Why Small Business Cannot Grow
Business is just like a tree. You have to nurture it so that it will grow. Without nurturing, you never receive the juicy fruits from the tree or even have a shade tree. However, the bad news is business is not as simple as growing a tree. It is a competition for you to grow your business. You have to grow it fast. If not, your competitors will surpass you and your business will be in hot water.
Now you know why many businesses are suffering. In most cases are due to the slow growing of their business.
Below are the top 5 reasons why small business cannot grow:
Don’t Worry, Recession has Benefits Too
Every day, you hear a lot of news from media around the nation about recession. You have found that your colleagues, neighbors, friends and people around you are worried about recession.
Recession is really a word that can make people worry. However, if you are doing well in your personal finance, you won’t worry that much about this. In fact, recession also has its own benefits.
Let me show you the benefits:
1. Recession makes people frugal. One of the reasons people worry about recession is because their personal finance is not strong enough to fight with recession. The good news is worry can make people change. Many people will learn the lesson and be more frugal.
2. Recession helps people think about their finances. I hope that people can learn their lesson from a recession. If you are worried about recession, this is because your personal finance is not recession-proof enough. So you have to sit down and think properly what you should do to manage your money in a better way. At least you can prepare for the recession in future.
3. Low Interest Rate. In order to help the market, Federal Reserve has already cut down the interest rate several times. If you read my article Federal Reserve Interest Rate Cut and Your Personal Finance, you will know its effect on your money. At least, credit card and mortgage interest rates will drop and this is good news for a lot of people.
4. Inexpensive Stocks. For some investors, recession can be good news for them. Stock market drops badly during recession period. So investors will jump into the market and buy those low cost stocks. When the economy goes back to normal, the stock price will raise and they make money from this. This is a cycle of generating wealth.
5. Great Deals on the market. Just like stock market, many things in the market will be affected and drop in price. So if you are well prepared financially and have plenty of cash, you can get a lot of great deals on the market. Currently housing market is dropping. You can pay attention on it and you might find 1 or 2 good deals for your real estate portfolio.
6. Win your business competitors. I don’t really wish to say this but this is the time you can beat your business competitors and stand out the crowd. Many businesses are slow or even closed down during recession. So if you can do something to boost and maintain your business, you will win your competitors and stand out in the market.
Recession can be good or bad
Like most of the things in this world, recession can be good or bad. In fact, I heard before that recession or bad economy period is a time of wealth exchange. Some people will be poorer but some people are getting richer. This is all about your financial literacy and how well you prepare your finance for this tough time.
How to Prepare for Recession
We don’t know whether recession really hit the nation. It is professional economists’ job to research and analysis whether we are really in recession right now. In fact this is not really important for us. The most important thing right now is we should take action to recession-proof our finance and prepare for the recession.
Just like our body. It is more important that we protect and keep our body healthy. Once we make it, our body will hardly get sick. In most cases, prevention is the best.
So let’s take some simple steps to prevent ourselves from suffering financially during recession.
11 Steps to Prepare for Recession
For Your Personal Finance:
1. Keep and Save an Emergency Fund. Emergency fund is the most basic requirement that you must do in order to proof your finance against any financial disasters. It is recommended that you save at least 6 months of your living expenses as your emergency fund. However, if you are tight in budget, you should at least reserve 1-3 months of emergency fund for recession. The more you save, the more security you have during recession period.
2. Spend Wisely. Start a budget and spend your money wisely. Try to live below your income and not your credit. If recession really happens, you will need to tighten up your budget so that you have more money each month to pass the hard time.
3. Reduce Your Debt. I always recommend people around me to reduce their debt as much as possible especially credit card. Debt is just like a bomb and it can burst anytime and ruin your life. It is ok if you are having a job or income to support it. However, it will be a nightmare for you if you are downsizing or in the recession period. So reduce it and make it under your control.
4. Keep an Eye on Your Investments. If you are investor, you may want to put at least some of the nest egg in a safer place. Recession usually hurts stock market. Nowadays, real estate market is not really stable as it is one of the causes of recession. So maybe you should retreat your money from those 2 investments options. Bonds usually do better in recession and it might be a good choice for you.
