pay for three months or goes out of business? Do you know how much cash you burn through each month? 


Check out your P&L for one month and look at COGS+ total expenses. This will equal your cash out for the month. Next, review a few months and get the average amount you are spending. This provides a quick snapshot of cash out for the month. 


Dave Ramsey suggests having three to six months of expenses in the bank for personal use. We suggest nine to 12 months for a business.

Examine Your Industry

What will sell better during a time when people and businesses are thinking about saving money? Think of do-it-yourselfers (DIYers)—what are the tasks they’ll be unwilling to do themselves and opt to pay for? Can you expand in that area? 


If you are an electrical contractor, people may be less inclined to put in new electrical work, but they might be willing to spend money on repairs. You could offer a ‘check up’ to see what needs to be updated, like a new electrical panel or replacing outdated lights with LED lights to save money on energy bills.


Is there a service you provide that typically generates more interest during a recession? A colleague of mine prepares taxes. Her tax business increased dramatically in 2008/2009 because taxes are one of the things people don’t want to DIY—the risk is too high. Increase marketing for that service to reach potential clients now.


Is there something you can create now that will provide revenue during a recession? People are more likely to seek information and become DIYers. Can you provide fee-based courses that will educate this audience in your area of expertise? Do you have marketing that will drive people to buy it? Do you have room in the budget to pay for the marketing? 


Coming up with a plan for creating another stream of revenue is a good idea, even if a deep recession never happens.

Review Revenue and Expenses

Can you increase your fees without pricing yourself out of the market? Can you increase your services with current clients? 


Monitor your topline indicators for revenue including leads, sales pipeline, etc. This will give you a better picture of when slowdowns could be coming to affect revenue. Create plans with your leadership team of what to do if a revenue stream slows, and revisit them to make changes as needed.


Finally, scrutinize your expenses. Is there any way to reduce or eliminate costs?

Communicate the Plan with Your Team

Let your team know what measures you will take and how they can help, or if these measures will impact them. If you have to lay off employees, do it quickly and with dignity. Frequent discussions with employees to keep them updated will help you avoid rumors and speculations on the health of the company. It will also give your team a sense of security and trust.


The way you treat people—your employees, customers and vendors—during this tumultuous time is what they’ll remember. Make sure your decisions are aligned with your mission and vision and values. You will get through this! We all will. We are stronger together.


Amid the uncertainty, are you looking for peace of mind that your business finances are in order? Reach out and let’s talk more about how we can help you prepare for the future. 

Our Latest Insight

Cash Flow Forecasting: Predicting Uncertainty

By Alisa McCabe • April 28, 2026
Why Predicting Cash Flow Can Feel Difficult Many entrepreneurs struggle with forecasting because business conditions rarely remain stable. Seasonal fluctuations, changing customer behavior, and market shifts can create unpredictable revenue patterns. Uncertainty often leads owners to question whether projections are even worthwhile. Forecasts that fail to match reality can feel frustrating, especially when unexpected events disrupt plans. The purpose of forecasting, however, is not perfect prediction. Financial projections help leaders understand potential outcomes and prepare for a range of scenarios. A clear picture of possible results makes it easier to navigate uncertainty with confidence. When viewed as a planning tool rather than a guarantee, forecasting becomes far more valuable. Using Scenario Planning to Prepare for Different Outcomes Scenario planning strengthens forecasting by exploring multiple possibilities instead of relying on a single estimate. This approach allows entrepreneurs to understand how different circumstances might affect their financial position. A basic scenario planning process typically includes: An optimistic projection based on stronger-than-expected revenue A realistic estimate using historical performance patterns A conservative projection that assumes slower sales or delayed payments Reviewing these scenarios helps leaders understand how much financial flexibility exists under various conditions. Planning for multiple outcomes also reduces stress when unexpected changes occur. Organizations that regularly evaluate different financial scenarios are often better prepared to respond to market fluctuations. Building Financial Buffers for Greater Stability A contingency buffer provides an important safety net when actual results fall short of projections. Even a well-constructed forecast cannot eliminate every risk, which makes financial reserves an essential part of planning. Cash reserves allow businesses to maintain operations during slower periods or unexpected disruptions. These funds may cover payroll, vendor obligations, or essential operating expenses when revenue temporarily declines. Creating a financial buffer usually requires consistent discipline. Setting aside a portion of profits during strong months can gradually build a reserve that strengthens stability. Having this cushion reduces pressure and gives leaders more time to make thoughtful decisions when challenges arise. Creating Flexible Spending Frameworks Forecasting works best when spending plans remain adaptable. A rigid budget can become problematic if revenue changes significantly throughout the year. Flexible financial frameworks allow owners to adjust spending as actual results unfold. Certain expenses may remain fixed, while others can be scaled based on performance. Several practices support this flexibility: Prioritizing essential operating costs before discretionary spending Delaying non-critical investments until revenue targets are achieved Reviewing financial performance regularly to guide adjustments This approach helps organizations remain responsive to real conditions rather than relying solely on early projections. Build Stronger Financial Clarity for Your Business Forecasting uncertainty becomes far more manageable when supported by accurate financial records and clear reporting. Reliable financial data allows entrepreneurs to create realistic projections and evaluate how their organizations are performing throughout the year. First Steps Financial helps business owners strengthen their financial visibility through fractional bookkeeping and financial consultation services that support effective cash flow forecasting. Organized records and thoughtful analysis allow leaders to plan ahead while remaining flexible as conditions evolve. If you want greater confidence in your financial planning and support building stronger cash flow forecasts, reach out to First Steps Financial today to start the conversation.

Five Summertime Strategies for 2026

By Alisa McCabe • April 21, 2026
Here are five business strategies to help you regroup, reassess, and rejuvenate your business halfway through 2026. Celebrate Your Accomplishments Take time to pat yourself on the back and congratulate the people around you for the goals you’ve reached and the efforts your team has made on your behalf. You might be shocked when you think about how far you’ve come. Maybe you’ve hired another team member and your team is the largest it’s ever been; perhaps you’ve reached record revenue goals; possibly you’ve solved a complex supply chain problem. We all could use more praise and more celebrations in our lives. Perhaps you can organize a party, or if you are not the partying type, a quiet word individually with your team can go a long way, maybe more than you know. Take a Vacation If you’re feeling quite burned out, the best thing you can do is stop and take a breather. There’s nothing better to rekindle your creative juices than to get away from the business for a while. Summertime is when most people take a vacation, so if your business is not having its busy season, this might be a good time to go away, even if for a little while. If you’re anxious about being away from your business, you’re not alone. In your annual planning process, plan for and block out your vacation way ahead of time. Book the reservations with no refunds several months in advance so that you won’t chicken out at the last minute. There is life beyond your business, and you will be a better business owner when you take regular breaks away. Schedule a Mid-Year Review How has your business fared for the first half of 2026 compared to the goals you set at the beginning of the year? Are you on track to reach your goals? Should you design a course correction or are you on track? Maybe you’re even ahead of plan! You can make this process as informal or formal as you want. Some businesses hold retreats; you may simply need some quiet time on a weekend when all your family is busy doing something else. Be Selective About the Projects You Start Is your plate too full? Entrepreneurs that wear many hats would probably say “yes” to that question, so the next question is do you have to do it all at once? Ask yourself what you can afford to stop doing that doesn’t make sense. Is there a project or two that can wait? If so, decide to stop stressing about not getting it done and give yourself permission to put it on the back burner for now. Play Big Maybe you’re not playing big enough. You might be busy, but are you busy with the things that will take your business to the next level? Do the thing you’re afraid to say “yes” to; the thing that you know will transform your business and get you closer to your dreams. If you’re putting off a project that you know will pay back handsomely, then shelve everything you’re working on and start on the one that will reap the most rewards. It could be a new product or service line, a new ad campaign, a new hire, a new joint venture, new financing, or even a new partner, which is very big indeed. You likely know what it is you need to do; your gut has been telling you for a while now. Just get it started, and it will then become easier. Summertime is a great time to regroup, re-energize, and refresh your business. Try one of these five tips to spice up your summer as well as your business success.

The Silent Profit Killer: How Payment Processing Fees Are Eating Your Bottom Line

By Alisa McCabe • April 13, 2026
Understanding What Payment Processing Fees Actually Include A typical business transaction involves more than just the swipe of a card. Several participants play a role in moving funds from the customer’s bank account to the merchant’s account. Processing costs generally include three core components: Interchange fees: Charges set by card networks and paid to the issuing bank for handling the transaction Assessment fees: Network charges collected by companies such as Visa or Mastercard for using their infrastructure Gateway or service fees: Costs paid to payment processors that manage authorization, settlement, and reporting. Each component contributes to the total amount deducted from every purchase. Together, they form the full cost of credit card processing services. While the percentages vary depending on card type, industry, and transaction method, many companies pay somewhere between 2-3% for each sale. The Real Cost Per Transaction A 2% charge might appear minor at first glance. The true impact becomes clearer when owners translate percentages into actual dollars. Consider a company generating $500,000 in annual card revenue. A 2.9% rate results in roughly $14,500 paid in processing charges. Increase annual revenue to $1 million and the cost rises to about $29,000. These numbers illustrate how credit card processing fees quietly accumulate. When organizations rely heavily on electronic payments, the yearly burden can rival other major operating expenses. Understanding this total cost helps leaders treat processing charges as a controllable financial factor rather than an unavoidable background expense. Why High Volume Businesses Feel the Pressure Most Industries with frequent transactions often experience the greatest impact from credit card processing. Restaurants, retail stores, subscription services, and e-commerce operations typically process large volumes every day. Even small adjustments in rates can produce meaningful savings in these environments. A reduction of half a percentage point may translate into thousands of dollars over the course of a year. The challenge lies in visibility. When costs are spread across hundreds of deposits and statements, they can easily blend into normal accounting activity. Businesses that examine their merchant reports regularly gain a clearer understanding of how these charges influence profitability. Practical Ways to Reduce Processing Costs Entrepreneurs cannot eliminate payment processing entirely, yet several practical steps can help reduce unnecessary expenses. Review merchant statements carefully to identify hidden charges or unnecessary service add-ons Negotiate rates with processors once transaction volume increases Encourage debit payments or lower cost methods when appropriate Evaluate whether the current provider still offers competitive credit card processing services Small adjustments can create noticeable financial improvement over time. Regular monitoring also helps ensure fees remain aligned with the organization’s current transaction profile. Strengthen Financial Visibility and Protect Your Margins Processing costs represent one of many operational expenses that quietly affect profitability. Strong financial oversight allows leaders to recognize patterns, evaluate vendor relationships, and make adjustments when necessary. First Steps Financial supports entrepreneurs through fractional bookkeeping and financial consultation designed to improve visibility across operating expenses, including credit card processing fees. Clear reporting and organized records help owners understand where money is going and where improvements may exist. If you want clearer insight into your financial data and assistance in evaluating payment processing expenses, reach out today to start the conversation.

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