Looking to understand what the chemistry of a recession proof business? Cash is king in bad times but that runs out. A marketing list, on the other hand, will always make you income.
The reality? Many small businesses don’t know hey would be building a list of their customers or gaining permission to market to their patients. And, because they don’t have a recession proof business, when tough times hit, they get hurt or worse.
Incredibly, if the business goes bankrupt, the owner is left without a list to market too. But, you won’t learn that at The London School of Economics, along with a lot of the real world marketing ideas on this website.
Sitting here thinking about posting on this topic, I started to think about how many recessions I have lived through. And, turns out I forgot one.
I had made a quick list, to start making notes on stories from my past, in case I needed to include them. Then I did a fact check, using Google. That was how I discovered my memory isn’t as good as it once was.
Here are all the recessions during my lifetime;
- The OIL Crisis of 1973, and;
- the early 1980s recession, triggered by the ’79 Energy Crisis, and;
- the early 1990s recession (in Toronto there was a real estate bubble too), and;
- the Dot-com bubble, which cost me $70,000 when it burst (it peaked Oct 2002), and;
- the Subprime mortgage of 2007-08, which is indelible ink in the minds of most people, and;
- Now; what kind of recession is COVID-19 causing?
No one knows what the real, long-term effect will be of social distancing. Things like a reluctance to eat-out or to travel have masses spin offs on the economy.
I mean, who in their right mind was buying a cruise after what happened on the Diamond Princess? Not me.
Interestingly, every recession before the one that is happening now, all came after a spike in oil prices. That is why I believe that no one knows what is going to happen this time. There’s no historical track record for business-after-a-pandemic since the flu in 1920.
Since the last pandemic was on the heels of a world war, and since there wasn’t much of a global economy then, there’s no real way to predict from the documentation of that experience as to what will happen now.
It doesn’t help that no one alive was working then either, right?
Recessions and “Cash is King”
When we had the huge correction in the local real estate bubble in Toronto that was pricked by the early 1990s recession (and oil prices), a bunch of things happened. And the one that stuck with me my whole life was something my dad had clearly learned (during earlier hard times) and stated to me;
“Cash is King!”
Right after my dad said this, I found an ad in the Toronto Star newspaper that clearly implied a limousine company owner was in trouble. At that time, I could have bought a limo for less than the cost of a car. It was crazy.
There were lots of things that happened. For instance; real estate was a huge bargain weeks after it had been close to unaffordable. And there were many more stories.
Most recessions where like the early 1990s. There were excellent values to be had in on WALL ST and on MAIN ST but … this is different. After all, even if you have excess cash, like I said, who is getting on a cruise ship? Similarly, there are less opportunities to blow your money.
After all, do you see someone who is older or otherwise in the higher risk category, will not be a Disney World or in a restaurant, even if they were open.
When will Economy Recover?
The birthday I planned for my 60th (last year) didn’t happen. It was going to be a 2 week canoe trip in the fall but that is not all I wanted to do.
With social distancing, and the fact that I am in a riskier age group for Covid-19, was I going to a jazz concert? No. The Blue jays didn’t even get approval to play in Canada, so that did not happen. The planning to go to the AGO (art Gallery of Ontario) on my birthdate was a non starter, as we went into a shutdown.
I was reduced to having a webinar where a few people dropped in. That was it.
I still haven’t been canoeing nor seen a Jays game, except for on TV. I haven’t sat in a restaurant, been to any sporting event (including kids hockey, etc, which I always loved seeing), been to a church, a business networking event or got on a plane or cruise ship, in a whole year.
It doesn’t matter if others have. The point is; none of these things have been full. And that means event planners, vacation planners, restaurants, and all kinds of other businesses are hurting.
The reality? Covid-19 is mutating and that means more vaccines. It also means that people with above average intellngce are not cruising or sitting in a restaurant, at least until after this is under control. And how long with that take?
It might be 2022 before we are more or less back to normal.
At least not until they know how to stop this and have a vaccine administered to a significant number of people. Of course, herd immunity means 70% of people fall into one of three categories; they got the vaccine, they had Covid, or were born with the antibodies because there mother had it (and possibly got the vaccine).
How many people are like me? They wanted to celebrate their birthday but couldn’t?
The impact on business has been unimaginable. As of two months ago, 1 in 6 small businesses in canada closed forever, that is 200,000 entrepreneurs that lost their livelihood. It is millions when you factor in their employees!
So, yes, cash is king when it comes to buying stuff from people who are desperate for money. And there is enough of them right now but how do you have a thriving business during these times?
If older people (who are the most ‘at risk’) don’t care to be out, that money is out of circulation. And, usually, it is middle aged to older people who have have enough money in the bank to splurge. That is gone
Unless you are Amazon, selling stuff online has huge competition. Why? Because all kinds of people are getting rid of old tools and antiques and who knows what.
Greek Island vacations are out for the foreseeable future.
To be straight, I can’t even go on vacation during the period when we were intending to drive out east this summer. Why? Turns out our vaccine booster is slated for the same two week period as when we planned to drive across the country.
Yes, I had my first inoculation on March 15th, 2021. And, I am not skipping an appointment for a booster of that vaccine, that is for certain. So, we are not traveling.
I might not even be able to enjoy a canoe trip either. Though, at the moment, I am planned for this September, 2021. A full year after the original plan.
Again, it does not matter that some will because some won’t. And all of this means the economy has not only been hit hard, it is still being hit hard.
Even if the Covid variants don’t cause issues, frankly, we are still looking at the fall before the pandemic is under control. The economic shadow of the pandemic, which will stretch well past its end, makes it look like economic recovery wont begin until 2022.
Economic recoveries don’t begin right after the issue that is causing them is no longer an issue. So, even if the pandemic is controlled by October of 2021, you now know why I believe it will be 2022 before recovery begins.
I made a comment on Facebook in the summer of 2021 in regards to when the the real estate bubble would burst in Toronto. I believed the economy might be a trigger, which it has not been (at least so far). The funny thing is a real estate agent commented on my post and stated a top economist predicted the economic recovery was coming in the fall — last fall.
Yah, right. The truth is, no one knows for sure “how long will the economy take to recover” or “when will economy recover” . . . so, don’t put too much stock in a Forbes article (disclaimer; I have nothing against that media company. They are online marketers, after all).
How long will the Economy take to Recover?
Almost every kind of business is in trouble to some degree. Courier delivery people are the exception, for sure. And Amazon’s business exploded as people stopped going to Walmart. But I am not telling you anything you don’t know.
I personally would not be surprised at all if this recession took 3 years to recover, even though I am saying it will recover in 2022. Another reason to consider a recession proof business or recession proofing the one you have!
Again, this post is about a recession proof business but it is also about a business that does very well when times are good too. So, in my case, what is happening in the economy does not effect me.
In a recession, when billings are down, and for entrepreneurs CASH IS NOT KING. Sure, it pays bills but that money will run out. And there is something far more valuable.
Recession Proof Business
What can you make money from even if your business fails? Relationships.
The relationship you have with your customers is greater in value than the great majority of small businesses. That is why it is a recession proof business.
Similarly, the follower of online marketers, same thing.
In existing businesses, it is the customers or patients. For entertainers, it is the fans. Online it is followers and organic traffic that turns more people into followers. If you are regularly providing them with interesting content — marketers refer to this as “high quality” — the result is they trust you.
They think they know you, which is a phenomena, but they do trust you.
If I was stuck at home, either due to being out of work or a failed business, I would learn some new skills, like from following this content creator (me). Then I would start replacing my lost income.
Cash is not king, your list is king. And you list is made up of fans, followers or customers.
If you are looking for what to do, I can and do supply some ideas in this blog and my videos (YouTube). Better still, I can and do supply all you need to know to build and nurture a list.
The Free Cheese Secret™
Start by getting a free copy of the first 12 pages of my 70 page marketing workbook called; The Free Cheese Secret™. And, even if you don’t decide to buy the rest of it, the first 12 pages covers the basics.
In the book “free cheese” represents samples or giveaways that are used to get people on your list. The secret is how you can market without offending the people on your list and that is important. Because it is this relationship that makes you money.
The last thing anyone who is building a list will want to do is damage the relationship they have with even a portion of the people on their list.
The secret of my book then, is how to market to the people on your list without pushing. This is often called the pull-through marketing process and it has become uncommon with online marketers, mainly because they don’t even know what it is.
One thing you will love about list marketing is it can be done part time. As a matter of fact, once the list is built, it is easy to make money in a few hours a week. And, the business can be started as a side hustle, too.
Why is marketing to a list recession proof business? Because people need to make money and, during tough times, they look for alternatives. which you can easily supply.
For instance, you could use The Free Cheese Secret™ workbook to market to a list. Or even to build it.
Ideas of how to market are in the workbook. But how to use other people’s products to start, that I will send to you. When you get the workbook sample, you will automatically be enrolled into my list and you can opt-out as easily as you opt-in!
By the way, you can use this recession proof business concept to replace some of what you may have lost during the COVID-19 and, that part time business will be a Plan B, in case your full time gig ever fails.