2022 Recession: How to Survive

Summary

• Understand that being informed about recessions allows for better preparation and increases the likelihood of success.
• Realize that during recessions, unemployment rises, leading to a surplus of labor that may reduce staffing costs.
• Acknowledge that purchasing power generally goes down in a recession, causing people to cut back on non-essentials and large expenses.
• Expect manufacturing to decline as businesses cut down, which can ironically lead to higher prices due to reduced supply.
• Reflect on the COVID-19 pandemic as a learning experience similar to a recessionary environment, particularly for my businesses like gym launch, Prestige Labs, and software services.
• Remember the importance of creating a financial decision-making framework in anticipation of revenue changes.
• Embrace a positive outlook on recessions by viewing them as opportunities for improvement and testing your business's strength.
• Foster a sense of camaraderie within your team, especially when facing challenges, as it helps build a stronger collective force.
• Communicate frequently and transparently with your team, shifting from a peacetime to wartime mindset as necessary.
• Prioritize direct communication with clients and be prepared to work extra hours to maintain client relations and business health.
• Plan in advance for potential revenue drops using the "fat, muscle, bone" concept to make critical decisions in a calm state.
• Educate your team on the differences between peacetime and wartime strategies and adjust accordingly.
• Modify marketing approaches to resonate with clients' current emotional states, focusing on preservation instead of growth.
• Act despite personal feelings and look for ways to use challenging circumstances to your strategic advantage.
• Acknowledge that business challenges are not unique and use them as opportunities for team development and personal growth.

Video

How To Take Action

I would suggest making a plan now for the tough times ahead. Think about your business like it has fat, muscle, and bone. If money gets tight, cut the 'fat' or things you don't really need, like maybe some extra services or luxuries in your business. If it gets worse, you might need to cut down to the 'muscle', which could mean letting go of some things that are good to have but aren't absolutely necessary. If things get really bad, make sure you only spend on the 'bone', the things your business can't live without.

It's also important to know when you're switching from 'peacetime' to 'wartime'. Read the book "The Hard Thing About Hard Things" to understand this better. When it's wartime, you work harder and focus only on what's really necessary to keep your business going.

Change your marketing so it talks to people about getting through tough times, not just reaching their big dreams. People want to feel safe and be sure they can take care of the basics when they are scared.

And work hard, even if you're worried or scared. You can't just blame a tough economy for your problems. Use this time as a chance to make your business and team stronger. Remember, you're not alone in this. Every business has hard times. It's your chance to grow and get better.

Quotes

"I say this to inform you because if you're informed of the situation then you can properly prepare for it"

– Leila Hormozi

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"Recessions are really good for the winners and they're really bad for the losers"

– Leila Hormozi

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"Camaraderie on a team is formed when you guys all have your back against the wall and you have to work together to drive out of that situation"

– Leila Hormozi

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"Communication and messaging when times are hard is the number one job of the leader"

– Leila Hormozi

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"The best Founders act despite how they feel and they will win despite circumstance"

– Leila Hormozi