From the course: How to Protect Business Profits in a Financial Downturn

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Advantages and disadvantages of a recession for small businesses

Advantages and disadvantages of a recession for small businesses

From the course: How to Protect Business Profits in a Financial Downturn

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Advantages and disadvantages of a recession for small businesses

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- Recessions negatively impact large and small businesses alike. But there are different disadvantages and advantages for each kind. For large businesses there's a pretty big advantage when it comes to capital. After all, big businesses are likely to have more cash on their balance sheet and they're going to have a greater advantage to raise money in public debt markets. Those are two things that small businesses don't usually have. They're not likely to have lots of cash lying around and they're not likely to be able to go to a public debt raise. This is why for small businesses it's really important to watch the cash, and why cash is essentially king for small businesses during a recession. Of course there are advantages to being a small business in a recession as well. As a small business you likely have better visibility over your expenses. You can pivot more quickly if there are challenges. And you have fewer…

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