How can an SEO agency prepare for an economic downturn?

Key takeaways

• Focus on client retention over new business. It costs 5-7 times more to acquire a new client than to keep an existing one. Protect your core retainer revenue by proving your value during a downturn.
• Build a cash runway of 3-6 months. Calculate your monthly fixed costs and save enough cash to cover them. This emergency fund buys you time to adapt without panic.
• Stress-test your financial model. Run scenarios where client spend drops by 20%, 30%, or 40%. Know exactly which costs you can cut and how quickly to protect your agency's survival.
• Diversify your service and client mix. Relying on one big client or one type of service is risky. Aim for a spread of retainers and project work across different industries.
• Communicate proactively with your team. Uncertainty breeds fear. Be transparent about your planning efforts to stabilise the business, which builds trust and retains your best people.

What is SEO agency recession planning?

SEO agency recession planning is the process of getting your agency's finances and operations ready for a period of economic slowdown. It means looking at your cash, your clients, and your costs to make sure you can survive and even find opportunities when other businesses are cutting back.

For an SEO agency, this isn't just about cutting costs. It's about strategic preparation. You're making deliberate choices now so you don't have to make desperate ones later.

Good planning turns a threat into a manageable challenge. It lets you protect your team, serve your clients better, and be ready to grow when the market picks up again.

Why is recession planning different for SEO agencies?

SEO agencies face unique pressures in a downturn. Marketing budgets are often the first thing clients cut, but SEO can also be seen as a essential, cost-effective channel. Your planning must balance these two realities.

Unlike project-based work, your retainer model provides predictable monthly revenue. This is your biggest asset in a recession. Your planning should focus fiercely on protecting those retainers.

Your main costs are people. You can't stockpile inventory, but you can manage team utilisation (how much billable work your team does). In a downturn, keeping utilisation high is critical for maintaining your gross margin, which is the money left after paying your team and freelancers.

Specialist accountants for SEO agencies understand this model. They help you plan around these specific financial dynamics, not generic business advice.

How do you start building financial resilience?

Building financial resilience starts with knowing your numbers inside out. You need a clear picture of your profit, your cash flow, and where your money comes from. Resilience means your agency can absorb a financial shock without collapsing.

First, calculate your agency's runway. Add up all your cash in the bank. Then, add up your essential monthly fixed costs like salaries, rent, and software subscriptions. Divide your cash by your monthly costs.

If you have £60,000 in cash and costs of £20,000 per month, your runway is 3 months. The goal for good SEO agency recession planning is to extend this to 6 months of runway. This is your emergency cash reserve.

Next, analyse your client concentration. If one client makes up more than 30% of your revenue, losing them would be a crisis. Part of building financial resilience is diversifying your client base so no single loss is fatal.

Finally, review your service mix. Are you overly reliant on one-off technical audits? Do you have solid monthly retainers for ongoing work? Retainers provide stability. A resilient agency has a base of recurring revenue that continues even if new projects slow down.

What should be in your business continuity plan?

A business continuity plan for an SEO agency is a practical document that outlines what you will do if your income drops suddenly. It's not a complex corporate policy. It's a simple list of actions to keep the lights on.

Your plan should start with a trigger. Decide what event will activate your plan. For example, "if we lose two major retainers in one month" or "if our pipeline of new business dries up for 60 days". This stops you from reacting too early or too late.

The core of the plan is a tiered list of cost reductions. Tier 1 actions are quick, painless cuts. This might include pausing non-essential software, reducing freelance budgets, or cancelling unused subscriptions.

Tier 2 actions involve harder choices. Could you implement a temporary hiring freeze? Could you negotiate a rent reduction with your landlord? Would you reduce discretionary bonuses?

Tier 3 actions are last resorts to avoid closure. This might mean considering reduced hours (furlough) or, as a final step, making redundancies. Having this planned in advance removes emotion from the decision if you ever face it.

Your business continuity plan should also include a communication strategy. How will you talk to your team and your clients if things get tough? Proactive, honest communication often prevents panic.

How much cash should an SEO agency reserve for emergencies?

Aim to save enough cash to cover 3 to 6 months of your agency's fixed operating costs. This is your emergency cash reserve. It's your financial airbag in a crash.

First, list your essential fixed costs. Include all salaries (for your key team members), rent, core software (like your SEO tools and accounting platform), utilities, and insurance. Do not include variable costs like freelance spend or client ad budgets.

Let's say these essential costs total £25,000 per month. A 3-month reserve would be £75,000. A 6-month reserve would be £150,000. This money should be kept in a separate, easy-access business savings account. It is not for investing or for general spending.

Building this reserve takes time. Start by setting a monthly savings goal. Could you automatically transfer 5% or 10% of each client payment into your reserve account? Even small, consistent amounts add up.

These emergency cash reserve tips are about discipline. Treat this reserve as a non-negotiable business expense, just like paying your team. Its purpose is to give you options and time to think if client payments slow down or stop.

Which clients should you focus on protecting in a downturn?

Focus on protecting clients who see SEO as a necessity, not a luxury. These are typically clients where SEO directly drives their sales or leads, and who have stable businesses themselves.

Analyse your client list. Which clients have been with you the longest? Which ones pay on time every month? Which ones give you steady, predictable retainer work? These are your "anchor" clients. Your SEO agency recession planning should include specific strategies to keep them happy.

Prove your value with clear reporting. In uncertain times, clients need to see the return on their investment. Double down on communicating how your work drives their revenue. Show them the leads, the sales, and the rankings you're protecting.

Consider offering flexibility. Could you temporarily adjust a retainer scope (not price) to help a good client through a tough patch? This builds immense loyalty and makes them less likely to cancel altogether.

Be wary of clients in highly cyclical or vulnerable industries. If a client's own business is likely to be hit hard, they are a higher churn risk. Don't ignore them, but be prepared for the conversation.

What financial metrics are crucial to monitor?

Monitor three key metrics daily during uncertain times: cash balance, accounts receivable (money owed to you), and pipeline value. These tell you the immediate health of your agency.

Your cash balance is straightforward. How much money is in the bank today? Track this daily. A steadily declining balance is your earliest warning sign.

Accounts receivable is the total of all unpaid invoices. Calculate your "debtor days". How long, on average, does it take clients to pay you? If this number starts creeping up from 30 days to 45 or 60, clients are stretching their payments. This strangles your cash flow.

Pipeline value is the total worth of potential new business. Is new business still coming in? A shrinking pipeline today means less revenue in 60-90 days. You can use our free financial planning template for agencies to track this easily.

Also watch your gross margin. If you have to discount services to keep clients, your margin gets squeezed. Know the lowest margin you can accept before a client becomes unprofitable.

How can you reduce costs without hurting service quality?

Reduce costs by improving efficiency, not by cutting corners on client work. The goal is to deliver the same or better results while spending less money internally.

Audit your software stack. Most agencies have tool subscriptions they barely use. Cancel redundant tools. Negotiate with providers. Many will offer discounts if you pay annually instead of monthly.

Optimise your team's utilisation. Are your SEO specialists spending too much time on non-billable admin? Can you automate reporting or streamline processes? Higher utilisation means you generate more revenue from the same salary costs, which directly improves your margin.

Review freelance and contractor usage. Could some specialised tasks be done in-house now that you have the capacity? Conversely, could using a freelancer for a short-term project be cheaper than hiring a full-time employee?

Renegotiate with suppliers. Contact your office landlord, your internet provider, and other regular vendors. Simply asking, "Do you have any cost-saving options given the economic climate?" can yield results. This is a key part of a robust business continuity plan.

Should you keep investing in growth during a recession?

Yes, but your investments must be strategic and low-risk. A recession is a time to strengthen your foundations, not to gamble on expensive new ventures.

Invest in client relationships. This costs time, not much money. Have more check-in calls. Send useful insights about their industry. This investment protects your existing revenue, which is your priority.

Invest in skills, not just headcount. Could you train your content writer to do basic technical audits? Cross-training your team makes them more versatile and improves your financial resilience.

Consider small, targeted marketing. While competitors go quiet, your voice can be heard more clearly. A focused content strategy that addresses client fears about SEO in a downturn can attract the right kind of leads.

According to a Harvard Business Review analysis of past recessions, companies that balance cost-cutting with strategic investment often emerge stronger. For an SEO agency, this means investing in processes and relationships that make you indispensable to your clients.

How do you communicate your plan to your team?

Communicate your plan with honesty and transparency, focusing on stability. Your team will be worried about their jobs. Your goal is to replace fear with confidence that you have a plan.

Call a team meeting. Explain that you are proactively planning for potential economic challenges, which is a sign of a responsible business. Frame it as "we are getting strong and ready," not "we are in trouble."

Share the broad strokes, not every financial detail. You could say, "Our goal is to build a 6-month cash safety net, and we're halfway there. We're also focusing on keeping our key clients happy to protect everyone's roles."

Invite their ideas for efficiency. Your team knows where time and money are wasted. Asking for their input on cost-saving or process improvements makes them part of the solution.

Reassure them that their jobs are secure as long as the agency hits its core targets. This clarity reduces anxiety and helps you retain your best people when they might be tempted to look elsewhere.

What are the common mistakes in SEO agency recession planning?

The biggest mistake is doing nothing and hoping for the best. Hope is not a strategy. Waiting until you have a cash crisis means you've lost all your good options.

Another mistake is cutting the wrong things. Slashing prices to win any new business can destroy your profitability. Firing junior staff while keeping inefficient processes doesn't solve the underlying cost problem.

Many agencies also fail to communicate. They hide their concerns, which makes the team anxious and clients suspicious. Open, calm communication is a powerful tool for stability.

Finally, some agencies stop all marketing and business development. When the recession ends, they have no pipeline and have to start from scratch. A consistent, low-level effort to stay visible is a smarter long-term play for SEO agency recession planning.

Getting specialist advice can help you avoid these pitfalls. Talking to accountants who work exclusively with agencies gives you a perspective shaped by real experience, not theory.

Preparing for a downturn is one of the most strategic things an SEO agency owner can do. It forces you to look critically at your business, strengthen your weak points, and build buffers that protect your team and your dreams. By taking these steps now, you're not planning for failure. You're planning for enduring success, no matter what the economy does next.