The reality is that regardless of what business you are almost all business have been hit by the recession bug and/or have had some form of impact on its daily operations. The first common signs to seeing a recession is massive cost cuts and eventually this had led to thousands of lays off. 

At the end of the day businesses have had to make some hard decisions in order to survive this recession. Whether you have implemented a new structure in your business or taken the necessary steps to cut down your daily operation costs, one common factor seems to be on the agenda of every business. This is surviving financial crisis!

In this day an age almost all business have necessary costs such as the following

• Wages, Salaries and compensation
• Office Location Rentals
• Stationary and Office Equipment
• Utilities
• Marketing and Advertising Budget
• Travel Expenses

The list goes on and typically most business end up doing two things during economic hardships.

1-    Spend wiser

2-    Cut costs

At the end of the day this might be fruitful for some businesses but for some businesses it had a direct impact on results and the running of your daily operations. When a business isn't performing and isn't making the necessary revenue it makes it harder to run a steady business and hence a lot of small businesses have had to shut down or go under.

The secret to surviving an economic recession is a CASH RESERVE.  Most businesses today have either never had a cash reserve or depend on their monthly revenue or income to pay for their upcoming monthly expenses.

Small businesses sometimes end up chasing their clients, invoicing them and require checks to clear before they see this income coming in. If there is a delay to this income there is eventually a delay on payments on expenses and this can cause a major challenge in running a business.

A cash reserve is a pool of funds a business must have in times of emergency or crisis. This cash reserve must never be depleted but must be replaced whenever used. The purpose of this cash reserve is to avoid you taking credit or loans from your financial institutions.

When starting a business one must always create a cash reserve in time of economic business needs. It is also recommended to take 10-25% of your monthly profits and put it towards a cash reserve.

Lets face it in this day and age any business can be hit with an economic crisis. If you rely on your clients to pay you on time in order to pay the bills this might not work to your favor all the time. We all wished we lived in a perfect world with perfect clients that always paid of time. This however is a myth and never the case!

There are many strategies to survive this economic recessions but the first strategy is implementing a cash reserve. In the end prevention is better than cure!