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What a Recession Means for Oregon's Small BusinessesSalem-News.com Business
Why the odds of a recession are going up and what is means for Oregon's small business owners
(SALEM, Ore.) - Why the Odds of a Recession are Going Up and What It Means for Oregon’s Small Business Owners
While the national press might not have picked up on it, the Federal Reserve’s decision to purchase more than $275 billion in repurchase agreements from September 17 and September 20 has concerned market observers.
Granted, the Fed’s activity hasn’t yet impacted businesses on main streets, but observers noted that this is the first time the central bank has taken such extraordinary actions since the start of the Financial Crisis in 2008.
What is driving the move? For starters, the normal trading of repurchase agreements – which is a form of borrowing between banks – almost stopped earlier in the week. Beyond this, economic risks such as signs of a slowdown in export-driven economies such as China and Germany are starting to impact the global economy are starting to take their toll.
On September 20th the President of the St. Louis Federal Reserve, James Bullard, noted: that U.S. economic growth is expected to slow. This has sent odds of a recession skyrocketing, even as the current economic expansion has continued.
Gone are the Goldilocks days of 2017 when it seemed the market would continue to go up forever and disparate economic indicators have left many observers scratching uncertain about what comes next. Added to this is this on-again, off-again trade talks between China and the U.S. and the never-ending drama which Brexit has turned into.
Though many small businesses might think they are immune from these issues, the risk to the broader economy has been growing in recent months. This could not come for a worse time for employers in Oregon and across the country, many of whom have been growing the businesses.
The expansion has been going on for so long that many small businesses might not remember what it was like to go through a recession. To make matters worse, businesses in small towns, including those in Oregon, have only just started to benefit from an expansion which has benefited big companies in large urban areas.
As such, small business owners are starting to think about what they can do to protect their business in the case of a slowdown. This includes looking at ways to cushion the blow in case their sales slowdown including balancing labor costs, inventories, and even how to manage their cash flows.
In the case of the latter, research indicates there has been a spike in small business owners considering taking out a loan. This includes getting loans from banks and even brokers such as www.quickloansdirect.com/. One reason is that interest rates – for the time being – remain low and this has been an incentive for business owners to consider taking on debt at this moment.
However, this strategy is not without risk as many small business owners struggle to manage their cash flows even when times are good. On the opposite hand, increasing access to credit before an economic disruption is often seen as a way to make sure a business owner has the cash they need to weather the storm.
In addition to considering financing to secure their businesses, small business owners are also looking at ways they can grow their customer base. This starts with making sure they are keeping their current customers happy as they can be used to help word-of-mouth marketing activities.
Social media has also started to play an important role in customer interactions as business owners can use the platforms to not only communicate with their customers but also to amplify the message their customers are sending.
These activities can let customers know that you are interested in then while helping your business to seem more authentic to potential customers.
Another strategy many small businesses are utilizing is to leverage online sales platforms to expand their reach. While this includes the integration of an online store on their website, it doesn't end there as small business owners also need to leverage the power of sites like Amazon and Etsy to gain access to more customers.
While this doesn't work for businesses which have to overcome logistics issues, it is a great way for others to move beyond traditional geographic barriers.
Experts say it is only a matter of time before another recession hits the country. If you want to protect your business from financial loss, then you need to start by recognizing that the odds of a slowdown are increasing and then take steps to make sure your business is in a good position to weather the storm.
Source: Salem-News.com Special Features Dept.
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