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 You could offer a ‘check up’ to see what needs to be updated, like a new electrical panel or replacing outdated lights with LED lights to save money on energy bills.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

The Missing Relationship That Is Stifling Your Growth

By Alisa McCabe • September 14, 2026
"Accounting is a stick in the mud." "I'm not really sure what a COO does all day." "The CFO just plays around with their little Excel sheets." You have probably heard one of those lines. You may have thought one yourself. They sound like harmless office humor. They actually point to something expensive. In most growing service businesses, nobody has ever defined how operations and accounting work together. The people who produce your financial reports sit outside the very decisions those reports are meant to inform. That gap costs you every single month, quietly, in profit that should have been there.  ​ Part 1 of a 5-part series on the COO and Accounting relationship

Capacity Planning as a Financial Exercise

By Alisa McCabe • September 14, 2026
In modern business management, effective capacity planning requires far more than matching supply with demand—it demands a rigorous financial framework. Every unit of unused capacity represents sunk cost and margin erosion, while every unit of insufficient capacity risks churn and missed revenue. By evaluating capacity planning as a financial exercise, organizations can translate labor hours, utilization rates, and operational throughput into clear financial metrics like cost of goods sold (COGS) and return on invested capital (ROIC). This guide explores how to integrate operational capacity into your financial planning and analysis (FP&A) cycle to drive sustainable, cash-efficient scale.

Accounts Receivable Aging Benchmarks For Service Businesses

By Alisa McCabe • August 31, 2026
In a service-based business, time is literally money, and every day an invoice goes unpaid, your margin shrinks. Unlike product businesses that can rely on physical inventory to back up value, service providers face a unique cash flow vulnerability: you've already delivered the work, paid your team, and covered overhead long before the client settles the bill. That makes managing your Accounts Receivable (AR) aging schedule critical to survival. But how do you know if your outstanding invoices are normal or a sign of trouble?  Understanding key AR aging benchmarks, and where your service business stands relative to industry standards, is the first step toward reclaiming your cash flow and protecting your bottom line.This article walks you through the 30-60-90 AR Health Check and what healthy numbers look like for your business.

CONTACT US

Contact Us