How to strengthen your business in tough economic times

As a business owner, you’ll be all too familiar with facing tough economic circumstances and market disruptions.

But this kind of volatility can have a damaging impact on your firm.

So how can you make sure that it is set up to withstand the impact of factors well beyond your control and able to make a strong recovery when conditions improve?

Strengthen cash flow management

Keep a close eye on your expenses and working capital, and make sure you have healthy cash reserves in place.

This can help to tide you over during periods when you’re making less money and make you less likely to get into debt.

Diversify your revenue streams

A business can be more vulnerable to economic difficulties if they only target a very specific market, so it’s well worth looking at what new areas and audiences you can get in front of.

By offering services that complement your existing offering, you’ll be less dependent on a single source of revenue going forward.

Focus on retaining existing customers

The cost of acquiring new customers is five times higher than the cost of retaining existing customers, so if money is tight, it’s well worth stepping up your efforts to make sure people on your books stay loyal.

Could the customer experience you offer be improved? Are you asking for customer feedback and taking it on board? Do you reward loyalty among your customer base?

Getting relationship management could be crucial in making sure you’re well set up for when the economy bounces back, so ask yourself these important questions.

Drive efficiencies across your business

It’s very likely that you’ll be wasting time and resources more than you need to in certain areas of your business.

It’s therefore well worth exploring how you can cut costs and streamline processes without compromising on any core functions of your business.

Review your debts

Take a look at any existing debts and consider refinancing options or renegotiating terms to reduce interest burdens.

Measure your business resilience

Create some theoretical scenarios that your business could face in the future, and think about how each one could potentially impact your business.

Once you’ve identified the possible consequences, you can create risk mitigation strategies that reflect them, so you’re prepared if these worst-case scenarios come to pass.

While we all hope to never have to deal with a serious economic downturn, it’s an inevitable aspect of running a business that you’ll probably face at some point in your career, probably more than once.

But while these slumps undoubtedly pose challenges, they also create opportunities, where you can adapt, innovate, drive efficiencies and boost your resilience and competitiveness.

So be proactive, assess the risks you could face and make sure you’re prepared for whatever the future may bring.

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The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK. Welby is a trading name of Welby Associates Wealth Management Ltd Company Registered Number NI630504 who is authorised and regulated by the Financial Conduct Authority, FCA register number 697372. The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren't able to resolve themselves. To contact the Financial Ombudsman Service please visit

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