🌼4 Unconventional Things I Do to Insulate My Business from Recessions

🌼4 Unconventional Things I Do to Insulate My Business from Recessions

How to boost your financial security and peace of mind as a founder in this economy.

4 unconventional things I do to insulate my business from recessions. 4 unconventional things you can do right now to boost your financial security and peace of mind as a founder in this economy.

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There are two kinds of entrepreneurs right now: The ChatGPT millionaires and the rest of us going down with the recession. Just kidding — sort of…

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In all honesty, AI has definitely created its fair share of new founders who’ve achieved some recent success, and I haven’t been shy about using it in my own ventures (and some new ones). That said, coming from someone who has a broad network of fellow founders, entrepreneurs, CEOs, CFOs, and investors, I can assure you that this recession is hitting many businesses — hard.

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In fact, it’s definitely a vast minority of founders I know who haven’t admitted to experiencing a pretty significant dip in revenue and profits they can’t seem to counteract. One such fellow founder recently admitted publicly that his company — one of the most recession-proof B2B services out there — is down more than 50% year-over-year, and even his lean team couldn’t avoid devastating layoffs.

Oh, and ironically — and most frustratingly — many of us founders have also seen price hikes in the tools, services, and resources we’ve used for years that are critical to the operations and success of our businesses. I get it: Those companies are hurting too, and almost no one is immune to the economic effects of a recession.

That said, this article would be a pointless, news-rehashing pity party if I just droned on about sales declines and thinning profits. We get it: It sucks; now what do we do? Here’s where I hope to add some value with four unconventional things I do (that you can implement too) to insulate my (or your) businesses from the financial devastation of a recession.

1. Build assets in the background

There are typically two schools of thought during a recession:

You go hard on sales and marketing, circling back to your least-engaged and lowest-quality leads with a super-sale and praying they’ll finally bite

You accept the lean season and attempt to dramatically cut costs and stick it out until the market turns around

While those two methods can work as a last-ditch Hail Mary attempt to keep things afloat, there is an alternative and more proactive approach I prefer to take. The hardest pill to swallow with this approach, which is also the reason few choose to pursue it, is that it actually requires diverting your time, resources, and attention to another pursuit that may not produce returns right away.

Nonetheless, building assets in the background — ideally passive and perhaps even synergistic ones — is one of the best ways to offset the financial damage from an economic downturn and fill up the downtime those empty calendars and dropped clients have left you.

Though this may require some grunt work and patience, it’ll be well worth it when you realize you have another brand-new, shiny faucet to turn on and enjoy the new stream of cash flow. Last year I ended up executing on a passive income, recurring revenue B2B venture I’d had on my mind for the past couple of years. It’s easily been one of the least exciting, least sexy, most boring ventures I’ve ever built. Nonetheless, it solves a need, I’ve been a customer of its competitors (so I’m acutely familiar with the audience), and while the operations may not be sexy, uncapped passive recurring income is.

If you’re a customer of a product or service and you think there’s an opportunity to build or acquire your own or do it better, maybe that’s a sign. Don’t sleep on sleepy opportunities; sometimes they’re the most ripe for disruption and improvement.

2. Switch sides

If you currently sit on one side of a market, it’s very possible you could add value to the other side as well. In times of a recession, switching sides can both add a second income stream and exploit an expertise you didn’t even know you had.

For example, I have multiple B2C businesses, and while I’m well-versed in those industries from a B2C perspective, I’m also well-acquainted with the B2B side of things as a business owner myself who patronizes other B2B providers. Once I started tallying up the pros and cons of B2C versus B2B in my industry, I realized that selling B2B would capitalize on what I liked most about our ventures and avoid the parts I couldn’t stand.

For you, it may not be B2B versus B2C, but rather premium versus budget-friendly or done-for-you versus do-it-yourself. Regardless, if you have years of experience in an industry or around a product, service, platform, or task, there may be a prime opportunity to monetize it in a completely new way without having to reinvent the wheel.

Think to yourself: Are there any platforms, tools, or services I pay for that I could replace, do, or create myself? If so, you may have just found your next offering.

3. Sell your best secrets (if you dare)

No, I’m not talking about adding a millionth course to an overly crowded market of gurus. I’m talking about productizing industry-specific skills you use in your business to serve others in your space.

Most of us who’ve built a successful business have at least an element of a secret sauce. While I’m not suggesting you give that away entirely, I am encouraging you to consider if there are opportunities to partner up with others in your industry to dole out certain services you formerly reserved for just your company.

A few examples:

Do you have an email list you could “rent out” to help promote other offerings for a fee or affiliate revenue share?

Do you use certain automation tools or software that some of your newer, older, or less tech-savvy peers might benefit from? If so, you could offer to implement these tools for those parties for a fee. If this feels too close to home (or too much like helping a competitor), you could branch out into other complementary, but not competitive industries, which is what I’d suggest.

4. Exploit your vulnerabilities

Some sales dips are temporary and largely due to a current event or economic hiccup; however, sometimes those coinciding sales dips foreshadow a future that’s here to stay. As harsh and depressing as that sounds, many industries have been (and are currently being) disrupted and in some cases, an economic recovery may not return your sales to prior levels.

It’s crucial to be brutally honest with yourself when you assess the state of your business, your industry, and consumer trends and behavior now, as well as what you can expect in the next three, five, and even ten years.

Five years ago I “read the room” about a business that still makes me money to this day, but which I was steadily diversifying away from. I knew back then I never wanted to put all my eggs in that basket, and I looked that business’s greatest weaknesses and vulnerabilities in the face and vowed to create alternate entities that employed just the opposite.

Tally up your business’s weakest points and greatest vulnerabilities and see if or how you can create other ventures, services, or offerings that completely offset those aspects.

For example:

If one of my businesses is comprised of one-time purchases, I built others around repeat orders or recurring revenue.

If one of my businesses had extreme seasonality, I built alternate ventures that catered to the opposite seasonality to counter the dips.

If I knew one singular entity or legal change could put one of my ventures out of business indefinitely, I created another venture to cater specifically to those decision-makers both now and in the event of that change.

As counterintuitive as it may sound, exploiting your business’s vulnerabilities — the ones you’d never want to reveal to your competitors or peers — can be the very thing that saves you in the darkest times. The only thing better than not having vulnerabilities is having a vulnerability-exploiting backup plan so you know you’re covered should things go south.

5. The bonus tip — and the least conventional of all

You know that sweet cha-ching you hear when another sale notification drops into your email alerts? It just perks up your ears and brightens your day, right? What about the silence of no sales…

Ironically — and I’m guessing many of you can relate — after enough years in business, you’ve perhaps turned off those email sales notifications. Even if you get them, the thrill of the “cha-ching” may have lost its ring. Why? Well, the sad truth is that most of us after some time get used to a certain baseline of financial success and stop counting those wins as individual victories. Nonetheless, the silence of crickets during a recession seems to be the most deafening noise of all.

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I can tell you from firsthand experience and from speaking with dozens of other founders who’ve experienced a less-than-optimal past year (or for some, the past few years), it’s incredibly easy to blame ourselves for the losses. However, you probably didn’t start your business or reach its greatest heights mired in a downtrodden mood. In fact, you were probably full of vigor, excitement, inspiration, and perhaps even a little bit of entrepreneurial delusion that urged you to dive head-first into building your business despite all the risks and obstacles.

If you allow the economy, a bad season, or a financial hiccup — or even a permanent industry shake-up — to derail your vigor and enthusiasm, you will severely dwarf the likelihood you weather this storm and come out strong enough to face the next one.

Business comes with ups and downs, and few companies can stay the same and simultaneously stick around successfully forever. Evolution is inevitable, and while sales can (and should) impact your action, it shouldn’t dictate your mood. Long-term success in business is all about being forward-looking and proactive, and though it can be painful, doing so in the downtimes will only make you emerge that much stronger and more resilient. That’s the only way to ensure this recession or sales dip won’t be the last one you weather.

Contributed by Rachel Greenberg

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