- If you are a business owner,
entrepreneur, or marketer,
then you're gonna want to pay very close attention.
Because in this video,
I'm gonna show you how to position
your business and marketing
for success during a recession,
and the steps that I'm taking
that turn times of economic uncertainty
into opportunities for massive growth.
You've seen the news.
The stock market is down with the S&P 500 falling 23%
while the NASDAQ is down 32%.
Bitcoin widely considered
one of the safest cryptocurrencies has fallen 70%
from its high in November of $69,000 per coin.
And GDP is down, inflation is up,
and people are freaking out
and doing the literal opposite
of everything we've ever been told
we need to do in order to make money.
Grow a business and build wealth
during times of economic uncertainty or downturn.
Some say we're at the start of a recession
maybe even the next Great Depression.
Others say, it's nothing.
The economy is strong
and will recover just like it always does.
But whatever label they decide to slap on it,
one thing is certain,
there are very few times in history
that present these kinds of opportunities
for massive increases
in wealth and market share and profit.
Most people let these opportunities slip by
or worse, engage in self defeating behaviors
that leave them worse off than they were before.
But I'm not a professional economist.
And while I do have a degree in business
and I'm an accredited investor and briefly worked
as an investment and exempt market dealer,
in this context,
I'm just a guy talking about business stuff on YouTube.
So take what I'm about to say
with a grain of salt,
and let the fact speak for themselves.
Because the fact is our recession, depression,
and economic downturn
or whatever else you want to call it.
It's nothing new.
We've been here before.
And while there are variables and unknowns
like how low things can go
or how long they're going to go on for
we do have a pretty good idea
of the steps and the actions that you can take
in order to come out stronger on the other side.
And on the flip side,
we also know the steps and the actions you
can take that will make things significantly worse
than they are right now, which I'm going to
safely assume is something that you really want to avoid.
There's a saying in the astronaut community
which sadly I am not a part of.
There is no problem so bad that you can't make it worse.
So goal number one is to not do anything crazy
with your business or your finances
like selling low and burning it all
to the ground and giving up on business altogether.
But goal number two is to switch your thinking
from survival to thrival?
Thrival is not a word, is it?
- I don't know.
- So here's how to make your business
and your marketing thrive during a recession.
How to not only not lose money,
but actually profit more than you ever thought possible.
And it all starts with the important understanding
that not every business suffers during a recession.
Some businesses aren't just recession proof,
they actually thrive and experience higher profits
during recessions.
To get nerdy for just a second, in economics,
these kinds of businesses are called inelastic,
which means that demand doesn't change in relation to price.
For example, grocery stores tend to do really well
as people need to eat no matter what kind
of economy we're in.
And they tend to cut back on eating out
at restaurants instead.
Healthcare is another industry that does well
as well, just like eating.
Well, people need healthcare and medicine.
And in some cases,
demand for mental health services
increases as well, which is a sad
and unfortunate element of difficult economic times,
but still something you need to be aware of.
Businesses that sell products and services
for children also do just fine during recessions
as there's only so many days a parent is willing to go
without the basics like diapers and clothes for their kids
and businesses that serve the pet market often
do even better.
Candy, junk food, beer, wine
and liquor businesses also thrive during recessions
as they provide a quick hit of fat and sugar and alcohol
and are a less expensive "guilty pleasure" than say,
buying a new car or going on an expensive vacation
and any business in the financial industry
whether it's advisors or accountants or consultants,
well they better be ready for an onslaught
of new clients coming in the door as people freak
out and try to make sure that their investments are safe
and they're well positioned for the future.
It's not all sunshine and rainbows though.
Businesses like restaurants and fashion
and luxury retailers, more expensive electronics,
almost all travel and real estate
and automotive purchases,
as well as many other consumer goods,
almost always take a hit
but regardless of where you fall
in the recession proof to recession vulnerable scale,
there are a few things you can do to put yourself
and your business in the best position possible.
Starting with strategy number one.
Taking a look at your business' offer mix.
Knowing that certain businesses and industries
and offers are better positioned
than others in times of economic uncertainty or downturn,
will it only make sense to take a closer look
at your business' offers and see
if there may be some room to shift some things
around just a little bit.
For example, do you sell staples like basic food
anything to kids or pets or anything in healthcare?
If so, you're probably fine.
If not, are there ways
that your business could start incorporating
some of those elements into your offers?
If on the other hand, you're on the complete other end
of the spectrum selling premium high end
or luxury goods and services,
so long as you're appealing to the top 5% of the market
you're probably gonna be fine too.
As this market segment tends to buy
regardless of the economy.
The most dangerous offers or businesses to be
in right now are deferrable products or services.
Things that people can simply put off buying until later.
These are things like new cars
or new homes or other big, but not urgent purchases.
If you sell these,
of the best things you can do is to double
down on your marketing and lead generation efforts.
This will make sure that you're well positioned
to capitalize on the economic recovery.
The other thing you can
and must do is turn your focus inward
to your current customers and clients
which leads me perfectly to the next strategy
on the power of customer retention,
depending on what study
or statistic you follow and agree with,
it's generally agreed upon
that the cost to acquire a new customer is somewhere
between the range of five and 25 times more expensive
than simply retaining your existing customers.
And in a report by Bain & Company,
they found that by increasing customer retention
by just 5%, led to an overall increase of profits,
somewhere between 25% and 95%.
Long story short, maybe the single most valuable
and most important marketing strategy that you could do
during a recession is to simply turn your attention inwards
on your existing clients and customers and finding new
and innovative and better ways to serve them even better.
It's tempting in times of economic uncertainty
to think that more is the answer,
that you need to
press the panic button on your ads.
(people screaming)
Crank up your lead gen efforts
and start spending your evenings
and your weekends doing BizDev.
But maybe all you need to do is take a step back,
look at your existing customers
and start finding ways to serve them better.
Of course it helps
if you have a little bit of breathing room,
in which to do this, which is why strategy
number three is all about cashflow.
When it comes to business and money, revenue and profit
get all the credit, but to survive tough times
and to simultaneously be able to take advantage
of new opportunities as they present themselves,
you need cash and the bigger your expenses
the more uncertain the economy
and the lower your risk tolerance,
the more important your cash flow is.
Now, ideally you'd have 90 days, 180 days,
maybe even 365 days of extra expenses stored safely away.
But the general rule is to have around three to six months
of operating expenses stored safely away.
So you're able to continue to operate
and not forced to do something silly
or dangerous just to keep your business alive.
So if you've already got that, then good work,
you're covered.
But if not, and most businesses are in the not category,
well then the priority for the next few weeks
and the next few months is to try to build up
this buffer, this reserve of cash,
to whatever level you feel comfortable with.
But the beauty of having enough cash
on hand extends far beyond simply staying alive.
And it puts you
in a powerful position to take advantage of rare,
and sometimes even once
in a lifetime business opportunities,
which leads me perfectly
to the next strategy, contrarian thinking.
One of my favorite Warren Buffet quotes
of all times is, "Be fearful when others are greedy
and greedy when others are fearful."
Or in other words, zig when they zag or zag when they zig
or if they're zigging and zagging,
then you better just get outta the way.
That's crazy.
Whatever the case, the lesson here
is that if you do whatever most people are doing,
you're going to get what most people are getting.
And like I said earlier,
most people are doing the literal opposite
of everything we've ever been told,
to grow a business and make more money and profit
during times of an economic recession.
For example, three of the most basic
and well known principles in investing
that all kind of work together
are to buy and hold DCA or Dollar Cost Average
into the market.
And of course, buy low, sell high.
The buy and hold part is self explanatory.
This is investing for the long run,
not trading in and out, trying to make a quick buck.
Then dollar cost averaging is just a fancy pants
financial term for making regular contributions
to your investments,
regardless of whether the price
is higher or lower than usual and buy low,
sell high is more of a trading strategy,
but it could also be used for profit harvesting
where you try to buy things
at a lower price,
and then sell them later at a higher price.
These aren't secrets.
And if you're even somewhat interested
in money and in finance and in investing
then I know you've heard these before and yet
even though most people know
that these proven principles are what they should do,
they do the complete opposite.
Buy and hold, forget it.
Most people bought high when they thought things
were going to just keep getting better.
And now they're selling low thinking
that they're just going to keep getting worse.
And even though investments like stocks
and crypto are cheaper than they've been in a long time,
most people aren't buying, 'cause they're freaked out.
Most people, but not all people.
Some people are buying
and holding and doing as Warren Buffet advised
to be greedy when others are fearful.
In times like these,
you want to be part of the some people group,
not the most people group.
Yeah, I think that made sense.
It's kind of like when you're growing
up and everybody's doing something crazy
and your mom asks you, well, if everybody jumped
off a bridge, would you jump off a bridge too?
In this case, this incredibly morbid metaphor.
now that I think about it,
of jumping off a bridge,
well has to do with doing the opposite
of what we know we should be doing.
The point here is that just because everybody's freaking
out and selling low and not buying
and holding and not taking advantage of opportunities,
doesn't mean that you should too.
This isn't a judgment.
I too have made the terrible mistake of buying high
and selling low, losing all kinds of money
and then swearing off the system completely,
promising to never invest again.
I appreciate it's tough to watch your business
and your investments, and your mental health,
take a complete beating and to just sit there
and smile and think this is fine.
Everything's fine.
I'm good.
But that's exactly what the world's best entrepreneurs
and business owners and investors are doing right now.
And they're positioning themselves perfectly for a recovery,
whenever that happens.
And if history has taught us anything,
a recovery will happen.
So to make sure you're even more prepared,
the next thing you're gonna want to do is focus
on learning the most important money
making skill of all, marketing,
which will give you the ability to generate new leads,
new customers and new sales on demand.
So to help you do that, I've linked up a video right here
on some of my best marketing strategies.
So make sure to check it out now and I'll see you
in the next video.
What the mirror exposure effect is
is the psychological phenomenon that says we,
as people, as humans, we associate frequency with trust.
So the more often that we show up in front of people
the more often that they see us, the more they know us.