by Henry Ma, CEO of Ricoma International
Although the United States is not yet in a recession, recent economic downturns over the past several years following an unprecedented global pandemic have led some economists to predict one may be on the horizon in late 2023 or 2024. The economic uncertainty that accompanies a recession can cause many who own home-based businesses to question whether or not they should continue their ventures, scale them back, or even shut them down altogether.
There is no need for self-employed people to fear economic upheaval, however. With a solid plan, those with home-based businesses can ride out a recession and come out on the other side successful and financially secure.
With Ricoma’s embroidery machines and custom apparel decorating equipment, we’ve been able to help many people begin their own businesses from their homes creating custom clothing. We have also been able to watch many of these businesses weather tough economic times with strong budgeting, marketing, and an eye on protecting their interests.
Here are some tips that can help guide self-employed people through whatever the economy throws at them.
Diversify your revenue stream.
When the going gets tough, the tough need to start getting creative. A knee-jerk reaction may be to stop developing new product lines, but that is not the way to go with a recession on the horizon.
Diversifying your product offerings and revenue streams allows you to open doors to more money-making opportunities. In doing so, you also open yourself up to an expanded customer base.
Be flexible and adaptable.
As the economy shifts and the market changes, those who operate their own home-based businesses need to be ready to be flexible and adapt. Part of this involves the diversification of revenue streams, but another part of it involves saving and spending when and where it matters most.
One sign of adaptability is investing in new equipment so you can bring customers products that they want to purchase when trends in the consumer market shift, which you can prepare well for by saving money and using those savings prudently. Recessions have a way of eating away at savings that may otherwise simply stagnate in bank accounts, but it’s often far more beneficial to divert those funds back into the business.
Continue to market.
Yes, marketing costs money, but so does any core investment in the health of your business and customer base. Continuing to market through economic downturns will allow past and current customers to remain aware that you are still providing services and products, as well as entice new customers to keep your home-based business thriving — even through a time of recession.
Businesses need to leverage social media, as this provides a cost-free way to engage with your target market. Additionally, make sure you keep your business’s website running and up to date so customers know where to find and contact you.
Keep it focused on the customer.
When times get tough economically, it can be easy to panic and withdraw from what should be the cornerstone of any business — the customer. But when home-based business owners are preoccupied with finances, that can trickle down to waning customer service.
Home-based businesses cannot afford to lose sight of their customer service approach. Through regular communication, continued marketing, and excellent engagement, businesses can let their customers know that they are still valued and appreciated. Customers will remember how a business made them feel, and will continue to patronize those businesses, even during tough economic times.
During a recession, a positive mindset can mean the difference between a company that thrives and one that fails. By keeping your mind on future plans and continuing to invest in and grow your home-based business, you can weather the impending storm and keep your business running strong.
Henry Ma began his career in the finance industry with Investment Banking at Goldman Sachs. Joining Ricoma International in 2015, Ma recently grew into the CEO role after helping the company quintuple its revenue in five years as COO. Ma hosts the Apparel Academy show on YouTube and is continuously striving to be a thought leader on entrepreneurship, digital marketing, and social media.