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Could a Recession Be A Golden Opportunity for U.S. Small Businesses?

Operating smoothly one minute, going through a pandemic the next and now a slowing economy – it’s safe to say business owners have been on a roller coaster these past couple of years. Most small business owners say they see that the economy is starting to slow and are doing their best to prepare.

Many experts and analysts have recently and repeatedly warned that an economic storm is coming. After the unknowns and challenges of the pandemic, this is devastating news for the businesses still standing. Goldman Sachs, for example, has said there is a one-in-three chance of a recession in the next 24 months. 

Likewise, Deutsche Bank has warned that a “major” recession is at our doorstep and will hit in the coming months. Elon Musk has claimed that we’re already in a recession and we will continue to sit in the middle of it for another year and a half. And there’s certainly data that supports these positions.

Small business owners (62.7%) have already reported lower profits over the past six months, due to declining sales and higher expenses as inflationary pressures continue to rise, according to survey data from SCORE. Manufacturing and service growth have slowed considerably, and consumer confidence is fading as household debt continues to pile up.

Big corporations are notorious for using recessions as a reason to cut their payroll. Already, Facebook, Wells Fargo and Netflix have announced layoffs or “hiring freezes”. For the small business owners, this might actually be some good news. According to the National Federation of Independent Businesses, almost half of small business owners surveyed shared that they are looking for talent.

While there are many challenges during a recession, there are also upsides. For those who have practiced strong money management and kept a cushion of cash, it can present opportunities. Competitors may go out of business, presenting a chance to become a leader in the market. Assets become more affordable, teams become stronger, and government taxes do not increase.

One thing rings true: small business owners have faced recession before, and they can do it again. Making sure your business is in a strong position will help you use this downturn to your advantage, see opportunities and continue to fuel growth and big plans.

Michael Hollis is a Detroit native who has helped hundreds of business owners with their merchant cash advance iso solutions. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.

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