Wondering what you need to do to protect your assets during a recession. Kevin Irle, Financial Advisor with Waddell & Reed Financial Services, shares his thoughts on the subject with American Small Business News readers.

Q: What do small business owners need to know about how an economic recession can impact their businesses?

Irle: Unless they are properly positioned, an economic recession can be devastating to their retirement portfolio as well as their business’ bottom line. Small business owners have enough to worry about just keeping their doors open without having to worry about their portfolio as well. It is important to keep their assets positioned properly or they could find themselves with no capital and no lines of credit; a devastating combination.

Q: Are there steps that entrepreneurs can take to protect their assets during a recession?

Irle: Absolutely. First, make certain to diversify your portfolios. Never put all your eggs in one basket. Diversification can save you a lot of heartache and help prevent huge losses. Second, consider making a financial plan if you don’t already have one. These can help show you just where your assets stand in relation to your goals and make certain that you never get too heavily invested in one area over another. Lastly, they need to streamline all aspects of their business to make certain that each area is not a waste of their resources.

Q: What recommendations do you have for small business owners who are concerned about how a recession might impact their business and personal assets?

Irle: Make absolutely certain that they have enough liquid assets in case of an emergency. With all of the banks going belly up today, small business owners need to plan for the possibility that their bank may fail as well. If this happens, their line of credit may cease to exist and they are going to need this emergency fund to continue operating.

Q: What pitfalls do small business owners need to avoid in order to keep their assets safe?

Irle: All too often, people stop investing during a recession because they want to wait until things “get better”. Think about this. If you stop investing during a recession, then when the market recovers, the best they can do is be right back where they were before the recession except now it’s been a couple of years and they are behind on their retirement. You have to view a recession as a buying opportunity; you will not find a better time to purchase new investments than when the market is down. When the market recovers, you’ll have the opportunity for some nice growth and come out of the recession much better than when you went in. You have to play to win, not to not lose.

Q: How can an entrepreneur’s financial advisor help him or her weather a recession?

Irle: A Financial Advisor can help you establish goals and priorities and use those together to help you reach retirement. I think that one of the most important things that I can do as a Financial Advisor is just be there to reassure my clients that they are they are on the right track and they’ll be okay. Remember, if your refrigerator breaks, you don’t try and fix it yourself, you call the technician. It should be the same with your portfolio; attempting to do it yourself may cause more harm than good.