You have your own business? Here are 5 strategies to withstand crises

Although the recession during economic crises lasts for most companies, careful preparedness can make a huge difference.

In a report in Forbes magazine, writer Serenity Gibbons reported that if you want your company and project not to be affected by these crises, you should follow these five strategies.

1. Diversification of income sources
The writer has shown that the recession can affect the supply network, which is why you should not rely heavily on a small number of customers, and it is best to ensure that you have a diverse customer base.

Keep in mind that if a customer represents more than 10% of your business or if your top five customers account for more than 25% of your business, you need to diversify your revenue.

There are plenty of options to expand your customer base, where you can expand into other markets or increase your marketing budget for the next year. In addition, you should look for ways to build new relationships with a different group of customers and to increase your revenue.

2. Reduce expenses
You should prioritize an economic downturn, and every businessman should be able to identify the expenses that are wasting money without promoting growth. Knowing the difference between estimated and necessary expenditures is critical.

"When there is financial instability, whether it is because of a deficit in the economy or the company, the first step to take should be to reduce discretionary expenses," says Sabina Gault, chief executive officer of Connaught Agence.

She added that the second highest expenditure spent by most companies after salaries, often earmarked for rent and bills, so try to think when faced with any other financial pressure, to rent a smaller area to make up for those expenses.

And you can do without some services like online advertising and other services, and when the market is going through very harsh conditions, you can reduce your budget.

3. Saving money
When it comes to preparing for the recession, the conventional wisdom of saving money can apply to businesses. Who knows when a liquidity crisis occurs or when banks tighten their lending.

In this regard, startups must establish a contingency fund or budget to overcome the recession, a separate savings account that can help them cover expenses from three to six months.

4. Reduce inventory size
The writer advised companies to reduce the size of inventory during financial crises and fluctuations.

5. Control of debt
Debt accumulates when there is a fiscal deficit, which you will have to pay when you raise money. In fact, you should first pay off loans that have high interest rates, then move on to pay back other loans. It is also important to control your debts with sellers or the amounts your customers owe you.