Recessions can be a worrisome experience for entrepreneurs. People are more reluctant to spend money, unemployment rates spike and some experts say that “fear of a recession” could be a leading cause of it occurring in the first place.
But it doesn’t have to be doom and gloom. In fact, it’s possible to thrive during a recession according to one business strategist.
Misti Cain is a multi-6-figure entrepreneur and the host of the new business reality show, Werrrk! By Mailchimp and Scout Productions – creators of Queer Eye. She’s also an all-star mentor for Techstars and the founder of digital strategy company Whyzze which she started after being laid off in 2016. Cain specializes in helping entrepreneurs start, grow, and scale their businesses by teaching them how to create measurable action plans and step-by-step business roadmaps.
According to Cain, profiting during a recession is more possible than you might think. Here are her 5 tips for surviving a recession.
1. Follow The Money
“When a recession hits, money doesn’t just disappear,” says Cain. “Yes, there is a slowdown of economic activity but there are people who are still spending. It’s your job to find them. Look for success stories, industries, products, and services where there’s a flurry of positive activity. Study what those companies are doing – their offers, marketing, reviews (both positive and negative), and customers. Then, copy or improve on what they’re doing in a way that makes sense for your business.
“A donut shop, Cranky Als, did this well. When other bakeries started closing due to lack of business, they created a DIY donut kit to mail to customers allowing their customers to make donuts at home. They then encouraged people to upload photos of their final creations and tag their business on social. They tripled their revenue during a recession while others were closing shop.”
2. Appeal To Emotion, Not Logic
“People’s fears about a recession being the cause of a recession shows how powerful emotions can be. Most people make decisions based on emotion then piece together facts and data to support their decision. Instead of pummeling people with what you do, appeal to how they feel,” suggests Cain. “Scare them or make them feel important, secure, and in control with your messaging. Start by examining your own habits. What headlines, book titles, or ads grab your attention? Why? What did they make you feel? Use the same process to entice others.
“The owner of Dedham Fitness and Athletic Complex capitalized on this by changing thier messaging from ‘workout to stay strong and healthy’ to ‘I’ll help you relieve stress and fear through movement.’ Exercise has been shown to alleviate stress and reduce anxiety, so this was the perfect message swap at a time when people were feeling stress and fear because of the economy. They were able to double their clients during an economic downturn.”
3. Partner Up
“When people are getting laid off, let go, or struggling to maintain their business, there’s opportunity. Look for ways to barter, partner, or work together with people who can help you grow your business,” says Cain. “For example, a team-building company began creating virtual team-building sessions for companies. For one of their offerings, they partnered with a gaming and toy company. They send the employee participants a box of puzzles and clues then facilitate an online murder mystery team-building activity. Without the overhead costs of in-person team building sessions, plus a unique online service offering, the organization made a low six-figure profit during a recession and increased its revenue by just over 30% for the year.”
4. Pivot Completely
“Sometimes your current business model isn’t going to work during a recession. Take the 2020 pandemic for example. Many businesses were forced to shut their doors and shelter-in-place,” notes Cain. “When Superb Maids saw their business on the decline, they pivoted and began offering grocery delivery services. They also started their own line of home cleaning products, towels, and equipment. This pivot allowed them to grow their business by 54% in three months.”
5. Focus On Customer Experience
“It’s common to want to withdraw or go dark during hard times. However, the most successful businesses double down on their customer experience. Continue marketing, communicating, and making your customers feel like VIPs,” says Cain. “For example, start calling clients one-by-one to simply ask how they are doing. If you’re a mindfulness coach, try creating a free meditation program in an effort to help your clients de-stress. Yardbird Southern Table & Bar included a roll of toilet paper with each family meal his customers ordered during the toilet paper shortage. The point is this: get creative to avoid losing the customers you worked so hard to obtain.
“As trite as it sounds, my advice is don’t give up. Invest in educating yourself, expanding your network, and continuing to try new things. Look for support as well. Join engaged entrepreneurial communities to increase your odds of success. My company Whyzze has a free community to help entrepreneurs and leaders start, grow, and scale their businesses in measurable ways.
“Persevering through challenges, mentoring and adding value to others has literally changed my life. I wouldn’t be who or where I am today without it,” adds Cain.