Talks of a coming recession in 2024 continue. Will a recession occur? A former president of the Kansas City Federal Reserve Banks puts the odds at 65%. If so, will it be mild or severe? Economists differ on this prediction. How long will it go on (Forbes reported that the average length of a recession since World War II is 10 months)? So, a recession may or may not occur, it may or may not be severe, and it may or may not last the usual length of time. Given this uncertainty, it’s important to be prepared. One way to do this is to understand where your company stands now. With the year drawing to a close, pause to reflect on what occurred this year…and what you’ve learned from it…so you can plan for the future.
Value in lessons learned
Each business is unique, so it’s impossible to generalize what lessons should be learned. But for everyone: You don’t want to repeat mistakes; you do want to capitalize on successes. UCONN’s ITS Project Management Office offered this advice with respect to projects, but it can be extrapolated to all business operations:
“Lessons learned should not just focus on the mistakes that were made; they should also document the good things that happened in the project. Otherwise, all of the processes and decisions that helped the project succeed might be lost and that would be just as bad as forgetting about the mistakes that were made.”
Making an assessment
Take a close look at what transpired during 2023. Use your accounting software to create financial statements—a P&L, a net worth statement—that you can examine. Look over your calendar to remind you of events that transpired this year—sales you’ve held, trade shows you’ve participated in, etc.
Inventory your mistakes and successes. Did you launch a new product or service that failed or succeeded? Did you host an event that flopped or exceeded your expectations? Did hire too few (or too many) employees; did one or more employees not work out? Analyze what when wrong or right so you can avoid problems in the future while being able to replicate successes.
Review your numbers. Where do you stand now? Has 2023 been a good year? A bad year? Maybe your numbers suggest you need to raise prices, cut expenses, eliminate certain lines (e.g., an unprofitable item or service).
With the data from 2023 on hand, you can move smartly forward into 2024. December is National Write a Business Plan Month, and with good reason. It’s vital to have an updated business plan so you can begin the new year with correct metrics. Find valuable assistance in creating or revising a business plan from BPlans.com, including free plan templates, one-page business plans, and articles to help you. SCORE explains why you should update your plan and offers a template for a startup plan that can be adapted for your needs.
To best recession-proof your business, fully understand what’s happened thus far and prepare for the coming year.
As the Buddha said: “No matter how hard the past, you can always begin again.” Do it smartly!
Find more ways to recession-proof your business included in earlier published blogs.