3 Smart Steps to Recession Resilience for Small Businesses

Small businesses are the backbone of the U.S. economy. According to the U.S. Small Business Association (SBA), small businesses make up 99.9% of all U.S. businesses—and employ nearly half of all private sector workers. 

Beyond job creation, small businesses are hotbeds of innovation and tend to be more agile and adaptable than larger corporations. Ultimately, it’s smaller enterprises that drive technological breakthroughs and innovation, fueling economic growth and competitiveness.

Despite their vital role, smaller enterprises are more vulnerable to economic downturns

As the U.S. grapples with economic turbulence like recessions, pandemics, and soaring inflation, the imperative for small businesses is clear: Find innovative ways to grow revenue while controlling expenses and retaining existing customers.

As any small business owner would tell you, this is easier said than done. In this article, we’ll delve into three strategic steps designed to fortify small businesses in the face of uncertainty.

Step 1: Use a business charge card built for small businesses

High interest rates, inflation, and access to credit can really take a toll on small businesses trying to do more with less. Not to mention, major banks and prominent credit card providers don’t always cater to the specific needs of small businesses.

Often, these industry giants are reluctant to collaborate with smaller enterprises, making it challenging for them to establish credit. Smaller business card providers, however, present innovative solutions for small businesses to build credit while earning rewards. They often offer charge cards with no personal guarantee needed.

Charge cards are different from credit cards in that the balance is paid every month, preventing small businesses from overspending and amassing debt. These tailored solutions understand the unique challenges of smaller enterprises, and provide a smart and efficient path to credit growth. Flexibility is paramount during economic uncertainties. 

Unlike cards offering points or miles, a cash back-focused approach is more straightforward and transparent. This approach provides businesses with the freedom to use cash back rewards to help pay down the account balance and free up more money to spend on other essential business items.

Step 2: Let technology do the expense management heavy lifting

Controlling expenses is a linchpin of resilience in uncertain times—especially for small businesses. That’s why traditional business credit cards are not always the best investment for small businesses as they encourage more spend to help the credit card company drive revenue. Plus, credit cards charge interest and fees, costing small businesses even more in the long run.

On a more positive note, innovative corporate cards will often offer free expense management technology, empowering small businesses to stay within budget. Specifically, they allow small business owners to enforce spending policies among their employees by setting spend limits and approved merchant categories. For example, a charge card provisioned exclusively for a delivery driver’s use at gas stations ensures precise control, eliminating worries about misuse or fraud.

Step 3: Leverage rewards networks for customer acquisition & retention

Small businesses often struggle with limited marketing budgets, unpredictable overhead, and less resources overall, which necessitates creative solutions. This is where rewards networks can make a real difference.

By offering small businesses an easy way to increase sales with no upfront investment—rewards networks are a no brainer. These programs not only allow small businesses to attract new customers, they also foster loyalty among existing ones through rewards, discounts, and exclusive access. Even better, these customers get tailored offers that allow them to maximize their savings through cash back and discounts, incentivizing even further loyalty.

In the spirit of smart financial management, rewards networks operate on a performance-only basis, which means businesses only pay commissions when sales are driven by rewards network customers. This minimizes risk while maximizing incremental sales, aligning perfectly with the ethos of doing more with less.

Setting small businesses up for success now and in the future

In the realm of economic uncertainty, resilience for small businesses is not just a strategy—it’s an imperative. By strategically leveraging smart rewards programs, embracing technology for expense control, and adopting user-friendly fintech solutions, small businesses position themselves for sustained success and growth.

In the ever-changing landscape, this approach isn’t just smart—it’s the savvy, self-aware way forward for small businesses looking to thrive amid uncertainty.

Future-proof small businesses with the right partnerships

In the best of times, keeping a small business growing and profitable is challenging. But when small business owners are trying to thrive during economic uncertainty, every decision can feel like it’s make or break.

That’s where simplifying everyday tasks like expense management or leveraging rewards programs can really make a difference. Not only do they save small businesses time and money, they also help build customer loyalty, increase sales, and control costs.

That’s where Finfare CONNECT can help. By leveraging our extended network, small businesses are able to reach millions of potential customers and expand their brand exposure. For example, Finfare’s charge cards are equipped with admin-controlled policies and an intuitive portal, enhancing expenditure control and freeing up valuable time for business owners to concentrate on strategic growth initiatives. All in all, Finfare MONEY is the smart solution for business growth especially during uncertain economic times.