How to Keep Your Business Alive During a Recession

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Thousands of businesses are struggling to keep their doors open and millions have lost their jobs. This episode focuses on 3 important strategies that business owners can apply in their business to buy time and thrive during these difficult economic times.

Thousands of businesses are struggling to keep their doors open and millions have lost their jobs. This episode focuses on 3 important strategies that business owners can apply in their business to buy time and thrive during these difficult economic times.

Jay Feldman 0:02
What’s up guys, welcome to this episode of the mentors collective. I’ve got my best friend Tom here, who’s been crashing in Orlando. We’ve been working on some business for the past week or so. And he’s going to spend some more time we’ve been doing a lot of good work and we wanted to jump on and share with you some of our insights and just have a discussion about kind of what’s been going on in the business world. We’re in the midst of the Coronavirus pandemic, wave to version two and coming back with a vengeance. Tom and I are both in the live event space or have businesses in there. So we have a particular point of view when it comes to this. And hopefully we can bring you some value or just kind of sympathize with you because I’m sure if you have a business has been effective, just most people, you know, we might be able to lend an aid. What do you think, Tom, thank you for coming and being on the show with me.

Tom Worcester 0:46
Absolutely. Thank you for having me. You’re in live event I’m in live event. There are no live events. How do you play this? How do you sustain this? How do you make sure that the brand is in a position to survive to the other side of this? And there’s a lot to think about right? How do you feel At the business, how do you cut down on expenses? And most importantly, how do you still treat and sell under that brand at a time where it really doesn’t make sense to?

Jay Feldman 1:09
Yeah, that’s a lot of really good points. And to that point, you know, there’s a lot of people, our customer base out here has been hit even harder than us. So the most important thing to remember right now, and which I keep reminding myself every day, is no matter how hard my business was hit, we’re still fortunate to, you know, be in our own control. We weren’t laid off and trying to sell and push things down people’s throats, who just lost their job and they’re in a needed worse position. I mean, that’s a whole nother ballpark. You just have to sympathize more than it’s a time to stand back and say, I’m grateful. What can I do to help you so that when we do recover from this economic disaster, those customers are still there, and they’re loyal to you?

Tom Worcester 1:48
Absolutely. And in a social media world and the social space people have long memories, mainly because everything is preserved. So in a world where customers stand by you, it’s probably because you’ve been doing the right thing, putting the right information in front of them and showing them that it’s more than just a business. A lot of businesses are going with the Hey, run Facebook ads when people are getting fired, and it rubs them the wrong way people remember that. And they remember that feeling. And then like nobody ever forgets, when they’ve been insulted or when somebody is gonna hit the wrong tone of the right not the wrong time. And so as a brand, you have a responsibility to make sure that you’re kind of reading the heartstrings of your customers and also doing right by them.

Jay Feldman 2:25
Yeah, absolutely. And it also posed a lot of questions for entrepreneurs with brands is kind of what do you do right now? I mean, you know, you don’t go back into your shell and stop making money you need to keep the brand and the business alive so you can keep serving your customers, I guess it’s about finding that balance and that fine line between figuring out how to pivot what to sell how to sell it, and the right tone of message right to give to your audience,

Tom Worcester 2:48
right. So the we’re going to break this down a little bit. I like to boil it down to three main points. Jay. The first is be agile, right? And what what is your business going to do now to drive other recurring streams of revenue that can get you through this right? What new business opportunities are available? What are some new ways you can look outside your core business? admittedly one that you’ve built and maybe you’ve built emotionally so but one that you build in now needs to change? How can you be agile and find other places of revenue? Number two is get lean. So now that you have this new playing field, this new chessboard, what do you do within your existing business to make sure it survives as long as possible? As you know, cash is king. So how can you preserve cash in a month to month basis? How can you cut expenses? How can you get rid of the waste cut the marketing’s pen, so you are spending no more than you need to survive? And three, as you kind of touched on already, is be authentic, be real, be empathetic. Your customer base is still filled with people in the real world when things happen like a pandemic that affects everyone. And so our responsibility as brand owners, at least the way I see it, is that we have a responsibility to our customers, which means that you need to understand where they’re coming from, how they’re feeling, and you need to communicate within those parameters. Because otherwise

Jay Feldman 4:00
you’re just not going to get it. I love the framework. And like I said, it’s about finding that fine line between keeping the business alive and being authentic and not being tone deaf during this time. Right? So using that framework of those kind of the three pillars that you just established, being nimble was the first one nimble, agile, whatever you want to call it. That’s your ability to pivot, figure out different ways to maybe make money yourself during the times, kind of an evergreen way of thinking about it being very with the times. Let’s hover on that one for a second. Okay, so what are some examples? I know I have mine in my own business that I’ve adapted to and brought on in the last, you know, three to four months. But what are some of the things that brands can do right now, to kind of pivot I’m just gonna leave with one of my top piece of advice. as entrepreneurs, people who have built built brands, the both of us we have a very diverse and very skilled set of tools to build businesses that we take for granted and don’t really acknowledge for example, you are a MasterCard Community builder. And Tom just helped me shoot a professional product catalog in like two hours by multitasking. He’s got professional production equipment and he didn’t even he hasn’t been selling his services and this equipments been going a waste, but

Tom Worcester 5:13
it should be used. Yeah,

Jay Feldman 5:14
yeah. So that’s just one example what what talents, what tools do you have laying around, that you can leverage during this time to help other brands build if it’s not your own, if you need to take a step back, because maybe you are in the live event space or the hospitality space. And your business has been particularly affected? What tools do you have to continue the revenue stream?

Tom Worcester 5:34
Absolutely. And I think you do a really good job of this because you’re you’re willing to experiment you have experience on the services side, you understand how to leverage your internal skill set on my side, for the product side, it’s been a little bit harder to make that immediate transition, but kind of recognizing that the things that make a product great are still services that are in demand and so kind of for us, we’ve been figuring out how do we make our marketing team work for others. Others who aren’t doing well at a time like this e commerce space, especially as seen his amazing new category deemed the new essentials, where people are now ordering things to home that they previously wouldn’t get. Think about your groceries. Now people are getting more toilet paper delivered to their house, when they got it when they picked up in person. Think about meat delivery, think about even things like laundry detergent, the things that you normally would have picked up are now coming to you in the home. And so those businesses are doing well. And so speaking of the agile, how can you leverage what’s in existence within your brand, to another brand or service to them, make them work in the short term so that you can also survive in the short term. I know you’ve done this a couple times with a couple different agencies. For you what are some of the keys to being agile and assessing where a business might be able to go relative to this new situation? Sure. So I can just give a few tips from my experience in terms of

Jay Feldman 6:51
figuring out what service you can offer that actually selling that service. I have started several different marketing agencies. I’ve been in the digital marketing space for a while now. In the PR base. And I’ve, you know, built teams that between the two of them doing seven figures. So I think a good place to start here is I think people get held up on a website, perfect example, but people do. The trick is just to start selling and start selling low and build up a referral base. There’s a lot of good places to prospect clients, social media being one of them. But also don’t take things like Fiverr and Upwork for granted. Obviously, I’m not on Fiverr and Upwork doing manual labor myself, but my profile is there and it’s built out and we have incoming leads coming every day. And when those leads come, those are agency clients that I just funnel through my you know, through the machine, right, and I have a team of about it’s about 20 people total now that that are able to make everything happen,

Tom Worcester 7:47
including you know, vas and whatnot. On the nimble side, how do you figure out what existing infrastructure you might be able to use on something else?

Jay Feldman 7:55
So figuring out what existing infrastructure This is where creativity really plays a huge part Taking a step back from your own business and saying, Okay, what did I do really? Well? What was really, really good? Am I in my business? Or what are my strengths? What are the tools that I have not just physical tools like camera equipment, but what are the human resources that I already have in place? Right? What are they trained to do?

Tom Worcester 8:15
The human capital?

Jay Feldman 8:16
Yeah, human tools, physical tools, that’s all gonna come into play. When you really take it and combine it to figure out what the bigger picture is. There’s no one size fits all here. This is like people asking what business should I start? Right? There’s no answer

Tom Worcester 8:30
the eliminate on the street million.

Jay Feldman 8:32
This is what makes entrepreneurs such a rare breed. It’s their power to adapt and be creative. So I don’t have a you know, a one size fits all you should do digital marketing, you should do branding. You should do video, right? It’s, it’s really, what are your talents? Yeah. What are your tools and figure out a way to be different and stick out in the marketplace? Because God knows there’s a zillion social media marketing agencies out there. So how are you gonna compete with them starting from zero,

Tom Worcester 8:58
totally. And I think for For us to make a little bit more real. So the base business that we have is lunch box where we sell anti theft hydration packs, slink packs, fanny packs for people who go to event and want to have a better experience doing some event or shut down. So obviously the hits the main business, but the things that we’ve done well in the in the process of building lunchbox where video storytelling, community building and branded content, we did a really good job of building a very personal relationship with our users. So they would refer and share, attend our meetups and really loved the brand. So when we took a step back, we had all this infrastructure built, we had editing teams and videographers and photographer and the ability to write scripts and the ability to churn out new ideas. And while it may not have immediately applied to our core business, we recognize that was a very valuable skill for other e commerce owners who were scaling at a time like this back to the category of new essentials or possibly selling hand sanitizer, whatever it is, but to help those people and to use those existing assets, which probably aren’t just assets but their system, their processes. To experience and leveraging that for another brand has become kind of one of our eminent qualities in terms of where we go next with developing our business, we took a stock of what we do well, we realized it was video and storytelling and using that to bring people together. And then we paired that with brands who really needed it in the e commerce space.

Jay Feldman 10:16
That’s a perfect example that we just talked about. And I know we just covered a lot on how you can leverage your tools to service other businesses. But there’s also a lot of other ways to adapt. I know my ex girlfriend, I’m gonna bring her up, she’s gonna kill me, but she makes bikinis by hand. And obviously with the beaches pretty much closed and then they just started to reopen, but girls aren’t buying hundred dollar bikinis anymore, right? She’s a seamstress. She now makes masks right and has sold several thousand masks that are hand hand sewn and really cool masks. So obviously there’s those you know, the obvious ones, but making masks making hand sanitizer, making cleaning and safety products that people really need right now right back to the one size fits all thing. I can’t tell you how to you know, maneuver For your production and your products, but there are a lot of opportunities and new products that people need. So it’s not just services, there’s a lot of other ways that you can adapt.

Tom Worcester 11:07
Absolutely. So let’s move on to the next big pillar of managing change, which is get lean. So we’ve talked about exploring your other business opportunities. But what about your existing business? What do you do to make sure it stays alive? And the truth is you got to get cold calculated and look at the numbers. So on one hand, you’ve got staff and your staff is powerful and loyal and dedicated. And on the other hand, you have all the expenses that don’t necessarily need to be there as a result of what’s changed in the world. Let’s take live events again. For example, our marketing budget went from six figures to zero overnight, our need to go rent office space actually went from more five figures of rental expenses to nothing to know everybody’s working from home, our need for software and email marketing came way down, and then we cut that by over five figures. And so across the board, we made the necessary cuts to our business. So Africa We had a fair amount of cash, we have low expenses every single month. And by doing that, we buy ourselves the amount of time that we need for the existing team existing infrastructure and existing processes to figure out where we need to go next. So by buying time and preserving that core business, you give yourself the breathing room to say, Okay, so how can I use my assets? So you really can’t have the first conversation of, are we being agile? And are we assessing what opportunities we have without cutting costs? So you give yourself the time to do so? Because if you run out of cash, then what happens?

Jay Feldman 12:32
Yeah, so no one’s best interest if you run out of cash. Absolutely. The name of the game right now is keep your business alive until the economy recovers and things turn back on

Tom Worcester 12:40
Success is survival, Jay.

Jay Feldman 12:42
Yes. And you’re not going to be doing any of your employees favors by keeping them on high payrolls, where you the business eventually dies, and everyone dies along with it. Yeah. So the trick right now is leaning out. And we’ve done this in a lot of different ways, and we’ve done our best to not lay off people Huh, which is hard. You have to cut recurring payments right now are nightmare. Yeah. And employee and contractor payments are a large part of that for us. Right. So the trick is how do you maintain your business? while getting rid of all the unnecessary expenses? Obviously marketing goes first marketing always first. Yeah, there’s there’s no debate marketing’s first then you look at what are your software expenses, right? What are your costs of doing business? What are your office expense? What

Tom Worcester 13:25
can we afford to cut payroll by?

Jay Feldman 13:27
That’s a conversation that you definitely have to have. And by the way, it’s a tough

Tom Worcester 13:30
one, because on one hand, your staff is what makes a lot of the things you’re able to do possible. But on the other hand, your point and everyone that full payroll and you run out of cash in three months, it doesn’t serve anybody’s best interest. Yeah.

Jay Feldman 13:40
And when you cut your marketing and sales, stop and slow down. The reality is you just don’t need the full capacity of your old team anymore. No, and it’s a horrible thing to have to, you know, tell people you’re furloughed until further notice. But sometimes it’s a necessity to keep your business breathing, which is the name of the game, right? There’s some other ways that you can cut costs and you talks about email marketing, right? That’s kind of a hard one to cut. I know we kept our CRM or email marketing. I know we’re not doing as many emails now, but obviously manage our list. Yeah. But the first thing that we did, right, as soon as everything hit cut marketing budget, look at our recurring payments, right? What the hell is in there, right? And a lot of that comes from software costs, technology costs, and we have a lot of proxies and servers that we rent that we didn’t necessarily need at this time. Okay, that we put on hold. So that was an easy one. Goodbye. Goodbye, Good riddance. And, you know, there’s I went through with my business partner and we looked through all of the things that we were paying for every month right? And if you haven’t had I done this yourself and had a hard look at your own recurring payments, go have a hard look, I bet you’re gonna find at least three to five things in there. You’re like I haven’t used this I definitely don’t need this right. That’s the second thing that I think you should do versus shut off your marketing if you know Unless Unless you need to unless it’s still earning you money, which is probably not second go through recurring payments. And third is have that difficult conversation with your business partners and your employees. contractors and figure out how much can you reduce their pay by For how long? And you know, how much do they really need to live? And just I like the transparency. Yeah, the transparency here really just letting them know where we stand right so that there’s no bad blood in the water. I mean that the economy does come back and you want to continue relationships with that person, your human assets are some of the most important right to be fully transparent, figure out what you can afford, and have that conversation directly.

Tom Worcester 15:26
And that kind of gets into the third pillar of what we’re talking about today, which is be authentic. So you’re talking about being clear, authentic and transparent with the people within your business. But how do you now communicate with the people outside of your business where you still want to maintain that relationship, their potential future by customers? How do you maintain that? Let’s bring it back. Let’s make a real COVID era, the era of social movements. We have so many things to talk about and discuss where the collective social consciousness is more important than your business. It’s more important than my business. The world is changing, and we have to be empathetic. Deeply authentic and how we communicate, otherwise we’re not with it. So just like the pandemic effects of just like a social movement effects of just like we are seeing society change day by day, the President is not on us. And so as part of that, you have to recognize that your role in the buyer journey has shifted silent and letting the bigger issue have a habit today is sometimes more important. Because the flip side of that is, if you decide to add your own commentary, when it’s not asked for it can rub people the wrong way. You can put CrossFit where the owner is decided to make a very off color joke about George Floyd and all of a sudden store closures and across the country and then the withdrawing of Reebok from their sponsorship list. or worst off, you take attention away from something that deserves to be seen. And so it’s the it’s the perfect anti marketing case, right. On one hand, you want to fuel your business but on the other hand, the problem that society is facing is bigger and more In the product you’re trying to sell. Benjamin Graham, the author of the Intelligent Investor says that individual performance is always trumped by market dynamics recognize that it’s not your fault that they’re the pandemic is not your fault that has turned out this way. But you do need to be empathetic enough to understand that newer marketing isn’t going to solve that problem for anyone. And actually marketing might make people turn off of

Jay Feldman 17:23
your business. Yep, it’s absolutely true. And one of the big points there, you mentioned CrossFit, things similar to that are happening all over the country and a much smaller scale, right? The bagel place that I love to go to right down the street, right, close their doors because of an off color remarks. So just as the right sort of authenticity can help your business right connect to their customers and keep them loyal. the wrong message, the wrong one message, right? Does that Yeah, takes us think of Warren Buffett who said it takes years and years to build a reputation takes one second to end. Yeah, and a lot of people are going out of business. So the moral of the story here is be authentic, but be very conscious of it. What’s going on in the world be extra sensitive. And they, like you said, take a step back show with the marketing and just lend a hand however you can.

Tom Worcester 18:09
And by the way, if we go back to our first two pillars, be agile and get lean, and you’ve done these things, you’ve gotten lean, so you can afford I say afford with frequent quotes, but you can afford to be a little bit more silent. And because you’re being agile, you can find other ways to drive that revenue that isn’t necessarily consumer facing, whether it’s business to business services, or one of your many other skills. So the be authentic, I’m sure some listeners are hearing that and saying, Oh, yeah, it’s easy to be authentic. But if I’m not making money, my business dies. Well, at the same time, if you lose your consumers, your business will die anyway. And if you’re not getting lean and looking for other options available, then you’re not doing all the you can to build a healthy and sustainable brand long term.

Absolutely.

Jay Feldman 18:52
And the the phrasing be authentic, the word be authentic is kind of be a little bit confusing. Maybe not confusing, but the call to action is there. Yeah, I know, I have my own version of what I think the authentic means. I’m sure you do too. What are the what what is the authentic mean to you. So for me being authentic with business anyways is being very socially conscious of what’s going on. And instead of the normal marketing, the normal quotes and whatnot, directing my audience are very fortunate to have a large social social reach through all of our business channels. So we use that to promote good things that are happening in the world and direct our audience to contribute to the right places, for example, right, what’s going on right now is the Black Lives Matter movement, which I’m very passionate about, and we’re able to direct our following to the Donate links, which is just this really simple, awesome thing. Yeah. To deal with in the times.

Tom Worcester 19:42
I would add one more thing to that definition, because I agree with you, and it comes back to the word empathy. You need to put yourself in your audience’s shoes and think about how they’re feeling. And then the authenticity element is you are communicating to that feeling, rather than saying, Oh, this is how I think they feel so if you know someone is scared and frightened just lost her job. And you know, that’s who you’re addressing and marketing to that tone is very different than it’s like okay, well, we’re gonna very authentically give you 25% off is just like that’s, that’s still tone deaf. And so understanding what your consumers really feeling is the key to authentic and heartfelt communication. That’s a great explanation that’s much

Jay Feldman 20:17
better than mine. And I couldn’t agree more. And like you said, at the very beginning of the video, people are a lot worse off than we probably are with our business 100%. So that’s where the authenticity comes into totally empathizing with your audience. And again, there’s no one size fits all No, some businesses are going to be in a position to be authentic differently than we might be right but just finding finding your own way the primary principle here is just to keep your eyes and ears open, figure out what’s going on in the world and match that with what the tone of your business in your marketing Yeah. Okay, awesome.

Tom Worcester 20:48
So if you are a brand in the COVID era and the world has changed your the standards shifted below your feet, you may feel like there’s nothing you can do but there is if you get agile and try To explore your business opportunities, you get lean and maximize your runway and you communicate authentically to preserve your customer base. The road may be challenging, but there will still be a road.

Jay Feldman 21:11
Okay, thank you Tommy. With that being said, if you’re an entrepreneur out there and your business is suffering from COVID, hang in there. And now’s the time to follow these three principles, consume positivity keep contributing to all of the good things happening in the world. And we’re already seeing some return in the economy, which is very promising, and I’m hopeful for the future. I think in the next six, six months, everything should be relatively normal, but all we can do is keep our fingers crossed,

Tom Worcester 21:39
and hope that there are no more giant murder Hornets coming out.

Jay Feldman 21:42
No more murder Hornets and stay inside wear masks. The sooner we can beat this, the faster we’re businesses and our personal lives will get back to normal. Thank you for joining us on the mentors collective. If you love this episode, please drop serve you. Thank you so much for watching this episode. of the mentors collective. This is Dr. Jay Feldman. And I just wanted to take a moment to thank you so much for your support and also ask you for a little bit more. If you can take the next 10 seconds and write us a review on iTunes, Google Play or Spotify. Just let me know your feedback. It means the world to me again, thank you for watching. If you love this episode, please share it with your friends. Share it with your family. Until next time!