As small business owners, you're well aware that the world of entrepreneurship is often a rollercoaster ride. But the twists and turns of 2024 promise to be particularly challenging, with the looming possibility of both an oncoming recession and the dark clouds of a potential global conflict. In the face of such uncertainty, it's essential to be prepared and chart a course that balances faith, level-headedness with smart decision-making. Here's an in-depth guide to help you navigate these treacherous waters:

1. Resist Temptation to Make Rash Decisions: Stay Smart and Level-Headed

Picture yourself as the captain of a ship navigating through a turbulent sea. In a storm, it's easy to make snap decisions, often driven by fear and anxiety. However, like a skilled captain, your best course of action is to stay calm and composed. Impulsive decisions can lead your business into uncharted and risky waters. Instead, take a deep breath, analyze the situation, and consult with trusted advisors. 

If you’re panicked, your team will be panicked and your family will be panicked. 

Its very, very easy to pull back, isolate yourself and begin the cycle of bad decisions.  Stay on top of what’s happening.  Run decisions by others that you trust.  Keep in mind the tone you set will have rippling effects on culture.  If you’re panicked, your team will be panicked and your family will be panicked.  That doesn’t help the picture in the slightest.  So remain calm, have faith and make the best decisions you can based on what you know today.

2. Don't React Too Early or Too Late: Timing is Everything

Timing is everything in the world of business.  Entrepreneurs must learn to discern the right moment to make adjustments. Reacting too early can cause you to miss opportunities.  If you start making painful cuts early there’s a potential that you will cut too deep and make unnecessary changes.  At the same time, reacting too late may leave you scrambling.  Its super-critical to keep your head on a swivel.  Stay up on current events.  Talk to people who are really tuned into the markets and the economy.  If you have an investment advisor that’s a good first call.  They live and die by trying to discern what lies ahead.  Bottom line, don’t get caught hitting the gas when the world is grinding to a halt.

3. Preserve Cash: Building a Solid Financial Lifeline

Think of your cash reserves as your lifeboat in the storm.  When looking ahead at the oncoming risks, be discerning about your cash balance.  Facing a recession or a global conflict is a good time to ensure you’re careful about large outlays of cash.  Avoid making substantial purchases or entering new markets without a clear plan.  If you’re evaluating a secondary location or a new fancy piece of equipment, it might not be the time unless that new investment will save you cash in the short term and help you operate more efficiently in the coming year. 

a. Aim for 90 to 120 Days of Operating Capital

Consider your cash reserves as a safety net for your business. Your goal should be to have 90 to 120 days of operating capital in the bank. This cushion will provide you with financial stability and flexibility, even when the waters get rough.

b. Stay vigilant about your Accounts Receivables

These are the lifelines of your cash flow. In uncertain times, your customers might struggle to pay their invoices. Be proactive in chasing outstanding payments to ensure a healthy cash flow that can weather the upcoming storms.

4. Create a Scaled-Back Cash Flow Model: Know Your Adjustments

Every business owner should know their business inside and out.  This includes a robust, detailed cashflow model that acts as a roadmap for all decisions that lie ahead.  Using that model create one that reflects adjustments to the company and how that will impact the bottom line and your cash position.

a. Know Each Necessary Adjustment. 
Plan your actions based on your financial Key Performance Indicators (KPIs). As things get more challenging, execute your plan based on the severity of the situation. Here are just a few ideas to consider in order to save money:

i. Cut Discretionary Expenses: Trim excess from your budget by eliminating discretionary items like food allowances, extravagant employee parties, and speculative marketing costs. Start by identifying luxury expenses that can be cut without jeopardizing essential operations.

ii.  Renegotiate Vendor Contracts: Look at contacts that haven’t been touched in a while.  Examples might be your cell phone plan.  You could be paying $50 per month while there are unlimited plans for as low as $10 now.  If you have 20 employees on cell phones that can add up.  Also, look at supply or platform vendors.  They know a recession is looming as well and won’t want to lose customers either.  It’s a good time to evaluate pricing and terms that you haven’t looked at in a while. 

iii. Headcount Reduction: Identify the positions you may need to cut but do so with care and empathy. A thoughtful approach to staff reduction can help you retain valuable talent while making necessary cost reductions.  The staff you need during times of growth aren’t necessarily the team you need while buckling down to weather a storm. 

iv. Freeze All Raises: Implement a freeze on raises and cost-of-living increases until the storm passes. Communicate this to your team and emphasize that it's a collective effort to secure the company's future.

v. Shared Sacrifice: Consider wage cuts across the company, but do so with transparency. It's essential to convey a sense of togetherness and unity during these challenging times. Owners should lead by example and participate in the wage cuts, demonstrating that everyone is in this together.  That will go a long ways compared to your team thinking your making them take cuts while you keep your full salary.

5. Focus on Moderate, Cost-Effective Growth: Steady Progress is Key

During economic uncertainty, it's often wiser to pursue moderate, cost-effective growth verses expensive high growth that you might get away with in a booming economy. Conversely, completely pulling back on growth can lead to a churn of customers and eventual setbacks. If you completely go off the grid your customers may assume you’ve folded and move on.  Find opportunities for growth, even if they are modest, to keep your business moving forward.

6. Stay Generous: The Macedonian Model

Even in the most trying times, resist the urge to hoard and cling to resources out of fear. Just as the Macedonians in the Bible gave generously out of their poverty, maintain a spirit of generosity.  God knows where you’re at in your business. 

Stay generous, seek first the Kingdom and the Lord will be faithful in whatever way he knows is best. 

He is not surprised by global events or recessions.  He can take care of you.  You just need to remain faithful.  This generosity can extend to your team, customers, and most definitely your church.  Nothing is more important than keeping the church open and ready to serve as a beacon during hard times. Stay generous, seek first the Kingdom and the Lord will be faithful in whatever way he knows is best.

7. Keep Perspective: Faith and Resilience

In the midst of economic uncertainty and global instability, it's crucial to maintain perspective. Remember that your business journey is just one part of a much larger narrative.  God is in control. Reflect on the bigger picture.  If you lose perspective, you will undoubtedly make poor decisions that might cost you down the road.  Try and look at things from the 10,000 foot level and not from a microscope view of whats happening.  Keep sound, wise voices in your circle and bounce ideas off of those people.  The more you talk, the more you collaborate the better you will feel and the more perspective you will have. 

In 2024, the small business journey may be a challenging one, but with faith and some sound planning, you will have a lot more peace and certainty that things will be fine on the other side.