Worried About a Recession? 5 Things Your Business Can Do Right Now

There’s been plenty of talk about a possible recession. And while no one can predict exactly what’s coming, forward-thinking business owners are already asking the right question: Are we ready?

Economic slowdowns test more than just your bottom line – they reveal how well your business can adapt under pressure. It’s also not always the biggest or fastest-growing companies that succeed. It’s the ones that are prepared: financially disciplined, operationally agile, and thinking a few steps ahead.

As a virtual CFO, I work closely with leadership teams to cut through uncertainty and bring structure to decision-making. From managing cash flow and scenario planning to identifying risks and opportunities, my role is to provide clarity and direction when it matters most.

Whether or not a recession hits, here are five ways I’m advising clients to prepare today:

1. Cash is Everything: Tighten Liquidity & Cash Flow

In a downturn, cash becomes your most important resource. You need a clear picture of what’s coming in and going out – and a long enough runway to make strategic decisions.

Start with a conservative cash forecast. Whether it’s weekly or monthly, map out how much runway you have, or how many months of fixed costs you can cover if revenue slows.

Then, pressure-test your plan. Run a few “what if” scenarios: What if sales drop by 10%? 25%? Or more? Seeing the potential impact in advance allows you to make smarter decisions now, and before you’re forced to react in crisis mode.

At the same time, you can take steps to protect your cash by:

• Speeding up collections from customers
• Delaying or pause any non-essential spending
• Pushing out capital projects that can wait

2. Be Intentional About Spending: Understand Your Cost Structure

Now is a great time to take a closer look at where your money is going. The goal isn’t just to reduce costs – it’s to create flexibility so you can adapt quickly if things change.

Start by identifying which expenses are fixed and which are more flexible. Understanding where you have room to adjust gives you options if revenue slows. For example, reach out to vendors – you might be able to renegotiate payment terms, request discounts, or pause certain services if your needs change.

Additionally, if you’re planning to grow your team, consider the impact of pausing or slowing hiring for roles that aren’t critical right now. Compensation structures like bonuses or commissions may also need to be revisited to reflect current priorities.

Finally, rather than relying on last year’s budget as a starting point, try building a new plan from the ground up. Think through what’s truly necessary today and align your spending with your current goals and forecast – not last year’s assumptions.

3. Set Up Financing Now – Before You Need It

If there’s one thing I’ve seen time and again, it’s this: the best time to secure financing is before things get tight.

If you don’t already have a line of credit, now’s the time to apply. If you do, review the terms to ensure it’s enough to carry you through a rough patch. Even if you don’t plan to use it, having that safety net in place gives you valuable options.

Also, review your loan agreements and investor terms – what happens if profits drop or liquidity tightens? Will you still be in compliance? It’s better to catch any issues now than to scramble later.

4. Focus on Your Best Customers & Keep Revenue Steady

During a slowdown, holding onto your best customers becomes more crucial than ever.

Start by identifying your most reliable and profitable accounts, then prioritize nurturing those relationships. Keep in regular contact, offer flexibility when needed, and show your commitment to their success.

At the same time, it’s wise to think about diversification. If your revenue relies heavily on one industry or customer type, explore ways to broaden your base. And stay alert to early warning signs, such as late payments or reduced usage, as they often signal bigger challenges ahead.

5. Don’t Just Hunker Down – Stay Strategic

Overall, being cautious is smart, but don’t let fear stop you from moving forward.

Stay in touch with investors, advisors, and your network. There may be opportunities to partner, acquire, or expand at a lower cost. Just remember to be clear about what matters most and where you want to go.

Lastly, focus on protecting the parts of your business that create long-term value, such as your best people, your customer experience, and your growth initiatives. The goal isn’t just to survive, but to emerge stronger on the other side.

Ready to Prepare Your Business for Financial Uncertainty?

Recessions test more than your numbers – they challenge your preparation, leadership, and ability to adapt. The good news? You don’t have to wait for signs of a slowdown to take action. Now is the time to assess your position, strengthen your finances, and build a plan that offers flexibility – not just to survive a downturn, but to come out of it even stronger.

If you’re unsure where to start or want a fresh perspective on your strategy, let’s talk. Helping businesses anticipate risk and prepare to grow is what we do.

Wolf’s Outsourced Accounting Solutions (OAS) deliver expert financial management tailored to your business needs. Our team supports you with cash flow forecasting, financial reporting, and strategic insights – giving you the confidence and agility to navigate uncertainty and focus on growth.

Contact our team today to learn more.