How to Spot a Recession and How to Thrive During One
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How to Spot a Recession and How to Thrive During One

Dating back to the time of the Articles of Confederation, the U.S. has faced 47 recessions. Recessions are rarely credited as being a high point of economics. In fact, recessions typically result in business income losses—but a recession doesn’t have to be all bad.

If you know how to spot a recession and how to thrive during a low economic period, you can come out on top. Having a California resale certificate and making smart business decisions, such as stocking up on inventory, can set you up for great success during and after a recession.

What Is a Recession?

In simplest terms, a recession is when the economy experiences significant declines that last at least six months. So, what happens during a recession to cause the economy to decline for months on end? During a recession, employment and income decline, along with real gross domestic product, manufacturing, and retail sales.

Because a recession takes months to develop, there are many impending signs that indicate the economy is on the decline. One of the first signs that a recession is on the horizon is a loss of manufacturing jobs. When manufacturers stop hiring, it causes other sectors of the economy to slowly come to a halt.

Other signs of a looming recession include:

  • A drop in employee salaries and hourly wages
  • A decrease in consumer and business confidence
  • The unemployment rate increases or stays the same
  • Inflation
  • A decline in home sales

Now that you know the recession definition and ways to spot a recession, the next step is to know how to thrive in a recession. Though many businesses fail during low economic times, with enough preparation you can come out on top.

How to Survive a Recession

Recessions are typically hard on most businesses in all sorts of industries, but there are some industries that do fairly well during an economic decline. For example, discount retailers such as Walmart are able to profit during a recession by offering cheap must-have goods to consumers.

Other profitable businesses in a recession include:

  • Tobacco
  • Alcohol
  • Companies that repair, upgrade, and maintain existing systems and equipment
  • Healthcare and pharmaceuticals
  • Technology
  • Social media/marketing

Running a company that falls into one of these business industries can increase your chances of surviving an economic decline.

How to Make Money in a Recession

A recession isn’t all bad. In fact, it’s during the low points in business when companies see their inefficiencies and find ways to fix them. Recessions are a great time to “trim the fat” by reducing excessive spending and making smarter business decisions.

When the economy is down, it’s the best time to purchase products and stock up on your inventory. Because prices are typically low during a recession, you can get the most bang for your buck. This way, when the economy goes back up, you have all of the stock you need to account for increased demand, all while selling at a higher profit margin.

You can also make money during a recession by focusing on liquidity, finding new ways to increase profitability, and restructuring your marketing and communication channels to keep customers around for long periods of time.

With a recession-proof business, you can worry less about the economy and have the peace of mind that you’ll come out ahead.

How to Make Money in a Recession

Apply for a California Resale Certificate Today

No matter if the economy is booming or we’re facing a recession, you can always benefit by having a California resale certificate. A resale permit allows you to purchase products from distributors and wholesalers and then resell them.

As a reseller, you can restock inventory during a recession and make big bucks once the economy turns around.

Avoid the tedious process of applying for a resale permit in California and, instead, use FastFilings. We offer an online tool that enables you to quickly and easily apply for a resale permit in the state.

Source:

  1. https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

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