Small Business in a Recession: Why Now Is the Time to Expand
- Kevin Wheeler
- Aug 5
- 3 min read
Recessions are not just economic events—they’re strategic filters. They reveal which businesses are built on solid fundamentals and which are riding momentum. For small business owners, the current climate of inflation, rising interest rates, and cautious consumer spending may feel like a signal to retreat. But history—and data—suggests otherwise.
As a fractional COO with two decades of experience guiding founders through downturns, I’ve seen how constraint breeds clarity. The companies that emerge stronger don’t just survive—they retool, reposition, and reinvest. Here’s how to do it with precision.
Step 1: Audit with Precision
Before you scale, you need visibility.
Conduct a cash flow triage. Know your burn rate, break-even point, and runway.
Eliminate non-performing expenses—unused software, low-ROI campaigns, and redundant tools.
Prioritize high-margin offerings and channels.
According to the JPMorgan Chase Institute, the median small business holds just 27 cash buffer days—less than one month of reserves. That’s not a cushion; it’s a countdown. You can’t afford ambiguity.
Step 2: Reframe Your Value Proposition
Recession reshapes consumer psychology. Your offering must evolve with it.
Position your product as a solution to current pain points—uncertainty, budget constraints, and risk aversion.
Emphasize durability, reliability, and relevance in your messaging.
Align your brand with stability and adaptability.
JPMorgan’s 2023 Business Leaders Outlook found that 45% of small businesses listed inflation as their top challenge, up from 20% the previous year. Your customers are feeling it—help them navigate it.
Step 3: Scale Strategically
Growth doesn’t require headcount—it requires leverage.
Automate core processes: invoicing, onboarding, CRM, and marketing.
Consider fractional leadership roles to access executive expertise without full-time costs.
Outsource tactical work to vetted freelancers or virtual assistants.
While precise outsourcing figures vary, the trend is clear: lean teams that automate and delegate outperform those that try to do everything in-house.
Step 4: Negotiate Proactively
Downturns shift power dynamics. Use it.
Renegotiate leases, vendor contracts, and payment terms.
Explore barter partnerships with complementary businesses.
Be transparent with suppliers and lenders—many will work with you to preserve long-term relationships.
This isn’t about cutting corners—it’s about preserving capital for strategic moves.
Step 5: Invest in the Rebound
Recessions end. The question is: will you be ready?
Build brand assets: SEO-rich content, refreshed visuals, and a compelling pitch deck.
Engage your audience through newsletters, webinars, and community forums.
Track behavioral shifts—what your customers do now is a preview of what they’ll want next.
JPMorgan’s survey shows 72% of small businesses expect increased revenue and sales in the year ahead, despite recession concerns. That optimism is your signal: prepare now to capture it.
Final Thought: Build Like You Mean It
Recessions don’t just test your model—they reveal your mettle. Some founders freeze, waiting for the winds to change. Others grab the wheel and steer.
Years ago, I worked with a founder who compared his business to a tree in winter. “You don’t see growth above ground,” he said, “but the roots are working overtime.” That season, he doubled down on systems, streamlined operations, and redefined his brand voice. When the economy thawed, his company didn’t just recover—it sprinted ahead of the pack.
That’s what recession offers: time to deepen the foundation so you can scale with confidence when growth returns.
So the question isn’t whether you’ll make it—it’s how you’ll make it. Will you be standing in spring, ready to flourish? Or will you still be waiting, hoping for conditions to change?
Let’s build something lasting.
Kevin Wheeler Fractional COO & Growth
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