10 Businesses To Start BEFORE You Get Laid Off In 2024

Most businesses and humans struggle during recessions. So we went out to find 10 businesses that were recession resistant. And ideally, could we find some that could be tailored specifically to you? That's what we're talking about today. Bye, Felicia. Question is, are there recession resistant businesses that you can start in 2024 so you can win no matter what? If you're worried about what's coming and want to profit off of it, this video is for you, backed by a bunch of data you're going to want to see. It is a huge recession warning. Still have to be vigilant. We still have a recession around the corner. Once again, I think Main Street America may be a lot smarter than the economics profession to be fair. It looks like you are right to be worried about failures, recession and layoffs. Look at these numbers. Job openings, tanking, hires decreasing. My bet is layoffs are coming next. Layoffs are coming, Layoffs, layoffs, layoffs. And it looks like we're probably right. More than 240,000 people laid off year to date. Now I've been through terrible layoffs at my old corporate jobs. Goldman Sachs in particular. It was 2008, during the financial crisis. I was sitting in my cubicle watching people pick up everything they owned into cardboard boxes as 20% of the workforce was fired. People were crying, protestors were outside chanting Fuck the 1%. Then. It was awful. But I remember I sat outside one of the glass offices where they fired people. I overheard them firing one of the managing directors, one of the head guys. And he wasn't crying. In fact, he was pretty stoic. And they were going back and forth over a piece of paper on it. I'd find out later was his equity percentage that he'd get in the firm. They were explaining to him what his exit package would be. And he was getting paid to leave, not work. That pay included him owning part of the company after he left. And his name was Jim. And he was paid millions over the next few years. Here's the problem. Most people don't realize that they don't have equity in the companies that they're in. And they don't use the money that they make to get ownership in either stock market businesses, businesses they run, or recession resistant businesses. And we're going to fix that today because I don't want you to be one of those people with cardboard boxes packing out of a high rise like so many of my friends were in 2007, 8 and 9. I remember thinking about a lot of what businesses I could start to get out of my nine to five when I survived all the cuts at Goldman. And since then I've bought and sold dozens of businesses. We own a holding company that does nine figures called Contrarian Thinking Capital. But not every business is actually right for you right now. And so we came up with this matrix based on data and I want you to time at Goldman analyzing hundreds of businesses. This is called the money matrix and it talks about which businesses are tailored to you in 2024. It was something that I told myself to me back in 2008. So this is your plan to never be afraid of layoffs again. First, I'll kick us off with a quick business you can start for very little money that can use whatever skills you have creating a podcast, because I might be doing that now. I know that some of this seems like everybody's doing it and maybe there's not enough room. But you don't need to be Rogan to earn and crush a pod and you don't need his team. Just some simple tech is what I'm using. This one is called Riverside. It is the easiest way for me to record and edit high quality video calls anywhere in the world like this. Whether you've got business meetings, podcast episodes, or creating talking head videos, Riverside makes it stupid easy for you to produce high quality content that's ready to be marketed, no editing skills required. It also uses AI which is wild to cut your full recordings into clips. You can post quickly to socials, no editing needed to save hours work. It even analyzes your best moments to find what is most likely to go viral. And since I have a badass content team, they wrote this who want control over editing editing. Riverside makes it easier on them by recording everything into separate audio and video tracks. So you can use Riverside for podcast interviews, panel discussions, presentations, webinars, team meetings. But best of all, it makes it simple because I don't have time for complex. I got you guys a deal. If you want to try it for yourself, get the code and link in the description below. All right, here's how this breaks down. Our X axis is skill. Our Y axis is money. This gives us four quadrants up and to the left we've got low money, low skill. To the top right, we've got low money, high skill. The bottom left we've got high money, low skill. And on the bottom right, high money, high skill. So obviously low money means you don't have much money. Low skill means you don't have highly paid for or required skills. I can't tell you exactly what business is going to be right for you. But I can tell you that everyone falls into one of these four categories and then you pick one of the 10 businesses. And if you do this right, you can progress all the way to the fourth quadrant no matter where you start. So let's dive in to the first quadrant. Low money, low skill. This is where I would start if I was you. And it is called a service business. But a specific type of service business. A service business that can scale. We're going to break down exactly what that means. Four companies I like in service based businesses. Auto detailing, power washing, landscaping companies. All variations of cleaning companies. Here's what a service business is overall because definitions matter. Things where you are providing not a product to a person, but a service that is really just time traded in a particular segment that is not the user's time. I would start a service business for a few reasons. Low cost. They don't cost you much to start. You can have higher margins if you're actually running the business. There's a lower failure risk because you don't have much money up front. Or what's called capex capital expenditures. No shipping or supply chain nonsense that comes with E commerce. For instance, you can actually add a more sophisticated B2B option which means you can charge more. They're beginner friendly. That means they're easier to start. Finding clients is easier than most other businesses. And you can scale. For instance, you can start I would say more than 20 to 30 service businesses for less than 500 bucks. I have multiple friends that started an eight figure eventually cleaning business that cleaned windows for $500. What did they actually need to do their first job? They needed rags, they needed cleaning solution, they borrowed a ladder. They needed a truck that they also borrowed. They needed some window wipers and they needed somebody to say yes. Let's get specific on what are good margins. 30% at least. But you could have upwards of 80% if you're the owner and you run the business. The second reason this type of business is interesting is because of low failure risk. Your only cost is your labor. If you decide to scale up this business, you have low inventory, not a ton of big expenses and no shipping expectations. The risk of bankruptcy is actually quite small. You don't have shipping or supply chain. E commerce companies, for instance, are now my jam. 9 times out of 10 too expensive order values are high. You actually buy something before you can sell it. So you have to have a lot of guessing and make sure that you're right. The other thing is lots of oversaturation and competition with china. None of these problems exist. When you are mowing people's lawns, you do not have to proactively pay for it out of pocket. Now, B2B options are interesting because you can go and you can charge somebody 50 bucks to mow a standard lawn in Austin, Texas. Or. Or you can get a contract with a commercial building, and they could pay you $5,000 every month for you to mow the lawn two times a month. And guess what? Those contracts pay up front. You get money before you provide the service. The other thing is, these typically will not require you to be experts or licensed, which is great because I don't know about you, but I haven't gotten around to getting my journeyman's license. So unless you're doing something more complex, like plumbing or h vac, you do not need a license typically to do things like mow lawns or clean houses. Finding clients is much easier. Why? You live next to them, and most people need these types of services. If you see a neighbor cleaning their pool, there's a business. If you see a neighbor cleaning a pool and talking to another neighbor, there's your second customer. The other thing that's interesting about these businesses, they're scalable, they're not easy to scale, but they are much easier to scale than buying a bunch of inventory. You use initial profits to invest more in equipment, marketing, and more employees. What does scaling actually look like? You can make an odd 100 every now and then through service jobs, for sure, but that's you being an employee again, which is with an opportunity to get laid off. Or you could build it into a real business that functions without you and exceeds your current salary. That's what real scaling looks like. All right, so at this point, you go, well, how do you scale, Cody? I've never built a business. I don't know how to build one to a million 10 or $100 million. Let's use what I call the promise method. There's a lot of moving parts, but if I were to distill it down to seven steps, here's how I'd scale a service business. I'd start with p. Profit. One thing we want to do more than anything else Is we want to protect the margins. So this is kind of interesting because if you're going to scale, you, want to think about how you price things first. That means you'd go out, you'd look at what other people in the market price for landscaping services, let's say, and you'd Price it slightly higher than them. Why would you do this? You're brand new at it because you're probably not efficient and you want to keep 30% profit margins or higher. Good thing about service businesses, they suck at distribution, meaning getting sales. And you are going to be good at that because you're going to follow the promise method. So we're going to protect those 30% margins. By the way, margins are basically this. I charge a dollar for my service. It cost me 70 cents to fulfill my service. That 30 cents that's left is my margin. 30% margins, alright? The second thing we're going to do is we're going to add reoccurring revenue. That's the R. I have a motto called sell once, charge continuously. You're going to do long term contracts, which means monthly and annual contracts. You're going to have auto renewals with subscription services like Jobber or service Titan. You're going to also allow for pay as you go subscription. If they want to do add ons around the holidays, perhaps you do Christmas lights around this time of year. That could be a pay as you go subscription to add. Then you might add a loyalty program. The longer you stay with us, the more you continue to to use our subscription services, the more you get a little value. Very few service businesses ever do that, so you're gonna be unique. The last thing that I want you to do, I wanna make sure you obsess on the thing that no services businesses do. Online presence. What do you do when you need a handyman? You Google it. So I want you to obsess on how do I establish what's called local SEO authority. I wanna try to get people to come to my little website and say that I'm awesome. One of the best ways to do that. This is the thing I'm doing to you right now, which is creating content around my niche. Look at all these examples of landscaping content. Look at these examples of power washing content. This is going to be in my opinion the new type of SEO which is social media SEO. The M is mouth to mouth marketing strategies. Here we're talking about referrals. Most businesses get less than 10% of their current clients from referrals, which is crazy because when you like something, you are more likely to tell a friend to use the service. And so you already have somebody who's using your service continuously. Why wouldn't you ask them for more referrals? You're going to be unlike everybody else and you're going to have a strategy for referrals. That's going to look like this every single time you get a new customer. Because you're tiny and you're just starting, you're going to follow up immediately afterwards, ideally with a phone call. But you know, millennials, we don't like phones and we don't answer them. So it could be a text message. And the text message is going to be kind of cute. You're going to send something like this, hey, we loved mowing your lawn today. I hope that it turned out awesome. If you also like the service, could you do me a huge favor? I'm a brand new small, small business here in Austin. Your referral literally keeps my lights on. Would you mind telling me one or two other people we could reach out to? Is that possible? There's somebody else that you might know in this area or region that we can service and you're going to do that for every single customer. Now, most people are going to tell you no, but you're going to use the law of 12, which is basically for every single person that you ask out of 12, one will probably give you a referral. The I is interpersonal. This is how you get your first customers, by talking to your neighbors, getting personal. You start in your neighborhood and you use the concentric circle model, which is you start at your house and you look at if you were going to do a five minute series of laps around your house, can you go and knock on all those doors and ask for their business? Why would you want to do it in your neighborhood? Well, because one of the most important parts about keeping your margins tight on a service business is your ability to group and bundle your individuals. Now, when you're not the only one, eventually running this business, you're going to have a fleet of people out there that are going to be mowing lawns all around Austin. But in the beginning, it's just going to be you. And the more money you make is going to be directly correlated to how close the services you are providing are to one another. You're going to knock on your neighbor's door and you'll be like, hey, Tanner, I'm Cody. I actually live down the street. We run a landscaping business locally in this neighborhood. We actually do a bunch of the neighbors houses. We'd love to have you as a client. Would you be open to trying a local small business like mine? There's immediate trust transfer because you live down the street. The second thing you're going to do is you're going to open your phone, download your contacts. This is your very second lead list. And on this second lead list you're going to start texting people. Now let me tell you how much better it is to get text about landscaping than a fucking Tupperware party. This is not an MLM scheme. You're one of the few people who are offering a service people need every single day. I would love to give my business and landscaping to somebody that I know just happened to be somebody who knocked on my door. Now we get to something a little bit more technical. Sales subscription bundles. Specifically we are going to do what's called the threefold method. Look at this website. Every single good service business has a threefold sales tier. Basically cheap product and offering to the left, more expensive product and offering to the right and that Goldilocks perfectly warm offer in the middle. You're going to have a subscription offer in each one. But your middle pricing is going to be the one that you actually want them to choose. And more often than not, we humans choose the one in the middle. Just make sure you have a subscription offer. Most small businesses do not. E stands for expectations for customers. Well actually stands for reviews, but that didn't really fit into the acronym. Reviews are super critical. 93% of customers read reviews. 90% will not use your product if there's less than three and a half stars. 58% of consumers will pay more and travel further for a better reviewed company. Unhappy people are 10x more likely to leave a review and it can take 10 to 20x positive reviews to negate one negative review. Entire story here is you're going to obsess on reviews and if you want my exact process for how to get reviews, you can click this link. We've put it all together in one document for you. This is a super simplified version. If you want to see me apply this to a power washing business to grow it to $4.1 million in 10 minutes. This video is for you. So I've just showed you your first quadrant, how to take the promise method and apply it to any simple service business and how anyone can start this business even if you don't have much cash and you don't have many skills. This will not work for you if you're not willing to do any work. But it will work for almost anybody who is willing to put in the work. I especially wish that I had started something like this when I was young. Instead I was waiting tables and getting beer spilled on me. Or all for minimum wage and no equity. This is the money matrix that we've just Gone through money level needed. Basically zero skill level. I don't know. Don't be an idiot. Let's call it a 3 out of 10 risk level. 2 out of 10 reward first year on average, I think you could make somewhere between 10,000 to 100,000. Best case after several years, millions. Lots of examples of companies that do this. Time commitment, 8 out of 10 to take up a lot of time. At least until you make enough money to hire the person who's going to take over for you. Quadrant 2, where we're going now. You need a specialized skill that you can sell. Nice thing about skills, you can learn them even if you're broke. The Internet's a wonderful thing. You could also subscribe to our channel and you could learn a lot more of these skills. So maybe hit that button. If you already know everything about a high skill service, this quadrant is all about learning how to sell it. Or better yet, turn that service into a product. This is a goldmine, guys. Second quadrant. High skill, low money. There are three buckets for these types of businesses. Consultant, productized service, product as a service. Let's talk about the three types. Consultants. What are they? They're somebody who has a marketable skill that's in demand that you pay in order to steal their 10,000 hours. For instance, we have a consultant that taught us how to do YouTube. Shout out Jamie. We have a consultant that taught us how to do newsletters. That was Jordan. I had a consultant in Chile, Brazil, Colombia, Mexico for every single market I tried to enter when I was in first trust and building up our asset management business to him. If you want to scale fast, you use consultants and if you have money, you use consultants. If you don't have those things, you become one. Do you have a skill set that's valuable enough to be a consulting business? You probably have one if you have a job right now where they teach you to think and not just use your hands. If you have anything that is not a labor based business but a thinking business, you can likely be a consultant. And if you want to check, go to these three sites, go to upwork, glg, get Intro. When you look at those three sites, you can Google search exactly what you're good at. Graphic Design, accounting, sales, YouTube. Type in the thing that you think you're good at and see what the average hourly rate is for that. If nobody on there is searching for you, maybe you don't have sufficient skills. But if somebody on there is searching for you, you already have your price tag that's associated with consulting. If I was going to start a consulting business, I would start on one of these platforms. In fact, I did. I used GLG back in the day. I would probably also use Intro now. The platforms aren't ideal because they take a cut of your money and it takes time to apply for gigs. But it's a good first step. And then you can send your link without having to build out an entire website or having to build out an entire brand. You can just send that link to people that you want to start building. 1. The strategy that I would use to scale it is the exact same thing for a service based business. This is you building your lead list and your lead list is comprised of the people that you already know and perhaps the clients that you're already working with in your employee situation. Right now there's a problem with consulting and freelancing business. And that's there's only really two ways to realistically scale. Charge more, spend more time working. There's a ceiling there. So instead I would do this. A productized service. Let's use Design Joy as an example because it's brilliant. This is Brett. He decided he wanted to do more than his 9 to 5 design job. However, he didn't want to fight all the other consultants in design work. So what did he do? Instead of having to manage people send all of his profit to payroll, he decided he would create a design as a subscription. Think of it as Netflix. You pay a subscription fee, but instead of unlimited movies, you get to make unlimited graphic design requests. The keyword here is unlimited. Whether you make 5 requests a month or 50, the price stays the same, either 5 or 8k per month. Great caveat though. You can only make one request at a time. So unlimited really becomes limited to how fast they can get them done. We have a business called viralcuts. Uses a similar pricing model. Here's the three tiers. You could do this with just about any consulting business. Remember, promise exact same process here, but you're selling a productized service. Nothing changes from the P all the way to the E. A product as a service. Second example would be Justin Welsh, a friend of mine. Solopreneur business model. Gives away lots of free content on Socials, sells $150 courses plus gets some sponsors for newsletters and teaches people only this how to repurpose content across multiple platforms in a course method. All right, here's the breakdown. How much money do you need? Not much. Theoretically zero. Maybe some monthly subscriptions, up to 1000, 2000 bucks. Skill level, you need to have some skills. 8 out of 10 so you could spend your time just there. The risk, probably a 2 out of 10 because you're not going to spend a bunch of money up front. But if you're not good at marketing it, this is one where somebody's going to have to believe that your skills, your knowledge in your head is worth paying for. That is harder than showing somebody that you mowed their lawn. The reward though is realistically, if you take this seriously. This is a multimillion dollar business. But I think up front doing it on GLG and on a service like Intro. In the beginning I used to make first a thousand and then 5,000 bucks a month on the side. The time commitment here, way less than the first. The first one was 8 out of 10. I would say this one you're talking about more like a 6 out of 10 quadrant. 3. High money, low skill. For this I'm talking buy simple businesses. I'm going to tell you exactly what types I like. This is maybe if you have a good salary, but you're feeling stuck, you have some money set aside. But maybe you don't know very much about running a business. What can you do with that money? The first and foremost caveat is we buy businesses that cash flow. We don't buy dreams, we buy realities and profits. So please do me a favor and don't do yourself a huge disservice and buy a roofing company that's bleeding cash. Nobody needs that. We want you to buy a simple business with a business model you can already understand. Quick caveats. I want you to remember this acronym, brrt. It stands for buying of our business in a recession resistant sector. We're going to explain some data specifically on what those would be. Raise prices, add technology. Remember how we talked about your promise methodology before? Here we add promise and B rrt. How much do you need to buy a business? Well, you could do it for zero, but in reality, many deals are going to need a mix of your money, other people's money, plus some cash. So in my mind this really starts to make sense right around you having 25, 50, $100,000 at least that you're willing to put on the line for a business. There's tons of caveats on how to do this correctly or not. If you want more information, there's actually a free newsletter here that you can learn more on simple business. Number one, Laundromat. This is where I started. Average purchase price somewhere between 250,000 up to a million success rate they say 95%. Most likely a little bit lower. The most likely reason a laundromat would not succeed over time is you buy it too. Expensively simple business number two, self storage. Lots of the perks of real estate, but some simpler tenants. Very simple model. People have too much stuff in the US because we're hoarders. You put it in a room that's not at your house, you can do a value add capacity. Aka my friend Nick Huber talked about adding $150,000 facelift to one of his buildings. And how much that increased the total value. The success rate more like 90%. The average profit for a storage unit business owner is somewhere around $184,000 a year. Now lots of members of our community like these people have bought roofing companies, plumbing companies, electricians, cleanings. Well, pumps. Yep. Garage door company, shower door installation. So you could refer back to the first segment where we told you to start service companies and you could certainly buy one instead. But let's start really really simple because if you fail the first time, you'll stay an employee forever and you won't do another deal. Let's break down the money. I think you need six figures. Skill level 5 out of 10 risk, 7 out of 10. You can take steps to de risk your purchase, but ultimately you're putting a lot more money on the line buying a business. In this example, reward could be an 8 out of 10. Risk is higher, but your reward is more immediate too. Can't promise you you'll make a certain amount of money. Nobody can. But if you buy a business that's already making money, you have a higher likelihood of that continuing than if you start a business where most businesses go out of business 90% of the time and most startups never actually make any money. Time commitment. This is actually a little bit less. So could be anywhere from 5 to 10 ish with an operator. Could be less than 10 hours a week without an operator. You know, depends on which business. Laundromats, maybe 20 to 30 hours a week. Self storage business, probably the same thing. Full time empire of this type of business 24, 7 just like any other CEO. Okay, don't freak out YouTube. I'm going to do some public math. Class is in session. The average service business sold for 2.38x its profits last year. The median sale price was 290,000. Which means that that business probably had a cash flow of $121,000 if it sold for 290. Now your take home pay for Owning this business likely won't be near 121k and will depend on you having operators in the business. But I don't think that's too far off to say. You can make four to five figures a month from buying a good profitable business without having hundreds and hundreds of thousands of dollars. Because you could get an SBA loan for anywhere from 10 to 50% of the purchase price. And you could also use seller financing. If you don't know us about seller financing, subscribe to this channel. We talk about it all the time. Last one. High money, high skill business, SaaS business. Why now? Well, I myself just bought a SaaS business. We own a few and we're scaling. The reason why is, you know what all these companies have in common? All these logos you see on here. All of these companies were started during a recession and these are now unicorns. There's a common belief in venture capital that more unicorns are created during downturns and upturns. I don't know says 95 US companies were valued at more than a billion and were founded during recession, but 757 were not so mixed bag. The good news for you though is I think we are in a teeter totter. We've had boring companies like I talk about doing well, hiring and bootstrapped companies, totally fine. But then over here on the right, we've got VC money drying up, downward pressure, huge tech layoffs. And when that happens, you can see from let's say, you know, the first part of this year to 2019, we've basically lost $182 million in funding during that period. And that's important because it's expensive to start a SaaS company. So you could start a micro SaaS company, they say for around 15k. I still think that's hard. And you could start an MVP of a complex SaaS company for about 150,000. But the truth of the matter is if you want to scale a big business in SaaS, it's going to take millions of dollars. Like the average high growth SaaS company raises $9.5 million by Series A. That's like the first real time they go out and say, give me your money. VCs for Slack. For instance, if you wanted to go recreate Slack today, they say you could create an MVP that's similar to slack for 100k. The problem with that is Slack's already been created. So that really wouldn't get you very much. You'd need to come up with something totally new. The Cool part about this is how much can you make? While the average sales price for a SaaS company is $1.65 million, you also have an average multiple that's quite a lot higher. 3.6. And this is for the lower end of the spectrum. Often this is 5 or 10x. And this multiple is on revenue, not profit. How much time is this going to take for you? Well, I think it's about like this. Can't tell if you're homeless or just a tech entrepreneur. The time is going to be all of your time. If you think, well, I don't want a 9 to 5 job but I'd like to work 24, 7 SaaS is for you. And the one thing that SaaS entrepreneurs never really think of in my opinion is that they like to raise money, they like to build things, and then they're a little bit like Ryan Gosling here, not saying hi to the actual customers they need to onboard. So remember back in Promise where we told you sales is everything. Same with SaaS companies, one way or the other. Skill segment. Take a screenshot. It's a lot. If you want to be a founder in general, you need to learn all of these skills. But if you want to be a tech founder, you've got to also learn the language of technology, something like what these programming skills are. You don't actually have to be a programmer. I'm not and I own some tech companies. But you do have to be able to speak the language that they use to build it. So let's do a little recap here. Money level, a lot of it, Probably a couple hundred thousand dollars to a couple million over the life of it. Skill level high 9 out of 10. I think the highest skilled entrepreneurs typically play in tech risk. 8 out of 10 because it's going to be expensive to buy one and you can't buy one profitably. So you're going to have to build one yourself. Reward really high. If you do this well in SaaS, this is a 10 out of 10 and then the time commitment is all of your time. I don't know, somewhere between eight and 10, 10 businesses, four different types. But I want you to think about this for a second. In my mind this might be one of the scariest times to be an employee since 2008. And I should know because I was sitting next to all the cardboard boxes at Goldman Sachs. Interest rates at 22 year highs. Wars across the world still recovering from crazy inflation. Americans outlook on the economy is getting worse by the month. And although inflation is kind of improving what's happening in the labor market like we talked about. I think what you're going to start seeing is acceleration of all the things that go bump in the night. Economic downturns like this make a lot of people poor. But if you position yourself right, this could also be one of the chances you have to make the kind of money that most people could only dream about. One of my favorite quotes is from Baron Rothschild, and he says, buy when there's blood on the streets, even if the blood is your own. And maybe especially then, there's an old saying in investing that market downturns steal from the unprepared and give to the prepared. So be prepared. Hit the subscribe button.