How to Prepare Your Small Business for Hard Times

When you’re running a small business, there will be good and bad times. Especially for startups, getting an enterprise established and profitable can feel like an uphill climb.

Weathering the storm during the likes of an economic downturn or personal crisis can make or break your venture.

While big companies generally have a solid infrastructure and large pool of resources, smaller firms are less equipped to deal with potentially business-ruining events.

However there are steps every entrepreneur can take to better prepare for tough periods.

Financial planning

It can be easy to get into a cycle of living for each month when running a small business – especially when there are unavoidable costs such as rent and bills to keep up with.

While having a healthy cash flow to handle business finances is essential, it doesn’t take much to rock the boat and quickly send you into uncontrollable debt and arrears.

And it’s not just poor sales that can cause havoc with your finances. Even if you’re doing everything you can to keep going, you can’t always control negative external factors.

Late payments from clients, sudden sharp price increases from suppliers, unreliable employees and soaring petrol costs are just a few scenarios that can put a serious strain on your business.

This is why financial planning can mean the difference between staying afloat during hard times and going under.

The key is to have a business model that takes into consideration the worst scenarios rather than the best.

Always having a pool of emergency cash on hand to cover unexpected costs, whether this is from your personal savings or credit, is ideal.

This could be anything from arranging an overdraft facility with your bank to taking out a business loan to prop up your finances while you’re getting up and running or riding out a dry spell.

Business insurance

Insurance for small businesses is specially designed to support you and keep your company going through those unexpected difficult times.

It’s impossible to predict the future so being organised with top-quality bespoke business insurance is the best way to prepare for a rainy day.

The type of cover you’ll need all depends on what kind of business you run. This is why each specialised policy put together by The Insurance Octopus is tailored to your individual requirements.

From public liability, professional indemnity and business interruption to buildings and contents insurance, you’ll get a package designed to keep your business running when those unforeseen circumstances strike.


The famous saying “don’t put all of your eggs in one basket” makes a lot of sense when applied to business.

Diversifying as much as possible by working in different markets and with a selection of clients is a much better option than investing too much in just one venture that would leave you vulnerable if something went wrong.

If you run a shop on the high street, creating other sources of income such as launching an online store, selling in popular marketplaces like Amazon and attending specialised events relating to your products gives you a variety of potential money streams.

This way, if one method isn’t working out, you have other elements to focus to help compensate.

Coffee shop owners might decide to run ventures on the side. This could be anything from taking a sandwich cart around local office buildings to creating an independent coffee brand.

Another option for diversification is exporting. Especially during times of a local or national economic downturn, it’s well worth exploring opportunities in international markets.

Get fully protected with bespoke business insurance from The Insurance Octopus. Request your quote today.