They say that a rising tide lifts all boats, but if and when the UK economy takes a turn for the worse, there are likely to be many small businesses that will struggle to stay afloat.

However, there are many steps business owners and managers can take prior to a downturn that can increase the chances of their business surviving (and even thriving) when the economy is tanking. Here are four things to get you started.

_{Inventory by Nick Youngson CC BY-SA 3.0 Alpha Stock Images}

1. Check your inventory management

You need to get a grip on your inventory management in order to ensure your business isn’t losing money unnecessarily, but you need to do so without sacrificing on quality.

Is there a better supplier? Is it cheaper to source products locally? Is it better to outsource work or be entirely self-sufficient? These factors can vary greatly from one small business to another.

Just because you’ve always used the same supplier or done things in a particular way, doesn’t mean you have to keep doing them like that. Perhaps there may be other ways to save you money.

2. Out-compete the competition

If your business is going to cope during an economic downturn, it’s important that you try to hang on to existing customers at the same time as attracting new ones.

How can you do this? By offering something more or something different from the competition. Research your competition and see what you can offer to entice their customers into becoming your customers.

3. Make the most of current customers and clients

Having regular and loyal customers can help to future-proof your business, but how do you keep existing customers coming back time after time?

One of the best ways to retain customers is by focusing on good customer service. It might also be worth looking into customer loyalty programmes, which help to incentivise customers to stick with you and even refer their friends. While these programmes are often associated with larger businesses there’s no reason SMEs can’t launch their own.

4. Insurance is key

There’s one thing that every business has in common: they’re all susceptible to a wide range of risks that could impact their business operations, whether it’s theft, damage and injury to employees or other liability claims.

Luckily, though, there are specialist insurance policies for almost every type of risk a business faces. If you own a workshop, for instance, you can get a workshop insurance policy that can protect you from a wide range of different commercial risks.

While there’s nothing that will guarantee that your business remains watertight in the event of a recession, it’s possible to take steps that will greatly increase the odds of your remaining afloat during turbulent times.

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