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Here are four things small business owners can do to set themselves up for success in an unfavorable economic environment.

Facing higher costs, ongoing supply chain issues and deteriorating market conditions, small business owners are navigating an economic environment that is once again threatening their ability to survive. Today's landscape may be historic in its own right, but if there's one thing we can rely on, it's the inevitability of the business cycle.

Preparing for an emergency — or just the next unavoidable downturn — can be critical to future success. While the pandemic demonstrated that emergency savings are essential to surviving the ebb and flow of business, a bigger financial cushion certainly couldn't hurt. Below are four ways to create a buffer that can provide peace of mind in the short term and encourage business success and survival in the long term.

Related: Here's How Small Businesses Can Survive the Post-Pandemic Economy

Start small: No amount saved is too little — start by setting an attainable savings goal, and periodically adjust or increase it until you can build a more strategic long-term plan.

Keep operating and savings accounts separate: Out of sight, out of mind — using a separate savings account with an annual percentage yield above the national average of 0.10% (FDIC) can help ensure that you won't use the money until you need to, while also allowing you to earn interest on your dollars.

Automate your savings: Set up an automatic recurring transfer to a separate, high-yield savings account. You can also automate a particular revenue stream to directly go into the account. For example, you can program your POS system to set aside 5% of daily cash revenue.

Revisit shorter-term goals and savings strategies: Revisiting shorter-term goals and savings strategies can help you stay on track for reaching longer-term business objectives and success. When the economy and business are good, increase the amount you put toward savings in anticipation of a rainy day. In more turbulent conditions, look at what you're currently saving each month versus what you can afford to save each month.

Evaluate the cost of goods and services: Do this by looking into alternative merchant service providers to get competitive pricing. Obtain formal quotes from a few of them before selecting the most cost-efficient option. Competitors will also often offer incentives for you to switch merchants (such as waiving certain fees). For example, consider reviewing your point-of-sale terminal provider against other offers once a year.

Evaluate operating expenses: Start by reassessing the rates you're paying for payroll or benefits provider services. You might also consider negotiating your lease agreement with your landlord. For example, signing on for a longer-term lease may encourage more favorable rates. Even if it isn't time to renew, it never hurts to ask what your service providers are willing to do to keep your business.

Related: 7 Creative Ways for Your Small Business to Save Money

First, it is important to determine the fund amount you anticipate needing during an emergency. Most business advisors recommend saving at least 3-6 months of operating expenses in an emergency fund. Some questions to keep in mind:

What do you currently have in your emergency fund? How long would that cover operating costs in the event of an emergency?

If your business were unable to operate for a month, how much working capital would be needed to keep it (and you) running?

While determining how much you need is important, don't let it get in the way of starting your savings. The most important thing is to just start. You can build a plan afterward if you need to.

Related: What is Considered a Financial Emergency?

Nonbank lenders: Often, nonbank lenders have less restrictive lending criteria for small businesses than traditional lenders and can offer funding more quickly. At lenders like Funding Circle US, most customers get their loans within five days. Funding Circle US also connects business owners with a suite of other lenders via a marketplace that allows them to find the best funding options to help their businesses scale and grow.

Microloans: Explore microloans through Community Development Financial Institutions (CDFIs). Reaching out to business resource centers in your community, the local SBA office, your Chamber of Commerce or your local economic development office can be an effective way to find out more about the options available to you, including loans specifically for underserved populations such as women and minority business owners.

Consider applying for a business line of credit before there's an emergency: You may not need to use it, but it will be there if disaster strikes. Opening a business credit card can also be a great tool for establishing business credit and can help with cash flow or short-term surprise purchases. However, in a high-interest rate environment, the goal should be to pay off balances in full each month as a best practice.

As today's small business owners find themselves navigating historic market challenges once again, there are steps they can take to better prepare themselves to weather the next economic downturn and all other phases of the business cycle. A proactive, ongoing and deliberate approach to savings can help business owners prepare for the unexpected and position their businesses for longevity and success.

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