BONUS: How to Recession Ready Your Business
There's many people out there that give lots of advice around how to survive a recession without actually having gone through it before.
But speaking from experience, in 2008/2009, I was very much in business.
And not only that, but I was running close to a million dollar photo studio operation.
At the time, I didn't realize the degree to which I was going through some really important lessons trial by fire.
And for those of you who have not experienced business ownership in a recession, what I want to share with you today may be very, very helpful in order for you to recession-ready your business.
Make sure to tune in!
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Laura
00:00
There's many people out there that give lots of advice around how to survive a recession without actually having gone through it before. But speaking from experience in 2008/2009, I was very much in business. And not only that, but I was running close to a million dollar photo studio operation. And at the time, I didn't realize I think the degree to which I was going through some really important lessons trial by fire. And for those of you who have not experienced business ownership in a recession, what I want to share with you today may be very, very helpful in order for you to recession ready your business, because we are officially in a bear market, then if you don't know what that means. Basically, a bull market is when the market is growing. And a bear market is think about like a bear during hibernation, right? It's when we're retreating, it's when we are going through two consecutive quarters of negative growth, which is where we currently are in the time of recording June of 2022. So how do you prepare for a recession? What are some of the steps you can make? And I think many people out there will be speaking from a place of hypothetical ideas. But I have experience that I can share with you, that goes beyond the hypothetical to experiential, that may really help you in this time of uncertainty. So coming up next, how to recession ready your business.
01:38
Welcome to Next Level Leap, a podcast where we dive into the mindset and strategies of scaling your company and creating a legacy brand. As a top growth strategist, multi passionate entrepreneur, membership site owner, trainer, speaker, author and mom to three. I love exploring the journey of how we as founders can multiply our income, impact and influence by landing on the other side of our next big leap. Let's get started!
02:11
Looking back on 2008, it was a time of great abundance. At that season of life, I was preparing to get married. My husband and I were married in February of 2008. And I had a booming wedding and portrait photography business. I was one of the top photographers in the Philadelphia area. And I was regularly traveling to places like Washington, DC, Manhattan, the Hamptons to photograph celebrity level weddings. And I also had a team of photographers that worked in my studio, that operated out of our Wilmington, Delaware little, you know, 2000 square foot photo studio, of which I purchased that building, just as the recession was starting to hit. At the time, it was a pretty gutsy move. My husband and I were talking about that the other day. He was like that was ballsy to buy that building at the time. But you know what, we had a small townhome that we owned, we had no kids. And I think in a lot of ways, not having a lot on the line prevented me from operating from a place of fear and allowed me to see what the opportunity was given the economic climate. So in a lot of ways, the recession was good for our business, I purchased a commercial building that I later sold for an amazing profit about an $80,000 profit a couple of years later. Transcribed by https://otter.ai - 2 -
03:42
And because of being able to purchase that asset at a time that was entering into the recession, it allowed for that growth to happen during the recovery period. I also had, you know, contracts with many of my clients longer term contracts. And while there was probably daily sacrifices being made by many of my clients, what they weren't willing to sacrifice was what was very important to them, which was photographs, high quality photographs of their wedding and of their families. So many entrepreneurs during that time may have not been an entrepreneur, you may have only operated during what is a bull market. And the truth is, it's kind of easy to make money during a bull market. There's lots of money on the street, and as long as you're making good quality offers and you're asking in the right way and you're operating from a place of efficiency, chances are people are going to be very interested in paying you and and they have discretionary money to spend.
04:48
And so the last time I went through this to a certain degree, I was naively unaffected, but when I reflect on some of the decisions that I made, I think that the point process in which I was approaching the recession was extremely beneficial without again, really realizing it. So the first aspect of that business is that I had a very specific high end client who had a very clear need. Now, if you have a wedding and a wedding date set, it's not a matter of if you're going to have a photographer there, it's a matter of which photographer you're going to choose and how much money you're going to spend. And because of that outcome focused result, and because of that inherent need, my business was able to sustain and not only that, but grow during the last recession. Now that I'm more in the coaching and info product space, what I see happening is that many of the coaches, consultants, agency owners, who are maybe just doing an average amount of business or experiencing average conversions, or may even be struggling in a bull market now need to be hyper focused on outcomes. As I often say, you trade income for outcomes. And if you've struggled to get specific around the clear outcomes that your customers experience, now is the time to double down on outcome focused results. There is a built in need for many service providers. Again, it's not that you're going to stop advertising, it's just that you're going to become more outcome focused with your advertising. So if you are a service provider that provides advertising services, how can you become more outcome focused? How can you increase the amount of measurable outcomes that you are providing your clients, because this is the time when we go into a bear market, where everybody's going to question their investments, some types of demographics will just completely pull back because they are living paycheck to paycheck. And anything that is above essential needs becomes completely optional.
07:24 Transcribed by https://otter.ai - 3 -
But in addition to that, above and beyond that, people with discretionary money typically will still have the same amount of discretionary money, maybe their net worth has decreased, which is going to create some fear in the marketplace. But they likely still have the amount of money that they had before to make various investments throughout their months and years. But what's going to happen is that they're going to become more outcome focused with those investments. If you are a coach or consultant that has fuzzy outcomes, or you are a service provider, who generally helps to make people's lives better, or there's a variety of different ways in which you help people, what you're probably going to find is that what was an easy sale in a bull market becomes a tougher sale in a bear market, people are going to be looking at their expenditures much more carefully. And they'll be analyzing each one to ensure that they're getting an ROI. And if they're not getting return on investment, whether it's improving their health or wellness or financial position, they're going to immediately cut back. Now on the flip side, if you have an opportunity for people that you serve, that you're maybe undervaluing or underplaying particularly if that opportunity improves their financial position, now is the time to start building up that offer, increasing the amount of communication that you put out around the outcomes that your ideal client experiences when they typically make an investment with you. And that was also the time to dig into your offering. And make sure that you understand clearly where people fall off or where they don't get a result or where they need maybe more examples or better tools to get them to the finish line so that they can increase the amount of effectiveness that they get with the investment and your services. So hyper focusing on outcomes is the first way to get your business recession ready.
09:41
And as we went into the recession back into 2008 2009, those outcomes were very much built into my business but again, I think I underestimated it at the time, but looking back, we were so dialed in each step in the customer journey, and we had maximize the experience that people get with our offering, that investing in a premium price photographer at maybe 2030, even 40, or 50%, or was worth it, and it was worth it to decrease maybe the amount that they were going out to dinner every month, or it was worth it to decrease maybe the videographer. I remember clearly that many of our clients cut out video in lieu of stronger photos. And there might have been clients that I never met that increase the amount of spend on video, and decrease the amount that they spent on photos, which is great, different couples would have different priorities. But I think what we did well at that time is that we didn't compromise on that premium position. What we did is we just claimed it harder. And I want to challenge you on how can you claim your premium position harder, versus have a fear based response of decreasing your pricing or watering down your offer, which I think many people are tempted to do when going into a recession. The second is that I want to challenge you on the idea of stockpiling cash, so that when the market goes down, you can prepare to buy distressed assets, whether that's real estate, whether that's stocks and bonds in the stock market, whether it's making group investments, and commercial real estate buys, whether it's buying Transcribed by https://otter.ai - 4 -
crypto or Bitcoin, no matter what the investment is, or what your comfort level is, with any of those investments, now is the time to start thinking about the amount of cash that you have available. So for example, in our own home, we have made some significant investments recently in the exterior of our home. And that would increase our net worth by about $100,000, just by simply improving the curb appeal of our home. Next, we are going to invest in our bedroom and buy new furniture and paint. Well, what we've decided to do is instead of that, we're just going to hold on to that cash and preparation of when the market goes down to maximize amount of stocks that we can purchase. Knowing that we can redo our bedroom down the road, that's completely optional. But the opportunity to purchase, you know s&p 500 stocks, when a market crashes is maybe a once in a decade opportunity. So this is probably not the time to invest in something that's completely discretionary, that's more of a nice to have. This is probably not the time to buy a new Porsche. But what it might be is the time to purchase a commercial building for your business. Or it might be the time to purchase real estate. Or it might be time to just have some cash set aside to make even just modest investments in your personal assets or your business assets. Knowing that, you know, markets go up and down. It's just how it works. And if I knew then 10 years ago, or 14 years ago in 2008, that I know today, I would have spent more money on purchasing distressed assets, knowing that the market's going to go down and then go back up. And then the third is to consider an alternate or down-market or temporary offering that is going to catch the bottom of the market for your ideal clients and just decrease that entry point. And that might sound a little bit in conflict with my first piece of advice, which is to claim your premium position. But what I would recommend is claim your premium position with your primary offering. But then potentially have a secondary offering. That is an alternate or down-market opportunity to work with you that might not have been available previously. when the recession hit in 2008. I noticed that some of my clients were still investing in family portraiture, which was very optional, right? Unlike a wedding, this is something that you know, you could take photos yourself or you could hire professional, and it's more of a nice to have versus a wedding photographer is a must have. And what I found is that some of my clients that were relatively unaffected still invested heavily in family portraiture, but many of my clients were going to less expensive alternatives in the market, many of which were knock offs of my studio.
14:51
So what I thought to myself was, well, why don't I just knock myself off and create a secondary brand and that by brand blew up in 2008/2009, it brought my little photo studio from probably around $800,000 a year to about $1.2 million a year. And we were phenomenally profitable on that offering, what I did is I created a secondary brand. And I staffed that brand with photographers that were not available my premium brand. And I remember thinking to myself, you know, creating a down-market secondary brand was such a smart idea in retrospect, because I remember that at the time target started offering luxury for the masses, types of brands within their retail locations. I remember like really popular, high fashion companies Transcribed by https://otter.ai - 5 -
would be selling these sort of knockoffs of themselves within target net that started happening during 2008 2009. So I remember watching that pattern thinking, well, that's really interesting. Maybe that's a sign that we could do something similar. And when this secondary, less expensive brand hit the market, the area parents and area customers just loved it. They love this idea of a secondary, less expensive, but still high quality offering of a premium brand that they aspire to be. So I want to challenge you with what is that down market opportunity? What is that new point of entry? And how can you position it as a budget option. In light of more expensive alternatives, I'm actually helping a client shaped this exact concept, we're creating a secondary brand, in addition to her primary offering, that is actually a little bit more expensive than her primary offering. But it is much less expensive than available alternatives to accomplish the same goal. It's a much less expensive alternative to other types of training programs and other types of business development opportunities that would help her client do the same exact thing. And going into the recession, I know that that positioning is going to be incredibly helpful to her clients. And so when we're thinking about maybe that less expensive opportunity, it doesn't have to be cheap, it doesn't even have to be less expensive than your primary offering. It just has to be less expensive than what the perceived value is of other marketplace alternatives. So that people will feel good about purchasing it, they'll feel justified, they'll feel justified in making the investment, they'll be able to explain it to other family members. Yes, I made this investment in this new business development opportunity. But you know what, if I had gone to this other place, it would have cost me 10 times as much. So this is a really, really good purchase, despite what's happening in the economy right now. And that's the type of positioning that you want to start claiming.
18:16
And for many of you who have very outcome focused offers you help people make more money, or you help them improve their relationships, where you help them improve their mental health. And that's going to be incredibly important going into the recession, just continuing to create those outcome focused offers, and positioning it as a value offering in light of available alternatives, will really help you come up with a solution that will set you up not only just to survive the recession, but thrive. Looking back on 2008/ 2009, those were some of my best years in business. And I think for many people who are open and flexible, and want to innovate and want to create value, and are obsessed with the experience that they are offering their customers. You it will be totally actually probably one of the best things that ever happened to you and your business. And if you're the kind of person that's constantly looking for what are the problems, what are the new issues that are coming up in the economy, in the world in my niche that I can now solve in a new way. What will happen is that this is an this is a time where you may even just rise up as a market leader, like we did in the photo industry during that time. And to be honest, I really thought this was going to happen two years ago, I thought that we were going to go into a recession immediately after COVID hit. What I didn't Transcribed by https://otter.ai - 6 -
expect is that the government would put trillions of dollars back into the economy. But I also knew
20:00
For, as many of you probably did, who has any type of business or entrepreneurial experience that spans over the course of 15 or 20 years, that it was really a matter of time before the recession hit, and that you start mentally preparing, you start preparing your cash position, you start thinking proactively about how you can help as many people as possible. Because where there is pain, there is opportunity. And I don't say that in a predatory way. If you know me at all, you know that I'm all about genuinely authentically helping people. But I say that in a way of embracing innovation, this is the time to start thinking creatively. This is the time to start paying attention to what your customers are saying. This is the time to start noticing what the numbers are in your business. And for many info product businesses, what you'll find is that things that worked during a bull market typically aren't the things that work in a bear market. But what you'll also find is that the excitement and energy that took place when you first got started in entrepreneurship comes back. Because you have to start problem solving and creative ways you need to start thinking about your offer in a different way. And that in itself is such an incredible feeling for those of us who are visionaries and love to create.
21:29
And I would say that this all starts with just getting in conversations with your customers. This is not the time to you know, start going about marketing with a cattle call and trying to move people from funnel to funnel or from tripwire to tripwire. This is the time to start getting into direct communication with your people and understand what it is that they're experiencing what they're thinking, like get in the trenches with your customer. And what you'll find is that there is gold in there, and you will discover so many new ways to help them that it may just be a matter of repositioning your current offer. But it also may be a matter of creating new offers to get them through what could be a very difficult time. And this is when we shine as leaders, this is when we get to step up, be heard, create a message of empowerment and encouragement and be a bright light at a time where many people might be struggling. And that takes a certain level of confidence. And it takes a certain level of experience. And it also takes you just being willing to be flexible. So as you go into the recession, I would encourage you to start taking notice, start getting into one on one conversations with your clients, with your customers with your members. Give them an opportunity to connect with you directly. I personally love video ask. I'm running a small group coaching program right now where to get into a two way conversation with me via video asked and I'm learning some awesome things I'm learning how I can improve my programs and offers even more. And even though it's time consuming, I would encourage you just to set aside like an hour a day. And give everybody who's in your paid programs and communities, a chance to get in touch with you a way to reach you a way to express concerns. And a way for you to get that incredible feedback that will allow you to get Transcribed by https://otter.ai - 7 -
into the hearts and minds of the people that you serve. So that you can be completely on top of what's happening with your customer group. So with that said, Don't fear the recession. Just prepare, be smart about how you enter into it. Don't turn a blind eye in terms of like this isn't happening. I'll deal with it when it comes. It's here and it's arrived. And now is the time to start being proactive. So if this has been helpful to you, please message me. I want to know what your experiences, what your questions are, what you're going through what you need from me in terms of you know, support, ideas, content, having been through this before and having navigated it successfully. I'd love to hear from you. So make sure to message me on your favorite platform and I will talk to you soon.
24:31
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The Scale with Joy podcast dives into the mindset and strategies of scaling your company to the million dollar mark and beyond. Each week, we follow the journeys of innovators, disruptors, experts and leaders - sharing behind the scenes stories of their most challenging moments and greatest lessons learned-all while building their multi-million dollar empires.