As many businesses are focused on the possibility that the country could be heading into a recession, BMSS conducted a survey to gauge clients’ feel about where their businesses are currently and what steps they are taking to mitigate the effects a recession may bring. The results that we received are encouraging overall. Of the responses, 62 percent of clients said that their business is doing well, while 35 percent said they are okay for now and only three percent are currently experiencing a downturn.

Of those surveyed, what do our clients find is the biggest struggle right now?  Retaining employees came in at number one, followed closely by inflation and supply chain issues. But those are not the only issues facing these companies. The possibility of increasing taxes was mentioned as well as winning contracts, travel-related issues and finding new employees, not just retaining them.

If you attended our webinar, BMSS Presents:  An Economic Update with Anoop Mishra and John Norris, you know that the signs economists use to measure a recession are mixed. On the one hand, U.S. output has declined two quarters in a row, a significant indicator of a recession. However, the jobs report for July was issued last Friday and greatly exceeded expectations by registering a strong 528,000 new jobs while the unemployment rate fell to 3.5 percent, one of its lowest levels in decades. This sends confusing signals as more people are employed but costs continue to rise.

So, while we may or may not be in a recession–and may not know until well into next year–there are steps our clients are taking to help their businesses weather an economic storm. According to the survey, many businesses are taking a multi-pronged approach. 52 percent of respondents are examining and evaluating operating costs as well as building a cash reserve to get through a lean period. Working to be adaptable by listening to customers’ and employees’ needs ranked next highest at 48 percent. Reviewing cash flows to determine where adjustments can be made came in at 34 percent and establishing credit worthiness rounded out the top five. While these are not the only steps a business can take to prepare for a recession, they can provide a strong foundation for the ups and downs that economic uncertainty brings.

If you would like to discuss available measures your business can take to withstand an economic downturn, please contact your BMSS professional. We can sit down with you to determine a viable course of action that is tailored to your specific circumstances. Contact our office at (833) CPA-BMSS or visit our website.

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