Listen and subscribe: iTunes, Stitcher, Spotify The entrepreneur roller coaster may have been crazier than normal for the past 12 months. No one really foresaw such craziness was going to happen. However, it’s a matter of time before a recession hits. You can take steps to make it through the current downturn and to make sure you’ll weather a recession successfully. In this episode, you’ll learn eleven strategic tips and actions to recession-proof your business. These tips apply whether you’re a service or product-based business. Resources Mentioned: WISE Budget Box Go from “I hate budgeting” to consistently planning, successfully budgeting, and saving money every month with the WISE Budget Box subscription. Only $75 per quarter ($25/month). Just when you start to fall off, the WISE Budget Box will give you a motivational jolt and a box filled with a new set of tools every 90 days. You’ll also have continuous access to the WISE Financial Fitness portal filled with courses, protocols, and digital resources. Business Goals Planner Get organized, make progress, remove overwhelm, and increase your revenue. You’ll design clear goals and a powerful strategy to achieve them. Don’t just make a long to-do list that leaves you in overwhelm. Focus on tasks not just your schedule. Clearly write tasks each day that will help you move your projects along. Organize tasks each day by project to help with project management. Stay ultra-focused each quarter. You’ll power through your tasks with this 90 day progress system. Financial Planning Roadmap This financial planner helps you consistently budget (by month or paycheck), analyze your budget, and track and analyze side hustle earnings for profit. If you don’t like your financial situation, then change it. The Brave Entrepreneur’s Desk I reveal major lessons l learned during my journey, and powerful affirmations and epiphanies that will keep you motivated and progressing as an entrepreneur. Thanks for Listening If you have any comments or questions about this episode, leave a comment below. If you liked what you heard subscribe on iTunes, Stitcher, or wherever you listen to podcasts and rate it. This helps the podcast show up for others. Episode Transcript: Hi Success Rebels. This is Dr. Maria James, The Money Scientist. For many of us, it’s been a tough time to be an entrepreneur or small business owner. While for some of us, the last 12 months or so have been the most lucrative time period in quite a while. I’ve spoken with colleagues who hit revenue milestones and have spoken with some whose revenue came to a halt. I guess like any major event or situation, the pandemic made some industries and side hustles become popular. For example, accounting became really hot as people try to make sure their finances were on point. Of course, everything virtual went through the roof. I saw things like virtual babysitting and virtual storytime become very popular. Everyone felt like they had to become a expert on zoom overnight. Of course, this resulted in zoom stock going through the roof. No matter your business or side hustle you had to do some sort of pivoting as a new normal was established. Even if your business provided and online service or product, you still had to pivot because you were audience had a mindset shift. I made some pivots as well to accommodate the new normal. For example, people were complaining about computer or screen fatigue. Since so many words teleworking and schooling when online as well, after the work or school the people did not want to stay looking at their screens. I launched a brand-new product called the WISE Budget Box: Success Rebel Budgeting Kit. It’s a physical box with a budgeting planner, planner stickers, tracking sheets, and other goodies to get people to consistently plan, successfully budget, and save money. It moves away from the online budgeting spreadsheet and gives people a break from the screen and a fun way to budget using a 90 day system. This isn’t the only shift that I needed to make in order to recession-proof my business. Let’s get into the tips to really hammer home the business aspects or changes necessary. We will start off with general proven actions to take. Then we will move into more specific actions and talk about examples so you can see a real-life application of the concept. 1) Worst-Case Scenario First, you need to know what could be the worst-case scenario in order to properly prepare for it. You’re going to do a very simplified version of budget projections and financial modeling. Think about and determine the potential business challenges and obstacles. For example, think about during a recession what challenges could your business face. Then think about how those challenges will affect the revenue and expenses. Would revenue drop across all revenue streams? Which revenue streams would be most impacted? What is the expected decrease? What will be the effect on expenses? Create a budget projection based on the changes you believe may occur. This will help you to prepare for shifting and scaling up revenue streams to make up for the decrease in other revenue streams. Even if you have only one revenue stream it will help you prepare to survive those numbers. Create rules and policies as to when these solutions should be implemented and how. Have the plan strategy completely flushed out so when it’s go time you’re ready. For each new year, each quarter, and a new launch, I do financial modeling to assess worst-case, expected, and best scenarios. I look at the numbers and make sure that I am able to handle the good or the bad. 2) List of vendor alternatives From the current disruption caused by COVID19, you can see that having alternatives for suppliers and any vendors that you use is key. A lot of businesses that depended on suppliers based in China had severe delays in receiving products. They were left scrambling to find quality vendors to replace their current vendors. You may have merchandise, a book, or other products you sell during your presentation or in the back of the room. Create a list of backup vendors. Research and qualify them so if you need to use an alternate for any reason you already know you will receive quality items and be familiar with their process. Do this for every vendor in your business, as much as you can. Try to vary their characteristics, like geographic location, account for things like production capacity. Think about alternative distribution channels for physical or online/digital products as well. Not only do you need to have backup vendors and suppliers to receive items you also want to think about distribution. If your current distribution channels are affected, who will your backup be? I have two planners, a financial planner called the financial planning roadmap and a business planner called the business goals planner. These are printed physical books so I make sure to research several different printers and have a list as to who I can and want to work with to print my planners. I have two alternates that will keep the pricing and quality about the same. I did the same for my book The Brave Entrepreneur’s Desk. You want to do your best to maintain your profit margin. 3) Alternative Business Model and Audience You’ll need to do the same thing for your business model and target audience. I want you to think about what shifts you will need to make in your business in order to continue reaching clients and customers as well as offering products or services. Many speakers have had to revise in-person workshops and presentations to be suitable and impactful online. Their pitches had to shift. The benefits presented had to be adjusted to show how they will still be experienced when presented online. Of course, budgets have to be adjusted as well. For example, if you’re retail that could mean figuring out how to scale up the online store or how to offer a service that is completely online or digital. How are you going to continue closing the sale? Think about who your target audience is and how you can shift the packages or offers to suit the new environment. The major question you will need to ask is which of your offers is a necessity for your customer or client? That’s where you focus your efforts. Necessities will continue to sell in good and bad times. The marketing is just different. 4) Diversify Your Revenue It’s common for small businesses to have only one or a few clients that make up the majority of the revenue. This client or clients keep the lights on and the business operating. If they decide to take business elsewhere, then the business is immediately in severe trouble. Don’t put yourself in that position. Not only do you want to make sure you have multiple revenue streams, you also want to have diversity in your customer base. For example, let’s say your industry was dog walking. In order to diversify, you could also include dog grooming, dog sitting, housesitting, a dog toy subscription box. See what I’m saying. Then diversify even more by diversifying to whom you offer the services: working professionals, stay at home parents, seniors, animal therapy organizations. 5) Have a Business Emergency Fund You may have seen people online criticizing the corporations for not being able to survive decrease revenue for a couple of months. People were asking how or why are they expected to have money set aside to survive for several months but these huge businesses do not. I always advise small business owners to have a business emergency fund. To start out, create a six-month fund of six months’ worth of operations costs saved. Then move to 12 months and if and when you can 18 months’ worth of operations expenses set aside. I base this recommendation on my experiences when I first became an entrepreneur. I had no idea what I was doing, those
