Keep twelve months of personal living expenses and six months of business operating costs in liquid investments you can access within 24 hours. This buffer lets you survive downturns, adjust quickly, and avoid the only way businesses actually fail: running out of money.
The best way to prepare for a recession is to make sure you have enough liquidity. I recommend minimum of 12 months living expenses and 6 months business operating expenses in some kind of investment that you can access within 24 hours in case something hits the fan. Basically, you need to be protected no matter what happens. If the real estate market tanks or the stock market tanks, that shouldn't affect your primary business. And if you have enough cash reserves, you can weather any downturn and make adjustments in time so that you're not caught out in the cold if the economy starts to melt down.
