By Steve Marrer

Most of us can’t predict when a recession will occur, but all of us can implement ways to prepare for its impact. Winter is coming!

Economists generally define a recession as a significant economic decline in Gross Domestic Product, and increased unemployment, for two consecutive quarters. Since the coming recession of 2020 was precipitated by state-mandated shut downs of entire industries coupled with mandatory stay-at-home sequestrations, it is likely that this recession will appear sooner than two quarters and last for a prolonged period. Some economists suggest the 2020 recession has already started.

Here are some steps businesses should take to help protect against the effects of an impending recession:

  1. Protect cash flow and manage profitability. Manage invoicing and collections intelligently; take actions to speed up invoicing and encourage prompt payments from customers and clients.
  2. Identify your best customers and implement strategies to win your competition’s customers. In the event of a downturn in business, be ready to allocate resources to retain your best customers. Study your competition, canvass your customers and determine what you can do to lure their customers into becoming your Develop a strong presence on social media to further enhance these efforts.
  3. Reserve cash and access capital. Building a cash reserve that can be used during bad times can buy you time and options. But cash in the bank will not help you grow. In order to do both at the same time, you will need to access capital by using flexible financing like a line of credit. Be aware that lenders have been known to cancel or reduce availability under lines of credit – or require new conditions to advances – during recessions.
  4. Be prepared to discontinue unprofitable products and services. In order to be prepared, you need to spend time now identifying products and services that are inefficient, dispensable, obsolete or not creating value.

As far as protecting you and your family, here are a few practical tips:

  1. Declutter your home and augment savings. Open those boxes from your recent move and get ready to sell those items you no longer need or want, and use the proceeds to augment your savings. Or, donate those items for tax deductions. Either way, you create a nicer home environment and possibly enhance your emergency fund.
  2. Reduce debt and increase savings. You need to try to do both within your means. First, take steps to increase savings to a comfortable level, and then focus on reducing credit card, medical and other controllable debt.
  3. Streamline living expenses. As a smart person one said, it is better to act out of choice than to react out of necessity. Choose now to keep a budget and track your spending; that way, you can be ahead of the game when bad becomes worse.
  4. Assess your investment strategy. Meet with your investment advisor to determine if your portfolio is built to withstand, or respond to, the recession.
  5. Don’t panic and don’t let fear become the driving force in your decision making.


Watch for our upcoming article on the differences between the 2008 and 2020 recessions. In the meantime, if you have any questions or would like to discuss further, please reach out to Steve Marrer at or 216.736.7267 or contact any of our Banking & Finance professionals.