How To Recession-Proof Your Small Business

Grab a notebook, grab a pen, sit down, grab your spouse, let's talk. You guys, this week we're getting super real and transparent all about making a recession proof plan for your business. And I am so honored to have Stacy Tushel with us today who is the host of the Foot Traffic podcast and a small business expert. And we are literally walking through the steps today of what you need to know about if there is a pending recession or what's happening, the buckling down that we're seeing. But what you can do right now to be working smarter and not harder in these times. Because I'm here to tell you what you guys, there's a lot of fear mongering out there. There's a lot of the sky is falling Chicken little type things that I'm seeing. And I just want you to know that there is a whole community of people here, not only at the Boutique Hub, but with so many friends and partners that have got your back. Right? We are going to help you see the forest through the trees in terms of what's happening and we are not going to let anything get to you. We're going to get you every tool and resource possible and that is exactly what the plan was today with Stacy. So I really hope that you love this podcast. Go ahead and give Stacy a follow and a listen on her podcast as well. And I hope you find tons of nuggets that you can take and put into place right now in your business. You guys, I have tons more on this topic in today's show notes for this episode. So please go give them a listen, grab a link to our recession proofing your business toolbox and let's get to work. You guys, I've got your back. We have got this. Now let's go. Let's meet Stacy. 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. Well, hey Stacey, thank you so much for joining us on the podcast today.

Hi Ashley, thanks for having me.

I'm so pumped. So, lots of things happening in the realm of business right now and I want to start right here. And that is with so much negativity spinning around, highs and lows and Recession, not recession. Have you been talking to your audience about, like, what are three things we should all be focusing on right now?

Yeah. So whether you believe this is a recession or you're. You're in denial or it's not going to happen, it's happening. I mean, we're. We're here like that. I should say it's happening. Some people are so in denial that they're not taking actions as if it's a recession. So it doesn't feel like a recession quite yet. But I was in business back in 2008, and I remember kind of like this, like the calm before the storm, and the storm is definitely about to happen. So what I'm doing to proactively be thinking about how this could affect me, how this could affect my clients. Right. All of the things is first, I think always just having as much cash on hand as you possibly can have is just the smartest thing to do.

Right.

Because the person that can hold on the longest will win a recession. The pandemic. Right. It was all just survival of the fittest. And usually cash flow is where people have to give up first, is that they just can't hold on anymore. They don't want to go into debt, or they can't even afford to put any more on their credit card, and they just get into trouble. So I think, number one, we should. I mean, we should always have a cash reserve. But definitely now is the time to be making smart decisions. So I think that's one, is be thinking about your cash flow and just like, how are you sitting right now? Number two, don't be so cheap on the things that actually could help you. So, for instance, people will give up on coaching or they'll get cheap on certain things that the customers can feel. Well, when a customer can feel you're getting cheap, what are they going to do? They're going to stop coming to you? Or when a customer thinks you're in trouble, they're going to find somebody else with more security, Right?

Yes.

I mean, we leaned into coaching when the pandemic hit because we just knew. Why would I not use a collective group of people going through this together? And let's brainstorm together and fast track, like, what's working, what's not. So I think those are my. Those are two things, but those are the first two things that come to mind of, like, start smart spending. Stop that spending. That's not really helping. Lean into the resources you have. Lean into coaching and surround yourself with people that are like, same as you like, we're making it through this, so I'm along for the ride. Let's figure this out together, man.

We have just had that exact conversation inside the Boutique hub about how important it is right now that everyone rallied together and there is just so much negativity. And what if, like, we have to lean on what is working and avoid the constant posts about what's not working and complaining about that?

Well, yeah, you sparked number three. For me, number three is like being the optimistic, realistic leader. Right? People, they do not want the negativity, even though it's all everybody talks about. People want to have some sense of hope and be that hope for the people you're serving. And no matter what type of business you have, the more you can, like, just be. Be a light at the end of the day. Right. Do that. But I always say, like, optimistically realistic. Because if you're so optimistic, where it's like, no, things are fine, everybody's fine. It's like, now you just look delusional and you look like you don't know what's going on and you're tone deaf to the situation. So be realistic, but be as optimistic you can about the reality that's going on.

I think that's really good. And something else that you just said was, people can sense your desperation. Yeah. My husband always said he has this saying, take this however you like. Probably mildly inappropriate, but he says desperation is a stinky cologne. And I'm like, you know what? There's a lot of areas of life that is so true. And I feel like that is definitely right now. So what would your advice be for a business owner in terms of how do I just keep the excitement high? How do I keep selling? How do I keep providing value even when maybe internally I'm. I'm a little scared myself? How do I maintain that level of excitement?

Yeah. So I think what I'm really focusing on is the messaging around what I have to offer. So it's not that I'm necessarily changing what I'm selling, but I'm changing how I'm selling it.

Right.

So what do you sell and why would somebody still need it? Why would somebody need it when money is tight and you might be thinking they don't need it, it's completely extras and it's disposable income and it's. It's not something they need. But let's be real. Like, I can't remember who said this, but it was like, do you think people bought Oreos during the pandemic? When? Yes, like, of course people bought Oreos. People. People bought a lot of things they didn't need on Amazon. Right. So people will still spend money on things they don't need. But what is your messaging going to be about what you sell to make them want to buy from you? So that's something to consider.

That's really good. Now, I know you work with lots of different types of businesses, and I think this is something like in this conversation of continuing to sell and provide value, that no matter what you sell, this is important, and that is remembering that the experience comes first. What are ways that businesses that you work with really can focus on providing a great experience that's memorable more than the product itself is memorable right now?

So I think take a step back and go through your customer's journey and how they work with you and your business. Like, what does this look like? Do you have a physical business where they step in the door? Right. I love, like, the five senses test where you're, like, closing your eyes and, like, listen. Just what do you hear? Do you hear noisy construction down the road? Do you hear some nice music playing? Do you hear music that's not really the music you want to be hearing? What do you smell like? We have air fresheners inside of our. Our buildings when you walk in. Like, rooms smell good. They don't smell like we have a dance studio. So we don't want the dirty feet smell like. We want to make sure, like, it feels clean. Clean. It smells clean. Right. So look around. Like, what do you see? Right. So really kind of re going through that experience again. And also, does the experience need to change? Maybe you've done this and you've got that, but does it need to change with what is going on today in this market?

Mm, that's so good. That's helpful. One other thing that you mentioned that I think is really important right now, just going back to, again, conserving cash. Right. And getting lean, but making sure you're investing in the right things. I know something that you talk about a lot is the importance of building and scaling a team, and a trained team at that. And I think that's an area of confusion for a lot of people when they think about conserving cash and getting lean and therefore cutting expenses. There's a real difference in expenses versus investments. Talk to me a little bit about what we should be doing with our team to make sure they're fully optimized and trained and. And that this is the wisest investment we could be making with Team right now. Yeah.

Oh, so good. So an expense could be your Starbucks coffee. Like there's no value we're going to get from that. It's not going to make us money, right. You might enjoy it in the moment. It's not going to make your business money. Right?

Yeah.

Now there is a revenue generator, right? So when you say investment, a lot of times people think, well, it's an investment. But I'm not going to see that for however long. I like to look at that as a revenue generator and I'm asking myself, what are my biggest opportunities right now for revenue generators? What does that look like? And yes, there may be a temporary sacrifice of an investment to get me in, to get me understanding or to see a return on that. But then I'm asking, and how fast, how long is that going to take? Right? Because in a recession you may not have a year to get your time, your money back, right? This might be, I mean, I'm going to need a faster, quicker return. So really be weighing those options and asking yourself, I mean, literally every dollar I'm spending right now, I'm like, is this an expense or is this a revenue generator? And I am somebody that has two seven figure businesses. Like, we are financially doing phenomenal. However, I am still pausing every expense I'm making. Just like the pandemic. Like, I didn't know how long was I going to be shut down? How long, how many clients was I going to be able to retain? What were our numbers going to look like? When were we going to open back up? Like, I had no idea. I, I felt like I was acting like the brokest person alive even though we had money sitting in our bank because I was just being proactive. I want you to start being proactive today and asking yourself, is this an expense I need? Right. Probably not, right? Or is this a revenue generator?

That's so helpful. Are there other, like when you think about team and across any business, are there things that you go back to with your team right now in a time like this and you really reiterate during this time, like, let's refresh, let's retrain, let's refocus on these areas.

Yeah. And sorry, I completely avoided your team part of that question. But now I'm going to head there. Okay, so with team, a lot of times our payroll is our number one expense. So we look at these expenses, right? And we have to ask ourselves, with people, is she an expense or is she a revenue generator? Is he an expense or is he a revenue Generator. That's a hard question to ask, right? Because you're like, oh, but they're nice. Oh, she's so sweet. Like, he's so good. Like, he sent me a birthday card. Like, we're making all these excuses, right? And we're keeping people that might not be the right people in our business. So I think it's really important to educate our team without scaring them. Like, if you went to the team right now and said, we're in a recession, like, things are going to get bad, right? They might go, I better not stay here. I better find a job that's more secure in a recession, right? So you want to educate, but you don't want to scare them. Like, you need to be the optimistically realistic person we just talked about at the beginning to make people feel like, wow, she's got this. Like, I want to work for her because she's going to figure this out. And I feel really confident being here. But I also want to make sure they know now is not the time to be spending. Like, somebody actually said to me, hey, I really think we should put the addition on the building for building number two. So that's probably like a million dollar expense. I'm like, listen, we just wrapped up a pandemic. We're still in it, right? But we kind of feel like we're getting done with it and we're probably heading into a recession. So now is not the time. I'm going to put a million dollars into a building, okay? Like, we better hope that building stays maxed out. Because she was saying our music lessons are getting maxed out. We need more music space. I'm like, we better hope we're still maxed out in a year from now because we might not be maxed out. Right? So when I said that to her, she was like, oh, I didn't even think about that. I. I didn't even fathom people leaving us in a recession. Right? But some people will, because mom and dad will both lose their job and they're not going to pay for their children to be in extracurricular activities temporarily. Right? So how can we look at and how can we train our team to start thinking that way? Is this an expense or is this a revenue generator now adding on a building? Absolutely could be a revenue generator. Could be in a recession, probably not. So that's where I have to caution them of, yes, but not right now. Yes, I know we need that, but not right now. And then looking at the team individually, now is the time to get Rid of the people you should have gotten rid of already. Like, you know, who you need to fire, who's not working out, who's. Who's not following instructions. Like, you already know who they are. You've got to get crystal clear on who needs to be let go.

Yep. Man, that. That is. What do they call it, 36 hours of pain? You know, it's. You know, but when that 36 hours is over, you're way better off for it. You know, you made the right call. 100%.

Right. And when payroll is probably your biggest expense in your business and saving X amount. Right. Like, some of you might still be overstaffed from the pandemic, but you didn't make those cuts because you didn't want to or you felt bad, but you can't be overstaffed. Like, I would encourage you to look at your percentage of labor to revenue and see what your numbers are. Hopefully you have a good CPA where you can discuss this and say, how high is this? Too high? Am I. Do I have room to hire? Like, where am I at? What should I be doing? Man, that.

That is like, my husband's love language. I tell you what. He actually, we went through this report Monday morning. He is all about, like, okay, where's our payroll versus, like, this percentage of a revenue stream? So you. You do have to line that out. And another thing to really think about is I just saw this really interesting chart the other day from the Bureau of Labor, maybe, and it was a graph looking at, especially in, like, E Commerce and in product world, like, the real blip that happened during the pandemic and how as we're, like, coming back into this point in time, like a pending recession. Right. We're really just stabilizing what our growth rate was from 2019 on. If it would have just been steady. But instead, this graph was like, oh, there's this huge bubble because, yeah, so much online spending took place during the pandemic, and now we're just stabilizing.

Right.

So I think it's good to remember the sky is not falling. We're just getting back in a lot of cases to where we were before, and that's okay.

Yeah. And for those people that, you know, weren't in business in 2008, they didn't feel the recession. It is so normal to be nervous about what's to come because you don't know what it feels like. It is not the same thing as a pandemic. They're very, very different. Right. A lot of people in The Pandemic didn't lose their job. They just went remote. They still were getting the income in a recession, depending on the area you live in. I mean, I remember when like an entire plant closed in our area, and I can't tell you how many people dropped that week from our studio to say we just. Both people just lost their jobs. Right.

Yeah.

So it's. It's normal to be nervous when you don't know, but all you can do is be confident you will make it through because you'll do whatever it takes to figure it out. And then go back to those three steps we said in the beginning. You will get through it. Right. You just got to take it one day at a time and be proactive.

Yes, absolutely. One other thing I think is important to think about during this time is just sometimes a slowdown is such a breath of fresh air to resist dematize things. Like, we get so caught up in the hustle and the busy. And sometimes this is a blessing in disguise because we can say, okay, I really built this plane as I was flying it. What do I need to go back and really strengthen from the ground up? And I know you're big on systems and processes too. It's not the sexy thing everyone wants to talk about on Instagram, but it's critical to growing and scaling a business. Where do you feel like are the most, like, we'll say three most important areas to go into your business and really reevaluate the systems that you have in place. Yeah.

Systems can be overwhelming. Right. Because you're like, there's so many things we need to systematize.

Yeah.

The first place I tell my clients to start is in fulfillment. So when the second they buy, what is their experience with you?

Yes.

And if really what people do is they systematize marketing, they're like, no, no, I need to grow my Instagram. I need to get more customers. I need like. But listen, we just had a client who doubled her. She is like, program, and she doubled her numbers in one month. So she had the marketing dialed in, but then there was a lot of things that broke in fulfillment. Naturally, she is somebody that prepared, somebody that really tried to refine that. But you won't know what it feels like until you get there. Right. So you want to get fulfillment dialed in before you scale your marketing and have massive growth, or all of a sudden those people will buy and be so turned off by your experience that you will lose them coming back. You will lose them telling their friends to stop by your shop so you've got to be really, really careful that you don't focus on marketing. So first and then fulfillment. So fulfillment first, then marketing. And honestly, you can stay right there and keep going back and forth and dialing that in for a little bit. And then third comes operations. Right. Some people don't need to do operations immediately. They just need to get their fulfillment ready, get their marketing to grow. Then they have to like you kind of broke fulfillment. So then you got to go back into fulfillment, fix it, go back into your marketing.

Right.

But at some point you do have to go behind the scenes and operations.

Yeah. Can I just like pause and drop the mic for a second? Boutique owners, go into your segments and make sure your current customers are being taken care of. I can't emphasize that enough because it is so much more cost effective to get your current customers to buy more and to buy more often than constantly trying to attract new. So segment them and make them feel so important and special and seen on your list. Yeah. Yes.

So good. We do different emails for our people that have bought from us and people that haven't bought from us and we really talk to them very differently. Right. If they're on your email list because they grabbed a coupon code or something, but they've never bought from you before, we've got to convince them just to trust you to buy. But once somebody's been in, they purchase like they, they own that product, it's a different conversation to get them to rebuy. So really be thinking about how are you talking to them, who are you talking to? And, and know that it's probably a whole lot easier to get your current people to buy again than it is to get new people.

Oh, for sure. Absolutely for sure. What? I guess one other area where I feel like I see a lot of this spinning right now is just the overwhelm behind the scenes of the business owner. And to me, that's a whole nother, a whole nother thing to systematize. Talk to me about what your biggest advice is right now for the overwhelmed business owner and how to just like get back and reclaim your time and so that you can approach this out of playing offense and not defense.

Yeah. I just got off a call with somebody who was like, I'm working 12 hour days, six days a week. I'm so maxed out with clients. And she's like, so what should I do from here? Raise my price? And I was like, yes, but, but, but why are you not bringing on a team member? Right. Like you are maxed out at six days. This can 12 hour days. This cannot be your ideal lifestyle, Right? But so many times we don't think, let's bring on help, right? And I really, really want you looking at where, where is the need first and, and remember, revenue generator. So you might bring somebody on and you might be thinking of like, what role they play. But look at what will be the easiest role to increase your revenue so that, that can help you offset their payroll. Because people will say, I need help, but I'm scared to hire, I'm scared to bring on that payroll. I'm scared to have this consistent expense moving forward. But it'll be a whole lot less scary if you pick a position that can help you actually generate income. So I was working with somebody who does products, but she didn't have a brick and mortar store. She was really doing it out of her home still. And she only it was her. She was a solopreneur doing all of this. And she had all of. She was blowing up. I mean, her business was going crazy. She never reached out to past clients ever to place new orders, like, ever. And I said to her, what if you hired somebody to just email all of your past clients one on one to place another order? And she was like, I could make thousands of dollars, like this week. Yeah, like, there you go. That person's not an expense. This shouldn't be scary to hire them. You craft the email of what you wanted to say and have her send it out and her payroll's covered and she'll profit and make you money this month.

Yes, absolutely. Oh, my gosh. I feel like you're. You're preaching to the choir. I love this because that's something I talk about a lot too. If I just. If you, if you did simple math, right? If you invested, we'll say 10 bucks an hour, five hours a week. Okay, I spent $50. And now if I had five hours back on my plate, how much revenue could I generate in five hours? Unbelievable. That's so good. That's so helpful.

Most owners need to stay in the marketing role and get the doing off their plate, right? The marketing role, when done right, can produce so much income. So if you can stop packing the boxes or unboxing, putting clothes on shelves, like, you can't be doing that kind of stuff. That could be somebody at a little bit more than minimum wage in your area that will gladly do that while you focus on marketing, generating hundreds, thousands, et cetera. Not $15 an hour.

Yeah, absolutely. Okay, Stacy, talk to me. About the biggest opportunity you see right now going into the time that we're in. There's a lot of, you know, we've talked about buckling down. Right. But really, yeah, it's just like the stock market. When it goes low, that's when we buy.

Right?

Buy low, sell high. What is the greatest opportunity for small businesses in this pending recession that we're in?

Yeah, I think the biggest opportunity is knowing that some businesses are going to make it and others aren't. Right. Like, who knows the percentage of what will happen. But the more you can hold on and stick with this, the, the bigger the gains will be on the other end of it. Like, I remember what it was like in 2008. I was watching businesses shut down and close left and right because they were losing people. But as they were losing people, some were still left and they would come to us because we were still there.

Right.

So how can you be the last man standing and get that right? So I think just really knowing that you're committed, it doesn't matter what happens, how it happens. I mean, let's be honest, some of you might do really well in a, in a recession. Like, you don't know yet. If you haven't gone through it, you don't know this market. You don't know what a recession feels like after a pandemic. Like, I know what it felt like in 2008, but I don't know what it felt like coming right off of a two year pandemic that we've been in. Right. So I think just really being committed, finding that thought that's going to keep you going. Right. There's, there's massive opportunity for us. I guarantee you, you will see your competitors shutting down. You will reap the rewards of some of those people that will miss out on that opportunity. Unfortunately, it's sad. I'm not hoping competitors like fall off. It will happen. I just, I've seen it. I know that.

Yeah. I would also echo what you're saying in terms of big box stores. I think we're going to see a lot of struggle with big box stores. And I think that's a huge opportunity for small businesses going forward. Yeah. Yes.

Well, and another thing too is reaping the rewards of that happening. Right. So if a big box store closes in your area and they're selling all of their, like the clothing racks to hang things on or the shelving units or the front desk reception, like I remember when that happened and I'm like, I was going in there, we grabbed like office chairs and just things that they were selling for like rummage sale prices because they had to get rid of everything. So we had a, we had a local dance studio that shut down and she called us and said, I'm getting rid of all my leotards, all my shoes, all my. Do you want to come in and buy stuff? So I mean we were literally buying things that were affordable fraction of what they paid because they already called it quits and said we're done. So could you be buying and befriending them? Could you be befriending them and buying their email list? Buying their like whatever they have. What could you be doing? Some people were just going, I don't know what it's worth. They take the emails. Like you can just email them and let them know or I'll email them about you. I mean it was crazy what people were doing.

You know, that also goes for the labor pool. Like we just came off this page period of time where wages were soaring. Right. Like it was an insanely competitive job market and it still is, still is in a lot of the sense. But there's also a lot of companies laying people off or like you said, people going out of business. And so if you are looking to recruit talent to your team, this I think is going to be a huge opportunity for you. Absolutely.

Yeah. That's another great idea. Even saying to somebody, if you do connect with, with a competitor or somebody to like let them know, hey, we are looking for xyz because how bad would you feel if you had to lay every, like not late, you're firing everybody because you're closing up shop. If you had a really good person, you would want to send them someplace where they could find a job if somebody was hiring. Right. So I do think the opportunity for some really a like high level, a player type opportunity, people are going to be looking for great places to work. So we will definitely be able to benefit from that.

Absolutely. Stacy, this has been incredibly helpful today and I hope eye opening for a lot of people, but I hope most of all this has given so many of our listeners a sense of peace and knowing that they've got this, like this is not the fear, this is not the sky is falling. But if we can approach this systematically, we can absolutely make it through to the other side looking better than ever. Stacy, let us know where everyone who's listening today can, can follow you, get in touch with you and listen to your podcast as well as well.

Yeah, so my podcast is called Foot Traffic. I think I've been podcasting now for six years. We have like 600 episodes, millions of downloads. Like, definitely go check it out. There's going to be some good stuff there. And then the other place is Instagram. My handle is at stacytushel. I am on there daily. I really just, like, trust me, I will double down when things really start to hit the fan. I mean, during the pandemic, I think I was live streaming every day for 90 days just because I was trying to help as many businesses. I could get through it. We need to stick together during times like this because that's how we get through it.

Yeah. I absolutely love it. Stacy, thanks so much for your time today. This has been awesome and I look forward to working with you more soon. Thanks so much, Stacy.

Yes, thanks, Ashley. I appreciate it.

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Sam.