How to Survive The Next Financial Crisis

The 2020 Financial Crisis took many of us by surprise. It was likely a shock for those who expected the next financial crisis to be triggered by the usual stock market or real estate bubbles of the past. Who expected it to be triggered by a virus? What made the 2020 crisis unique was how the government mandated that businesses close their doors, leading to mass unemployment and business failures. So, even if small businesses had been avoiding speculative investments and had minimized their bank debt to protect themselves from the effects of previous crises, they could not escape the 2020 financial crisis. That is, unless they already had a strong online presence.

So, if you don’t know what is going to trigger the next crisis, how do you prevent this from happening to you as a business owner or employee? The first thing you need to do is follow the trends. The brick-and-mortar businesses that had been following the growing trend of online purchasing and had established an online presence before 2020, quickly transitioned from in-person sales to online sales to save their businesses. Those who hadn’t paid attention to the online purchasing trend, and hadn’t established an online presence, had to either depend on government stimulus or borrow money to stay afloat, or they closed up shop altogether.

Many brick-and-mortar employees were unprepared for the sudden job losses. Employees who were following the trends had online businesses on the side, hoping to be able to quit their jobs someday. They probably also had money saved up for emergencies, not knowing exactly what the emergency would be. During the time that their workplace was locked down, they used that time to build their side businesses, made extra money and were able to keep their families afloat. According to a Reuters business report, Amazon reported it’s biggest profit in its history in the summer of 2020 with revenue increasing by 44 percent. Many Amazon sellers, who had been running their businesses as side hustles long before the crisis, profited in the process. They had already established their Amazon businesses, and although many of them might have still kept their full-time jobs, they had been following the online purchasing trend and knew that online sales would be the way of the future. So they kept on building. Those who lost their full time jobs transitioned full-time into their Amazon businesses and were able to keep up with their bills. Some even replaced their full-time incomes and didn’t bother to return to their old jobs when their employers reopened.

I’m not saying that everyone should be an Amazon seller. I’m saying we need to follow the trends and make financial decisions based on the direction the world is going. Always have a bank of emergency money to carry you through a crisis and have an alternate source of income that is trending towards future purchasing patterns.