A hearty welcome to “Grandma’s Wealth Wisdom” with your neighborly hosts, Brandon and Amanda Neely. This is the only podcast that helps you take charge of your cash flow and leverage your assets, simply and sustainably, the way Grandma used to.
Amanda: Hi, I'm Amanda, and welcome to grandma's wealth wisdom where we help you break through to a smart, stable financial future, with the tried and true wisdom Grandma used.
Brandon: Hey, I'm Brandon. This is Episode 53, Recession Lessons for Business with Grandma. In case you missed Episode 52, we shared recession lessons in general, and mostly geared towards individuals and families. Today, we're going to share four lessons for business owners, entrepreneurs, independent contractors and these self-employed. We're calling you bosses for short and asking this question: what can bosses do to be smart with their money during a recession? [01:08.3]
Amanda: Now, two important notes. First of all, we're not saying that we're in a recession or we aren't in a recession. As of this recording, there are different definitions of recession. You can decide for yourself. Google at your own risk, Are we in a recession?
And then, secondly, we are for sure recording this in the midst of the COVID-19 crisis, the coronavirus crisis that's sweeping the world. But we believe these four lessons that we're about to share are applicable in any crisis, in a global pandemic crisis, but also any hard times that might happen to your particular industry or your local geographic area, or maybe even just for your individual business.
So, no matter when you're listening, whether you're in a crisis, you just came out of a crisis, you think you might be in a crisis in the future, keep listening and just ask, What we're sharing, how can this apply to my situation right now? Not I've heard this before or this isn't applicable to me right now, but it could be in the future. [02:21.8]
Ask, How can this apply to me right now? What could I learn from this? How could I improve my own situation? But before we get to those lessons, we have a very special announcement.
Brandon: Did you know in February 2020 what you know now about the world economy?
Amanda: Could you tell in advance that a virus could shut down the world's largest economies?
Brandon: Does it bother you that your financial future might be tied to things that you can't see, expect or control?
Amanda: Let's step back for a minute. Is this market collapse a one-off event?
Brandon: Or is it a regular pattern of financial abuse? [03:01.3]
Amanda: What has the smart stock market really been like for you and investors over the past 20 years?
Brandon: The average financial advisor looks at the average of a stock ticker’s ups and downs.
Amanda: But we've just discovered that is a dangerous and unhelpful way to predict the future.
Brandon: What's the not so average way to evaluate Wall Street's gains and losses?
Amanda: We want you to know the truth.
Brandon: We have an upcoming live joint episode in partnership with Not Your Average Financial Podcast, where we will walk you through exactly what you need to do to build real wealth in turbulent times.
Amanda: Take a break from your Netflix bingeing and join us live to discuss how to antivirus your money and recession-proof your retirement on Saturday, April 25 at 11:00 AM Eastern, 10:00 AM Central.
Brandon: RSVP now, and there is limited seating. All you have to do is go to bit.ly/GWWLIVE25, and that's in all caps. [04:21.6]
Amanda: We’ll include the link in the show notes. Remember, participation is encouraged but not required.
Brandon: And now with Grandma's recession lessons for business.
Amanda: Now, for the bosses, we all know the problem of a recession too well. We don't need to spend a lot of time defining the problem, but I do want to read how Bob Chapman describes the beginning of a recession in his book called Everybody Matters. Here's what he writes there:
Then we were hit with the worst economic crisis of our lifetime. The news and the financial pages was unremittingly grim. The country and indeed much of the world was engulfed in the worst recession. The unthinkable was becoming commonplace. [05:05.5]
Many large financial institutions were on the brink of total collapse and stock markets were crashing everywhere. Consumer wealth declined by trillions of dollars. The U.S. unemployment rate would reach 10.1%, roughly double the pre-crisis levels. By then, the average person was working only 33 hours a week, fewer than at any time since the government started collecting such data in 1964.
And then, later he writes:
We had just come off a year when we were shipping four to six machines a month. The crisis started and, in seven months, we had one machine on our backlog. You just didn't know when it was going to end. There was no question. It was scary. None of us believed that the company would fail as we had such a solid business model. At the same time, it was a radical departure from business as usual.
That phrase there at the end, “radical departure from business as usual,” isn't that a great definition of a crisis that you can't do business as usual? You've got to take a radical departure. [06:09.7]
And if you've never read, Everybody Matters, I highly recommend it. It's such a hopeful book and the creative response to the recession that he just described starts on page 99 in the book. His company did not lay off a single person throughout the entire 2008–2009 recession, and here's how he summarizes.
We got through that economic downturn and the cultural impact was profound. Who you are in your worst times is not always who you are in the best of times. Your values, beliefs and culture don't really get tested when times are good.
Brandon: Could you say that again, Amanda?
Amanda: I'll read those three sentences again. “We got through that economic downturn and the cultural impact was profound. Who you are in your worst times is not always who you are in the best of times. Your values, beliefs and culture don't really get tested when times are good.” [07:03.6]
That company that Bob Chapman is describing that he leads, that company rebounded well ahead of the broader economic recovery during the Great Recession because of those values, beliefs and culture, and because they looked for solutions beyond traditional business norms.
If you are taking a radical departure from business as usual, you have to look for strategies and solutions that are outside of those business norms, that are outside of business as usual, so that's what we want to talk about.
Brandon: So, back to today and the crisis, the craziness that we're currently facing. I mean, we are facing all kinds of stuff right now. If business as usual is out the window due to a recession, what are some ideas outside of traditional business norms you could look for to help your business recover more quickly than everyone else? We've got four ideas for this episode. [08:04.7]
Amanda: And with each of these four ideas, we're going to share what we did in our former business, a brick-and-mortar coffee shop, when we lost business as usual due to the polar vortex of 2013–2014 that winter when many in the city of Chicago stayed home due to sustained -20 temps. Later we would find out from an alderman that 25% of small businesses in the city failed during that time. It was a pretty big crisis for our local area.
Brandon: Yeah, and it was so cold that people were quarantining themselves without the government saying you need to stay in and not talk to people. We were all staying in our houses because, I mean, who wants to freeze outside? Nobody, really.
Amanda: Right. So, go forward with idea number one.
Brandon: Number one, focus on deepening relationships. So, go to your top 20% of clients and customers. Actually, call them on the phone and have a conversation. Ask them questions like, How are they doing with the crisis? What are their biggest struggles? What opportunities are they trying to move forward on? [09:18.4]
Their answers might give you the insights you need to move forward with your own business. But, most importantly, they will know that you care about them and want what's best for them.
Amanda: And I might go without saying, but if it's in your power to help them with their struggles or with their opportunities, if it's in your power to help them, do it.
Brandon: This isn't what most professionals in your industry are doing. And you will stand out, as long as you do it with the intention to serve and they know that is your intention. When they are ready to do business again, you betcha, they'll be coming your way because you helped them. [10:01.0]
Amanda: Yeah, and if this is a time to deepen relationships, it goes beyond just your clients and customers. You can deepen other relationships, too, maybe with your staff. They might have the idea that brings your business through, helps it prosper and saves their jobs.
Your vendors, what creative ideas are they using or how might you be creative together? Your accountant, what are they hearing about resources available to help you? And how could you pay them to help you take advantage of those opportunities? And so on and so forth.
This is a great opportunity to deepen relationships and find creative strategies outside of business norms together.
Brandon: I think that's the key. It’s communication. We want to communicate like when we went through our crisis of the polar vortex, we communicated that with our staff, and that also from our former business, we chatted with some customers that still had to leave home and were so loyal to us they still stopped by. [11:01.7]
And what we discovered was that their offices were doing more catering and getting food delivered for meetings. So, guess what we did? We improved their catering menu and started promoting catering within the store and on social media, so catering became central. Catering sales became a significant source of revenue for years to come because of that.
Amanda: Yeah, because we had focused on deepening relationships and that showed us the creative way forward outside of what we had been doing up to that point.
So, that's number one, deepen relationships.
Number two, create value and stop selling. This one is geared more toward your qualified leads and prospects, people that were maybe thinking about doing business with you. And right now, during crisis, people don't like to be sold to when they're scared. So, with your qualified leads, don't try to sell them right now.
Instead, create value that helps them go through and eliminate their fear, and then focus on “the” opportunity and strengths right in front of them. Maybe they couldn't see that opportunity or those strengths because the fear had clouded out those things. And because you provided a way through that fear, and now they can see them, and you're there to help them take advantage of them. [12:22.3]
So, ask yourself or ask maybe some of your ideal clients and customers three questions:
- What are my ideal clients and customers most afraid of right now and how can I help them get through that fear?
- Second question, once they aren't afraid of what types of opportunities and strengths might they see?
- And then, three, what value can I bring that will help them move forward with their own opportunities and strengths?
Brandon: We've been value creators since the beginning of our entrepreneurial journey. During the polar vortex, we continued to write blogs, send emails and social media posts. One of the fears of many of our neighbors was their heating bill to keep their homes warm. That was a huge fear. [13:07.8]
We emphasized to our immediate neighbors that perhaps they could turn down their heat for an afternoon, venture out for a hot coffee and do their work or study from a warming center known as the local coffee shop. The price of a coffee might be less than the gas required to keep their home at a reasonable temperature and they'd get a break from sitting at home all day. It worked, especially with some medical students who lived in nearby drafty apartments.
So, what are you going to do? What is your example right now?
Amanda: Yeah, what value can you provide that's beyond just selling something.
Grandma always said, “Eat your vegetables. Look both ways before crossing the road. And never risk your financial future on elements of the market you can’t control.” That Grandma, always good for some tried-and-true advice. And although some of her wisdom seems to have skipped a generation, you don't have to be left behind.
Download “Grandma's Top Tips for an Independent Financial Future” absolutely free, when you visit Grandma’sWealthWisdom.com. Don't wait. Get Grandma's best tips today.
Amanda: Okay, now number three. As you look forward into the future, lean into ways you can grow as an entrepreneur, business leader and boss. I think the most important question you can ask yourself right now is, Who do I want to be when the crisis is over? And the answer to that question will show you ways you can lean into in order to grow as a boss or as an individual.
Maybe this is the time you finally develop staff training materials to help with onboarding new staff. As you emerge from the crisis, you might be doing a lot of that, right? Maybe this is the time when you find some automation or some other tools that help you manage your business better. Maybe you finally get into some self-care routines that you've been putting off and you make those more like habits. [15:11.0]
Maybe there's some marketing you're thinking about doing that finally now you pull the trigger on. You start that blog. You start that podcast. You do the creative that you needed for an ad in your local paper, whatever it is.
Or maybe this is a great time to reevaluate your business accounting practices. Maybe you’ve got a stack of receipts and that's always been bugging you that you never feel like you're organized. You never know where money is and what it's doing for you. And if that's you, we recommend checking out the Profit First system. There's actually a book called Profit First. We use this system in our business and it's super helpful, especially when business is lean and you're going through something that's impacted your business’ revenue. So, we recommend checking that out.
And, really, in terms of business accounting practices, a big lesson I think that a lot of people are learning right now is the importance of cash flow. What we've learned recently and seen highlighted as a key lesson is that keeping more cash available in your business, so that it's not over leveraged and you've got that cash available to withstand emergencies and take advantage of opportunities, that's crucial. [16:23.8]
We say cash flow is queen, right? But that's really showing not only is cash flow queen, it's the biggest queen there is, like the queen of hearts, not the queen of whatever, the queen of spades, whatever. It's queen. So, maybe this is the time to start taking that, manage cash flow seriously, and making sure you've got cash liquid and available for you.
Brandon: Yeah, enough to last for a month or two months, so that way you can know--
Amanda: Maybe even three.
Brandon: Maybe three months. If no money is coming in, you have that emergency fund set in place. You have that cash available in liquid, not just tied in the business, or personally, yeah, it is ready for you. [17:13.0]
It's hard to remember what we did during the polar vortex in 2013 and ’14. We, in some regards, I think block it out because it was a challenging time. It was hard to grow. But we do a year end retreat every year and we record what we learned about those major events each year, so we record in a journal those key lessons that we learned, so that way we can go back and look at them.
Amanda has her notes from 2014 during the polar vortex, and we met with two of our biggest wisest counselors, an attorney and a third-generation business owner, and they shared lessons that transformed how we thought about our business. And we actually grew because we kept an open mind and sought out the wisdom of others, and these are businesses that are very different from ours. They were very different from ours, but they were long-standing companies. [18:15.1]
Amanda: Yeah, on which, actually we're going to share the lessons that they shared with us as part of number four I think here. Number four is to use this time to think long term as well. You might have five-year goals or dreams for your business. I believe this is not the time to ignore those dreams. Maybe you have to reevaluate your dream and it could need some adjusting, but make decisions today with that dream in mind.
I said this in the last episode, but it's worth repeating. It's been super helpful for me during this time to think about my long-term goals and dreams and believe that they can still happen. In fact, that's where my creative ideas for how to make the most of the next 24 hours come from. When I think long-term and visualize where I really want to go, it shows me a creative step to take today to get there. [19:10.5]
And so, as counterintuitive as that might seem, and again go listen to the last episode where we go into this in a little more depth, but that thinking long term might just give you the solutions you need for the next 24 hours. Try it. See what happens.
Brandon: I mentioned in the last example how we met with two wise counselors during the polar vortex. Here's what we wrote were their lessons they taught us.
- Number one, running a business is super hard, even if you've been doing it for generations. The adversity we face is nothing out of the ordinary. It is normal. That's what one of the counselors said.
- The second one said we have big dreams that we might not see happen quickly, but we should never give up on them. The mundane matters, even in the midst of crisis. [20:02.7]
Amanda: Especially in the midst of crisis.
Brandon: These were the exact words that got us through the polar vortex and into a summertime that was our biggest to date at that time. Isn't it interesting that our wisest counselors kept us thinking long term?
Amanda: Very interesting. Now, we want to include here some ideas that come from the “What we learned” section of that recession story in Bob Chapman's book, Everybody Matters—and, again, I highly recommend this book. It's a great read right now. It will bring a lot of hope—and he includes a very powerful message from Simon Sinek. These are Simon’s words as recorded in the book. Quote:
Next time somebody says, What are your goals? stop saying, To increase top line revenues by $1 million or $10 million, or whatever you want to do next year. Start saying, We're building a company that's going to last 100 years. Devote yourself not to firing people, but to giving them an opportunity to contribute, and if they fail, help them up, and if they fail again, help them up again. If you think you're too busy to give time and energy to your people, then they're too busy to give time and energy to you. It is a balanced equation. [21:20.5]
End quote.
We believe this is super true for your relationships with your employees, your clients and customers, your vendors or professional services, and so on and so forth. Give your time and energy to them and you'll likely build a business that's going to last 100 years, and give freely without any expectation of anything in return. Give your time and energy.
Brandon: We could go on and on with ideas for bosses on how to do more than just make it through a recession. The most likely scenario is that you'll be faced with some tough choices in the coming weeks and months, and you've already been faced with tough choices. You've probably already, again, faced them. [22:04.2]
Our concluding message to you is a question: how can we help? What can we do to serve you? We're never too busy for a conversation or to brainstorm ideas, or both. We try to make it easy to connect with us, so you can visit us at Grandma’sWealthWisdom.com and click “Request a Meeting.” You can call us at (513) 447-6501. You don't even have to click “Request a Meeting.” Just give us a call, or you can email us at hello@GrandmasWealthWisdom.com. Whatever may come and whatever lies before us, please know we're here to support you in whatever ways are within our power, no strings attached. We want to serve you.
Amanda: Yeah, we're taking Simon Sinek’s words. We have the time and energy, and we're giving it freely right now and we would love to have a conversation. [23:06.7]
And keep listening because the next three episodes that are coming out next are specific to bosses. We're thinking that bosses need some additional support and Grandma wisdom right now, so we're creating some very special content with you in mind.
Now, if you're not a business owner, entrepreneur, self-employed or independent contractor at this point, but you think you could be in the future, especially with where the trajectory was even going before this crisis happened that more and more people were not having employees, and they were hiring independent contractors and you had to be entrepreneurial. These episodes might just be foundational to your journey into being a boss, whether by choice or by force, so keep listening. Hit that subscribe button, too.
Brandon: So, even in the midst of crisis, we want to say this: keep building your wealth, simply and sustainably, so you can break through to a smart, stable financial future, even in the midst of crisis. [24:13.5]
The topics presented in this podcast are for general information only and not for the purposes of providing legal, accounting or investment advice. On such matters, please consult a professional who knows your specific situation.
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