Practical Moves to Survive (and Grow) During a Business Downturn

Running a business isn't always smooth sailing. From economic downturns to supply chain issues, even the most prepared companies face challenges that test resilience, leadership, and adaptability. Whether you're navigating your first major setback or managing through your tenth, knowing what actions to take — and in what order — can make all the difference.

Quick Checklist: Early-Stage Action Plan

Here are five initial steps to stabilize and assess your business during a challenging period:

• Audit your financial position. Evaluate cash flow, debt obligations, and high-cost liabilities. Consider using tools like QuickBooks or Xero to quickly visualize spending patterns.
   

• Reforecast revenue projections. Adjust short- and mid-term expectations using updated customer demand data.
   

• Prioritize spending. Shift from “nice-to-haves” to core operational essentials. For ecommerce, ShipBob offers cost-efficient logistics with flexible pricing tiers.
   

• Communicate internally. Transparency with your team builds trust — especially when you're asking them to weather uncertainty.
   

• Engage your accountant or advisor. If you don’t have one, Bench offers fractional finance professionals tailored for small businesses.

Tap Into Local Partnerships (Early)

One overlooked way to build resilience is through strategic partnerships. During uncertain times, teaming up with other businesses in your community can reduce costs, expand reach, or create shared marketing opportunities. Whether you're co-hosting events or sharing logistics, partnerships can generate mutual lift without large capital outlays.

Before formalizing the relationship, check this out — a simple memorandum of understanding can help set expectations. This nonbinding agreement outlines the intended actions of both parties and helps ensure clarity from the start.

Matching Business Challenges to Recovery Strategies
 

FAQ: Navigating Business Setbacks

Should I cut staff right away to conserve cash?
Not always. Before layoffs, assess fixed vs. variable costs, renegotiation opportunities, and temporary adjustments (e.g., reduced hours). Also consider whether staff cuts will reduce your capacity to generate revenue in recovery phases.

How do I manage customer expectations if I’m behind schedule or limited in supply?
Communicate early and often. Use your email list, site banner, and SMS. Customers are more forgiving when they're not surprised. Tools like Postscript or Omnisend are helpful for consistent updates.

Is it better to seek a small business loan or reduce expenses?
Depends on runway and growth potential. If you’re confident in a rebound, a line of credit from Fundbox or similar providers may help. But if the downturn reflects systemic issues, reducing overhead is often the safer move.

Should I discount aggressively to boost sales?
Selective discounting can work — especially for clearing overstock. But avoid eroding long-term value perception. Bundles, free shipping thresholds, and loyalty incentives tend to perform better in uncertain markets.

Highlighted Product: Gusto

If you're navigating payroll stress, tax uncertainty, or changing team structures, Gusto makes it easier to manage HR, compliance, and contractor payments in one dashboard. It's a smart move for businesses scaling up or tightening up.

Final Thoughts

Tough times don’t always mean shutting down — but they do demand strategic clarity. By aligning with your core customers, cutting with care, and engaging external supports early, you give your business the best chance of not just surviving, but evolving.