A framework for navigating recession: separate rational protocol (your core business adapted to new conditions) from panic-driven reactions like taking on debt. The speaker warns small-business owners against SBA loans as a survival tactic, arguing they create long-term damage. Instead, identify what you do well and shift it, like moving events online.
I want to start this video a little zoomed out so you can see my new favorite shirt, Mental Health Matters. And I'm wearing it— let me zoom in a little bit for us here— I'm wearing it because it's, it's representative of what we're going through. And I want to give you a little tool to navigate this. Now there's two circumstances going on. There's a health scare and concern, of course, but there's also the potential, pretty much proven out, recession trigger that's gone and we're going to go into a recession. So the question is, how do we navigate this? Well, the tool is this: are you complying with the course or are you complying with the concern? Let me unpack that for us. The course is what's the protocol to address the situation. So let's talk about the coronavirus. The course is social distancing, remove yourself from any gatherings, wash your hands. The concern is how we panic and we overreact. So perhaps the run on toilet paper is a demonstrative of our concern, where we overexert ourselves in a behavior that's of no benefit, and also disregard the Course. So people are rushing out and doing things porting materials or whatever, but are not doing the social distancing and not washing their hands. So we actually do something that can be totally contrary to the right course. So are you complying with the course? Are you complying with the concern? Well, this translates into our business too, and that's the field that's of most interest to me. I want to be of great service to small business owners, particularly in this time. The question is, are you complying with the course of the concern? Here's how I see it manifesting right now. I have people, entrepreneurs are emailing me saying, I think I should take on debt. I should grab an SBA loan. I should get more credit cards. So I have more line to more money. So I keep my business going. That is a concern response. It's an overreaction because listen, if business is changing and maybe you're afraid of your sales dropping and you want to sustain your business, adjusting your business is the right response. Just fueling more money into it won't do much because it'll just carry the business forward as it is today without addressing the adjustment it needs. And now you're taking on more and more burden of debt. So if we fast forward 3 months or 6 months or a year or two from now, you may have your business in such a position that's going to crush it. The course is to respond typically as in this approach, business as usual in unusual circumstances. What is your core competency that you deliver? That's the business as usual. Then how do we adjust the existing offering to cater to the unusual circumstances? You know, the easy and obvious thing is if you're an event-based business where you're meeting with people, how do we go to a, uh, video-based or conference-based, online conference-based system? So how do we start delivering our services or products in a way that addresses the unusual circumstances? That's where we need to make the investment. So I'm encouraging people, don't invest in debt, invest in determining a new method to serving your clients in a new way in these unusual circumstances. The test for you right now is just ask yourself, as you come up with ideas, as you respond to the circumstances around us, are you responding to the course, meaning this is in the best interest and the health of our organization and sustaining it, or are you responding to the concern, or you're making a very survival-based reactionary move, which can have long-term dire consequences. Hopefully that kind of mind positioning helps you a little bit. And I'm wishing you and all entrepreneurs tremendous success. You are the backbone of our economy. If the world needs anyone right now, it needs small business to be wildly successful. So stand up, step forward, and let's kick some ass.
