The enterprise value specialists at Ceibass have been watching closely what the experts have to say about our economy and recession. “We’re already in one,” “Spring 2023,” “High inflation, low unemployment, Fed raising rates – hard landing,” “Soft landing,” “Not likely,” “Looming,” “Slowdown not Recession,” “On the brink” there are a lot of interpretations floating around out there. What should owners of lawn and landscape companies be doing?
“Given the current headwinds, recession in the coming year or so is more likely than not, but no one really knows. It would be prudent to at least start your thinking and strategizing about what you would do if we entered one” said Tom Fochtman, Ceibass CEO. “The best way to survive a recession is to be prepared ahead of time … to be recession ready. That’s hard to do when things are going full throttle, and the current year is looking good. So, to get you started in your preparation here are some ideas to consider. Think worst case so it can only be better if the economy does not get too bad.”
- Cash flow is king during a recession. Focus here.
- Look at how you might restructure your debt more favorably.
- Greatly improve your invoicing and collections. Beware slow-paying receivables.
- Check on the creditworthiness of new customers.
- Look into getting credit or more favorable terms from your suppliers.
- Get stricter with costs. Start cutting out the fat. As good as the economy has been, you have fat.
- Don’t’ get stuck with inventory. This is a tricky one given supply chain problems.
- Start looking at how you will streamline operations.
- Which unprofitable products or services will you get rid of?
- Make sure you keep your sales and marketing efforts going.
- Get closer and closer with your best customers.
- What metrics will inform you, specifically, of a recession?
- Stay close and engage with your best employees.
- Recast forecasts as needed.
- How will you trim your workforce if you need to?