Small business owners have likely heard the words “soft landing” tossed around in recent months by analysts as the risk of a recession has declined. While entrepreneurs may be encouraged by the news that the economy may avoid a recession, the actual effects of a soft landing are very different than one might think.
On this episode of The Small Business Show, host Shyann Malone is joined by LJ Suzuki, fractional CFO, president of CFOshare, and small business expert, to discuss what a soft landing is really like and how entrepreneurs can prepare their business for the coming months.
Key Takeaways
1. The economy may achieve a “soft landing,” reducing inflation without holding back growth to the extent that a recession occurs. Suzuki warns that soft landings, while better than a recession, present challenges of their own that small business owners must be aware of if they are to survive.
2. During a soft landing period, small businesses may face stagnating revenues, increased competition, and potential market contractions. Businesses should focus on survival, maintaining market share, and preparing for future growth once the economy stabilizes.
3. Suzuki places emphasis on the need for small businesses to stay connected with their market and customers. Establishing feedback loops and understanding customer demand will be crucial for navigating uncertain economic times and adapting to shifts in market dynamics.
4. Suzuki discusses how businesses can assess the strengths and weaknesses of competitors during economic slowdowns. Identifying and seizing market opportunities, even during tough economic periods, can help them gain a competitive edge.
5. Suzuki stresses the importance of maintaining positive cash flow and being cautious with investments during uncertain economic times. Businesses are advised to be disciplined, avoid risky expenditures, and make well-considered decisions to ensure stability and longevity.
"A soft landing is not a boom economy. It's not good times with lots of spending and rampant growth." — LJ Suzuki
