Economists are split on whether the recent economic downturn will become a full-on recession by 2024. Per Bankrate, 52% of economists were predicting an eventual slowdown, but that number has been steadily increasing since 2022.
Talks of a possible economic recession can understandably strike fear in the hearts of entrepreneurs with home-based businesses. Luckily, there are ways to ride out a recession and come out on the other side financially sound and viable.
“You don’t have to be an economist to know that inflation is causing problems for people across the country right now,” says Henry Ma, CEO of Ricoma, a leading manufacturer of embroidery and custom apparel equipment. “With prices skyrocketing and no end in sight, it’s understandable that many business owners are looking for ways to protect their business interests in times of economic instability.”
Building a resilient business
“During uncertain economic times, the natural inclination for business owners may be to pull back,” Ma says. However, Ma also mentions that this is not a viable strategy to protect the longevity of an entrepreneur’s business. If business owners let their cash flow stagnate and attempt to wait out any upcoming economic downturn, rising inflation will errode their purchasing power and eat away at their savings.
Instead, Ma suggests that home-based businesses fight back against rising inflation by investing. “Savvy business owners will invest in their businesses to bring in more customers and therefore more revenue,” he says.
Though home-based entrepreneurs should not stop investing in their businesses during economic upheaval, they must still maintain a focus on saving, paying down debt, and remaining open to pivots so they can seize opportunities when they arise. Businesses entering a time of recession should also regularly evaluate their expenses and see if they are being as prudent as possible with spending, saving, and investing.
Maintain a customer-centric approach
Even during a recession, customers who require your attention, service, and product are still present. “Home-based businesses seeking to weather a recession cannot afford to lose sight of the importance of their customer,” Ma remarks. “Businesses should maintain strong customer relationships through regular communication, whether through email, social media, or in person.”
As Ma explains, loyal customers are the key to keep your business prospering. “If you and your business continue to bring value to your customers’ lives and you continue to keep their happines a priority, they will ensure that your business stays afloat, regardless of the economy.”
Embrace the power of technology
During a recession, you cannot afford to overlook your company’s digital marketing, even if you’re trying to cut costs.
“It’s imperative that you maintain the visibility of your business during tough economic times,” Ma says. “As an entrepreneur with a home-based business, keeping your online presence and social media platforms running and active allows you business to maintain relationships with existing customers during economic downswings. It also allows you to reach new customers and demonstrate the continued health and viability of your business.”
For Ma, it all comes down to mindset. Recessions and economic downturns can lead to panic or feelings of defeat. “Business owners with the right mindset to invest in their businesses are the ones who come out on top,” offers Ma. “With an eye on inflation and the tools needed to grow one’s home-based business, even the smallest ventures can ride the uncertain waves of recession and come out on the other side successfully.”
Henry Ma is a business expert who has helped over 3,000 startups and established business owners in over 150 countries grow their decorated apparel businesses in his role as CEO of embroidery machine manufacturer Ricoma International. Henry is the founder of several online startups, including Garmeo, an order fulfillment platform for decorated apparel businesses, and is an expert on scaling businesses, content marketing, audience building, community management and more. As the host of Apparel Academy, a show on Ricoma’s YouTube channel, he offers insights and strategies for people looking for success in the decorated apparel industry.