Monica O’Brien is a guest writer from Twenty Set, a blog about personal and professional development for millennials.

With the US and world pending an economic recession, smart business owners are looking to their own businesses to see how they are going to minimize its impact in 2008. Here are some things to consider in case of an economic recession:

Less Consumer Spending

Depending on your industry, your business may be hit when consumers spend less due to financial troubles. This doesn’t affect just expendable products, but also “nice-to-have” services that companies think they can go without, like marketing research or consulting services.

Tip: Make your products and services indispensible by solving problems with your products and services and by developing relationships with your customers.

Less Business Growth

Again, this depends on the industry, as some industries like the food industry will stay constant and a few industries, such as tourism in the US, will grow. Most businesses, however, will experience a loss of sales and have stagnate or declining business growth.

Tip: Prepare now just in case by reevaluating your business budget and cutting back as needed. Consider if you can grow your business by diversifying your customer base. Try moving some business to other industries or other countries that haven’t been hit by recession to make up for losses.

More Productivity and Leaner Processes

If sales take a hit, you’ll have to get rid of extraneous services you may use to run your business. This could be a good thing, however, if you take the opportunity to prune away old processes in favor of more productive, scalable solutions.

Tip: Consider spring cleaning now while the economy is still fair. Going leaner and getting rid of services you truly don’t need will help build reserve cash flows in case of economic recession.

Lack of Cash Flows

The reasons many businesses fail is lack of cash flows, so don’t let your small business get caught in the recession cross-fire.

Tip: Make sure all outstanding debts to you are paid. Try to renegotiate payment dates with suppliers if needed. If you are a supplier, consider renegotiating dates with your customers. Be prepared to cash in on favors or borrow cash in a pinch to cover expenses.

Less Competition

It’s a survival of the fittest and you may find your business with less competition from other businesses not as prepared. Of course, if you compete with larger businesses, it may be your business that takes the fall too.

Tip: Know your competition and how they are faring. Perhaps you could both benefit from a partnership or merger.

It’s very important to understand how an economic recession could affect your industry. As shown above, there are both advantages and disadvantages based on the business you are in, so do your homework!