How to Recession Proof Your Business

Let's talk about your business strategy and the juicy details of what actually works from mainstream fashion to fashion on Main street and the entire ecosystem behind it. How do we scale your company and do it with the balance and the happiness that we all seek? Let's hear from those insiders, experts and strategists that actually make it happen. I'm your host, Ashley Alderson from the Boutique Hub and I can't wait to chat.

Hey guys, it's you and me and probably one of the most important topics we are going to talk about in a while. It's just a solo episode today, but I'm coming to you from late night in my office just really thinking about what's happening in our industry right now and I'm sure it's something that's definitely been on your mind too. I feel like I have this question every day about how are sales and boutiques right now and what's happening in these other businesses and what do you think is going to happen with the economy? And I always think of this phrase, how can we work on recession proofing your business? How can we make your business one that is tried and true throughout the times? Because we know that retail is not an easy business. It is a business of many highs and many lows. But it's about how we ride out those highs and lows that really determine what is the future going to be for our business. So tonight, today, whenever you're catching this episode, I just want to share a couple of quick tips that I think might be really helpful right now. I always want to start off with this first. I think that your mindset as it pertains to this topic is incredibly important. I'm not about toxic positivity and it's all roses, right? We're wearing rose colored glasses. Not at all. I'm about seeing things realistically. But I also deeply believe that everything in life is can either be happening to us or for us. And there is opportunity in every bad situation if you choose to look for it. But sometimes, and geez, especially right now, you guys, if you turn on the news, there's so much doom and gloom, there's so much negativity and there's so much fear. And it was like this at the start of the pandemic as well. So I don't want you to get lost in that. But I do want you to start looking for what the opportunity is going to be for you moving forward. Here's where I would suggest we start with this. All right, Three big tips on this topic for you today, number one is, as we're thinking about an uncertain future. As a business owner, it's always important first to start to identify in our P and L, in our income, in our expenses, what is the difference in an investment versus an expense? Because when times get a little bit tight, or when sales maybe just aren't where they were last month or this time last year, we really have to evaluate why this is happening and not just run after our P and L and our expense category with an X, trying to chop everything up to save money. Because we cannot save our way into prosperity, we can never save our way to success. We have to put just as much emphasis on building new revenue as we do on saving or slashing expenses. So when I ask you what is the difference in an investment when versus an expense, it's because I do want you to consider going lean in your business. What are the things you can eliminate, but also what are the things that are quote unquote expenses that are actually making you money? So that might be an example, like payroll, right? It's easy to think, oh my gosh, I've got a slash hours, I've got to save payroll. This is probably my biggest expense that I'm paying for those of you who have a team. But that expense is actually an investment because when you're paying other people to help you, that time that you're paying for is there because it's creating you more money, right? It's building new resources. If your team is focused on income generating activities or if they're taking on the day to day tasks so that you, the CEO can focus on income generating activities, then their activity is creating more time. When you create more time, you can create more money. Because money is infinite, time is limited. So we really have to balance that relationship in our mind. So don't go running and slashing payroll, okay? Look for opportunities to get lean and things like unused apps or unused subscriptions or negotiating your lease or your insurance policies, things like that, where you can save a little bit. But be careful with those things that are actually investments that are providing you a return on investment. I often also use this example. This sounds very self serving, so please hear me out. But when you work with places like the Boutique Hub, right? One of our goals at the Boutique Hub is that your membership should always pay for itself because we're negotiating so many other deals and discounts that you're using every single day with partners like Comet Sold or at Office Depot or Hertz Rental Car, right? Or you're printing. If you're using some of our, our ehub, like our shipping partners, you're saving a ton of money, right? So there's things that should pay you back in terms of memberships or education. If you've been investing in yourself, if you are working right now with a one on one coach or mentor, now is not the time to stop. Now is definitely the time to double down. Because chances are that mentor or that coach or that accountant that you're working with, that's an investment, it's providing you an roi. So go back, look at your P and L and think about what is an investment in my business versus what is an expense and where can I go Lean. All right, now piece number two is we've got to actually look at the data, right? So it's easy to look at the doom and gloom of the news and say, oh my gosh, our businesses are doomed to fail. These numbers, the stock market, all this stuff is happening. But I also want you to think about what is working because it's always easy to see. It's easy to see what's not working, right? But what is working?

I want you to ask yourself that question.

So as you evaluate your business that could be going through your sales and saying, okay, what is actually selling? What products, what categories, what brands, what sizes, what channels, what types of launches? Are the things selling in a certain assortment mix or are they in a collection or a category? We've really been working on what is working right now and where can I double down in that investment versus focusing on what's not working? Because it's always easy to find those things. So don't let that doom and gloom of what's not working slow you down. Now, you guys, excuse me, I've got a cold as I'm trying to talk about this. So I'm going to be like sniffling and sneezing in your ear this darn summertime cold. So as we're thinking about what's working, I want you to take that then into your product categories. And then as you're thinking about what you're buying in your business right now, whether you're a home decor boutique, an apparel boutique, a children's boutique, you have a couple of main categories. Typically there's things that are your bread and butter category, right? These are the things you sell in your sleep. People know you for them, they come back to you again and again and again. That's bread and butter. Now the second category is margin builders. These are where you know you can buy low and sell high and build a ton of margin. Those are your two most important categories right now to really think about doubling down on where you may have had a lot of traction in the past, but it may get a little bit sticky for you right now is trend, right? Buying things that are absolutely the latest on trend. We all need that. We all need that trend to keep pushing us forward and to look new and have things that are fresh in the eyes of our customers. Because I'm always about Ricky Bobby. If you ain't first, you're last, right? So trend is important, but when consumer spending tightens, people buy less trend. So while you have to have it, you may not need to have as much in that category. So be thinking about that Now. The fourth category I want you to think about is your upsells and add ons. So these are things that may be bundles, they may be gift sets, they may be seasonal, they may be your at register add ons like your feel good items. This is also a really good time to think about that. If you go back to 2009, I love this stat from 2009. Many of you who are at the Boutique Summit, who are in the hub every day have heard me say this, but it's so powerful. Back in 2009, during the recession, lipstick sales were at an all time high. Why is that? Well, there's a couple theories. Number one, women specifically, which many of you sell to women, that's your number one customer, your number one demographic. Women always want to feel beautiful no matter what's happening at home, right? I have this little saying in my bathroom. It's like a little plaque. Someone made me one time and it says, just put on some lipstick and handle it. Because really when you look good, you feel good. And when times are maybe tight for a lot of consumers at home right now, maybe they're not traveling or making some of those choices. They want something that's going to make them feel good. So for you and your business, what is that thing? What does that add on that upsell, that beauty item, that trendy piece? Or just how you're marketing things that can still make your consumer feel good, There is definitely hope for you. And that really shifts into tip number three. And that is really shifting away from marketing wants into needs, right? So we talked about there's opportunity in this recession, right? There's opportunity for women who are still going to be spending even when the market's down. So how do we appeal to that? It's not just shifting on trend. And what you want and what the disposable income you have is, you know, going to buy on a whim. But it's more like what do you need? What is smart? How can I make my consumer, my buyer, my customer, my community? How can I make them feel really good about the purchases they're making right now if they are really slowing down their spending and that's appealing again to their needs versus their wants? How do you do that? Well, it's things like your daily collections. It's thinking about where is my consumer going? Maybe she's not spending money on airline tickets because it's crazy expensive right now. She's having a staycation, she's going glamping thing. She's choosing less expensive activities. What are those activities and how can I outfit her for them? How can I outfit her kids for them? How can I outfit her home so she feels like she's having a vacation in her backyard and not traveling and spending that money on gas right now? So how do I think about who my consumer is? What is she doing? What does she need? How can I fill the need? Because it's a need versus a want. Your consumer's got to feel like they're winning at the end of the day and you help them do that. So there's never been a more important time for than for collections and really honing in on speaking your customer's language. So guys, that was super quick down and dirty version of three quick tips that I think are really important to help you recession proof your business. And as always, it goes back to a couple of key pieces of data when you're really penciling all of this in. And that's what's my goal at the end of the day, what do I want to get out of this business and what makes it worthwhile for me. And then what is my daily break even in order to meet those goals, what do I have to be selling each day and what do my expenses have to be at each day so I can break even and continue to grow? And then what is my contingency plan moving forward? Remember, this is not the first time this industry's been here. This is not the last time. And you are not alone. There's a lot of highs, a lot of lows. There's still some of you that are selling like gangbusters. Keep going, keep going. There's some of you that are even with where you are. Keep going. And there's some of you that are trying to figure out what in hell is happening. Keep going no matter where you're at, you guys, I want you to know that myself and our entire team at the Boutique Hub are thinking about you and talking to industry experts every single day to find new tips and ideas and strategies that can help you through times like we're in right now, because we know this is only temporary. The sun will come out tomorrow and there will always be a rainbow at the end of what's going on here. So we've got you. And whether it's every week here on the podcast or those of you who are members in the Hub, we're now going live two days a week with mentor sessions and live training and 60 seconds smarter videos inside of the app to get you this information as fast as we receive it ourselves. To keep you on the cutting edge in terms of what is happening now, I wanted to make a special invitation to you because I think FaceTime is so important. So we're hosting something and if you're catching this podcast after the dates have passed, make sure you follow the link anyway because we'll be sure to get you the replay. But we're hosting something special just for you called Summer School. Now, Summer School is an opportunity to come live with myself and a couple of our ninja warriors here at the Boutique Hub who are all about growing your business. That's Jeff Fenn, who is our SEO and ads expert, Shannon Gordon, who is our content queen, and Sarah Burks, who is all about building your team, growing your inventory and managing your financials. And. And we're going to deep dive into what it takes to truly recession proof your business on four different days of live trainings. This is happening May 31st through June 3rd. It's completely free and it's over Zoom. And we're going to get to see each other face to face, which I love and I hope you're as excited about as I am. Again, if you're catching this beforehand, you'll be able to join us. If it's after, I hope you have an opportunity to sign up and catch the replay. Or we are hosting it inside of the Boutique Hub membership. All the replays in the training library. So if you're a Boutique Hub member, you'll have access to those trainings immediately. But guys, come and join us for those four days of summer school so we can talk even more about recession proofing your business. So I hope this was helpful, this little late night rant from me on what I think your business might need right now. And if that's not you, let someone else know who maybe is in that boat. You guys, as always, please let me know what you think of these episodes. I love coming to you heart to heart and just sharing what I hope is helpful. So send me a message over on Instagram if you get a chance. It's A.J. alderson. Or you can always message our team at the Boutique Hub on Instagram. Let us know if this helped, what questions you have and what else you would love to hear from us going forward. We're always here for you guys. I hope you have a tremendous week. I hope to see you at summer school and I can't wait to be back with a guest for you soon. Have a great day you guys, wherever you are. Foreign.

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