Tips to Recession-Proof Your Business Strategy

Yeah, I mean, I think when it comes to diversifying your revenue streams, it can be tempting to say, let's go and launch a bunch of different products to new audiences, but you got to understand you're introducing some pretty significant unknowns and it might work and it might not. So if you're going to look to diversify your revenue streams, which I do believe is a good idea, asking yourself, how can we sell more to the people we're already serving is where I would start. And so that is now, again, if you figure people have less that, you know, you may reach the bottom of that. Well, but that is definitely where, you know, where I would start. And I know for us, we, we pivoted from frankly selling things that might have been more of a group type activity to more of a one on one service based thing because people want results now. They want it sooner rather than later. We've, we've shifted from trying to do everything ourselves to saying, let's, you know, enter into and engage in more affiliate type opportunities so that we can sell somebody else's thing without having to create it. So I would just say start with the people you're already serving. If you go out there and say, get panicky and try to launch something totally new to a totally new market, it better work. If it doesn't, you could be way worse off than when you began.

Hey, everybody.

Welcome to another episode of Business Lunch.

I am one of your hosts, Roland Frazier, and my cohort, co host, counterpart and business partner, Ryan Dice is your other host. Ryan, how you doing today?

I'm doing very well. Your cohort, counterpart, Everything cohort. You can do that? All the things? Yeah, yeah.

All, all the, all the Cs. Cohort, cohort.

I feel like, I feel like I got a promotion. I guess that's what I'm saying. I'm very excited about it. No, I'm doing great. How are you?

I'm doing great. Doing great. Except I will tell you, I have seen across our portfolio of businesses and pretty much everybody I talk to says business is down. And have you heard that out in the world as well?

Yeah, yeah. I mean, talking to clients, portfolio companies, everybody seems, or if it is up, it's taking, it's requiring like a herculean effort of the doing. They're doing some really new, you know, new things. But it's, it's not one of those deals where, oh, we just got to show up this year and just by nature of being here, we were 10, 20% higher. Like it's now requiring 20, 21, and.

22, and maybe even 23 was right. I mean, it was just kind of up and to the right. It was, like, panicky there at the beginning of 20. But then it just kind of went crazy good across all of the different things. Even the physical businesses that were having trouble, like, adapted and everything, probably because there was a lot of money being thrown into the. Into the world. And interest rates were. You know, money was free to borrow, and it was also free to get for free, to not have to pay back.

And it was forced innovation. Everybody. And everybody was seeing what everybody else was doing. And so, yeah, I think. I think we look back on 2020, obviously being a really difficult year. But 2021, 2022, and to your point, 2023, I think most of us, a lot of us kind of started to sense a slowdown, but in 2023, consumer sentiment always lags reality. And so they were still fully lagging. And I think where we are right now is, you know, it's funny, things I believe are improving. I think there's a lot of uncertainty around the election. And, you know, you got seasonal slowdowns, which we talked about in previous episodes, in a lot of businesses in the summer. But. But yeah, I mean, it's a grind right now across the board.

I don't.

I don't really know anybody who's saying, like, oh, yeah, no, it's, psk. Crushing it.

So if you're experiencing this, you are not alone. The question is, what can we do about it? And just to kind of help you guys, we did a little bit of research, and the things that indicate recessions are all pointing that way right now. We have been kind of amazed at how long it took for this to happen because it was just like, you know, these are like, when this happens, this happens. But none of that was going on. It's like all the bad things are happening. Housing prices are going up and, you know, and inflation and interest rates and all of these things are happening. And yet sales were continuing to break records every single month. And that just. We were like, how, you know, can't.

When is the shoe gonna drop?

Yeah, much. Much like the. Much like the. The prime loan situation back in the. In the day. And also the crypto world. Right. It can't possibly. No, the new reality is always profit. But. But sadly, that's not true. But here's the deal. A few things. The US treasury yield curve is inverted and has been for some time, so they say that is a historically predictable predictor. Excuse me. Reliable predictor of inflation. GDP is down, gross domestic product, inflation is high, as we all know and experience. Monetary policy is tightened because they've increased these interest rates trying to tame inflation. And we have all kinds of geopolitical risks, including supply chain disruptions, the Ukraine, Russia, military, Operation Slash, War, depending on where you live, what you can say, and, and so on and so forth. And so the World bank, the International Monetary Fund, most of the major economists and business leaders are all saying, hey, it's finally here. And so the question is, what can you do to prepare, assuming that it hasn't really hit for you? Because it's very likely that it will get a lot worse. Let's all hope that it's not. I'm very optimistic in life and so I'm going to hope for the best, but I think planning for less than optimal is a good way to go. And so I'm going to run through a couple things and, and then just kind of bounce back and forth with Ryan on these. But some of the proactive steps that businesses can take to prepare one is build cash reserves. The historical ideal is somewhere between three and six months of operating expenses. You and I talked about it, I think on the last episode that we like the idea of one wallet. You say it. Yeah, it was the 1, 2, 3 method, I think, was what we came up with.

You came up with a cool name for it. I had not thought about that, but yeah, I mean, it's basically you want one month operating in your operating account and then probably two to three months in actual savings was kind of where we landed.

I like it. So building cash reserves, that's something that, if you haven't done, definitely do that. Because I can tell you from our own experience, having having cash reserves allowed us to get out just to retire our credit facility, for example, that was not, you know, and that, that, that allowed us to save interest. And also this ridiculous cycle that it was credit, but it wasn't really credit when they finally got around to saying, we actually just want you to take the full amount of the credit line and have that in our bank, and then we will lend your money back to you at an interest rate that we're totally secured on. And I was thinking, man, you know what, Ryan? If we could get into that business.

That'S loan people their own money back to them at interest.

The second one is diversify your revenue stream. So don't rely on a single product or market. And that's an important thing to think about. Thinking about. What are the new Opportunities. And I think it's important because the new opportunities are likely. Like you've got your core thing, but there's always somebody chasing you. There's always somebody that wants your business, that's innovating better than you are, faster than you are, that's exploring new markets, that's thinking about how can I eat away at what you've got. And so I think it makes sense to always be vigilant and assume that somebody's coming for you because they are. So diversifying your revenue streams makes sense for that. How have we done that in some of our portfolio companies? Ryan, you want to share a little bit of that?

I think it's important people might think about. Yeah, I mean, I, I think when it comes to diversifying your revenue streams, it, it can be tempting to say let's go and launch a bunch of different products to new audiences, but you got to understand you're introducing some pretty significant unknowns and it might work and it might not. So if you're going to look to diversify your revenue stream, which I do believe is a good idea, asking yourself how can we sell more to the people we're already serving is where I would start. And so that is now again, if you figure people have less that you know, you may reach the bottom of that. Well, but that is definitely where, you know where I would start. And I know for us, we, we pivoted from frankly selling things that might have been more of a group type activity to more of a one on one service based thing because people want results now, they want it sooner rather than later. We've shifted from trying to do everything ourselves to saying let's enter into and engage in more affiliate type opportunities so that we can sell somebody else's thing without having to create it. So I would just say start with the people you're already serving. If you go out there and say get panicky and try to launch something totally new to a totally new market, it better work. If it doesn't, you could be way worse off than when you began.

Yeah. And one thing that we did in one of our businesses was that you, you were talking to one of the sales directors about, was that we had too many products coming out and that was, they were all related to, they were all related and they sold well actually too, to the audience that we had. So it was very difficult to stop doing it because you want to serve your audience. And if you've got a good long string of products in the hopper, it's very nice to get Them out there and see the revenue. But in terms of an actual sales force being able to deal with that, that was becoming kind of confusing for them. So that's a risk too, right?

Yeah, yeah. Complicate your sales process, it just, it slows everything down.

Another one is reducing your debt, lowering your interest payments and freeing up your cash flow for other needs. It's a tough time to think about reducing debt. But I will tell you the thing that I mentioned about retiring our credit facility. It was the right move because it really wasn't serving us and we were, you know, we were losing that money and we weren't really because it was in a savings account and at the time savings was, you know, it was paying what, less than 1% interest? Yeah. So it didn't really make sense. And what was, weren't we at like 8% or something like that on that money?

It was bad. Yeah, yeah, I think it was six point something. But yeah, it was bad. It was, it was bad for as low as interest rates were at the.

Time and that would only be worse now. So if like, if you've got cash that you've got, this would be a kind of a thing to think about. If you've got cash reserves in excess of three months, I would definitely look at taking that extra three or more months cash reserve you've got and pay down debt to free up the interest rate and lose your dependency on that. I would try to keep, ideally if you've got a credit facility, keep the untapped portion of it available so you have that to access as well. But it would be, I think, a good fiscally responsible decision to say I'm going to shift some of my cash reserve that's low interest earning over to reduce debt that's obligatory and high and high interest cost and still have a sneeze, excuse me. And still have an adequate reserve to cover know the 1, 2, 3 that we talked about.

It also shows, yeah, it also shows that you're servicing that debt, which is really, really important because now is the time when people need the debt the most. They accumulate a lot of debt. It winds up looking a little bit scary on some of these lenders balance sheets. And so they look for people where they go, okay, where, where can we go? And reduce our debt obligations. So they will take lines of credit, they will take credit limits and they will take them all the way down to what you currently owe. I remember this happened to me back in the last financial crisis. I had a $250,000, you know, line of credit. I only had $68,000 out on it. And so they reduced my line of credit to, wait for it, $68,000. Now, I hadn't serviced any of that debt. I wasn't used, I wasn't utilizing it. I wasn't taking more out. I wasn't making payments, you know, to try to bring it down. And so from their perspective, they just saw it as a whole lot of like, whoa, this person isn't making any payments on. And I wasn't required to be on the minimums. But because I wasn't servicing the debt, because I wasn't utilizing it, I only looked like risk in their eyes. So I think, you know, to your point, it's worth showing that you're somebody who is beginning to pay off some of that debt. So they see you as a good, good creditor.

I like it. Reassessing expenses, cut any unnecessary costs and prioritize your essential spending. I think that's something we talk about in the Get Stops now program, or, excuse me, this Stops now program in scalable. You want to share a little bit about kind of how we go about doing that?

Yeah, I mean, so Richard, our president of a number of our companies, and we roll this out, encourage all of our clients and all of our portfolio company CEOs, at least once a quarter, send an email to anybody who's got credit cards, anybody who's got the ability to spend. The subject line is, this stops now. I promise you, you send that subject line, it's going to get about 100% open rate to your internal team and say, hey, expenses have gone up. Things, you know, things are getting a little bit out of hand. And so what we're going to be doing is, you know, we're going to be printing out the credit card statements and expense reports for the last 90 days. We're going to sort them based on what was the most expensive. Want you to run through your particular expense report, any credit cards that individuals have. And I want you to color code green if it's absolutely essential, yellow if you want to question it if we have something to discuss, and red if it can be killed. Let's see how much we can save. Every time we do that, we save tens of thousands of dollars a month.

Yeah. And I think in terms of the reprioritizing expenses is a good thing to think about too, because, um, the next one on the list, number five, is strengthen your customer relationships and focus on customer retention and loyalty. The customers that you've got, especially the recurring revenue customers you've got or the renewing customers that you've got or those who could renew or buy more, those are so much more likely to buy from you than cold traffic. So I would suggest take a look at what we talked about last episode, which was, which was the slow sales method where Ryan ran an experiment and they were basically able to have it. Was it improved conversions at half the cost or same at half the cost? I forget.

Double conversions at half the cost.

Okay, so the double half. Yeah, the, that doubling of conversions at half the media spend freed up money to either spend on more of that or maybe the half that they saved could actually go towards how do I re engage and create retention and stickiness with the people who are already customers who already love us and God forbid who are already paying because those are so, so, so silly to lose and typically what it takes to keep them is just a little love. So like you could, you could reallocate time even of some of your people over there. That's a reallocation of an expense on labor. Or you could reallocate ad spend on cold traffic to existing traffic or even towards maybe getting new affiliates which are centers of influence that can send more than, you know, single customers at a time. But I think going through that exercise can be really, really helpful. And then reviewing supply chains. So what are the vulnerabilities that you've got right now and can you diversify your suppliers? And we talk about this in scalable when we talk about what are the 63 things you can do to increase the profits of the company. Reducing expenses is one. And one of the ways that you can reduce expenses is go to your suppliers and renegotiate. And so if you haven't done that, that's something that would be good to think about maybe getting going through an rfp, a request for proposals among the potential suppliers that could supply, including the suppliers that you've got. And again, I like the idea of printing out on the from the income statement by account for suppliers from most expensive to least, most spend to least. And I mean you can very often find significant savings there. And even if you can't get them, get things at lower cost, the ability to get credit can help you too because that's a one time benefit for however many months of credit you're allowed there. So a couple of things to think about there. Investing in technology, automating processes, improving efficiency and reducing labor costs. I just read an article this morning in the venture capital world that AI which obviously the VCs have been investing heavily in companies that are AI is also now creeping into their infrastructure and that typically on the administrative side, from outreach, research and administration, they need 50% less or 50% fewer people. And so the cost of labor has gone down by about 50% by substituting in AI. So think about how can, how can I use AI? How am I using it right now? But is it possible to use that to automate and make more efficient things that I've got that I'm spending on right now? And not necessarily that you even have to terminate the people that you've got. You could basically get the benefit of that efficiency by then reallocating their time to something like keeping your existing customers happy. Right. So I think, think about how do I shift all of this is malleable. How do I shift it around to get it in the most optimized way? And I think, you know, I think bringing AI in as probably the biggest opportunity for technology to benefit your businesses is a kind of an easy one. Any, Any other thoughts on that?

Certainly CRMs.

If you're not, if you're not, if you don't have one of those now.

Right? Yeah, I just, I think there were a lot of quality of life investments that were made during the last boom cycle. And that quality of life could have been, I'm going to hire this person just to do this thing because I don't want to have to do it anymore. I'm going to invest in this software because, you know, we'll use it from time to time. A lot of those quality of life things now, looking back, you realize we don't actually need it. It didn't improve the quality of life, you know, that much and a lot. It could also be offset or completely replaced by AI. And so I love what you said. Maybe you don't necessarily cut those expenses completely. Maybe you reallocate them to where, oh, look, now we just found an extra 5, $6,000 a month that we can throw towards acquisition. We just found an extra five to six thousand dollars a month that we can throw towards retention, towards an extra account management, customer, client, success manager, somebody just go and love on our people. Like, you know, I think it's not always about cutting. I love that you're continually emphasizing reinvestment.

Yeah. And the other thing to that end would be upskilling employees would be number eight. So how can I get the employees that I've got to be better to be more valuable to the company? A lot of that is how can I support them by educating them and AI would be a great example. If they're not using that right now, how can you help them understand how to use it? Maybe they don't have time because they work 9 to 5 for whatever paycheck they get, then they go home and then they're not doing anything there. They're not willing to invest in themselves. Many people, most people aren't. So can you, within the context of the time that you have them, that you're paying them, help them to upskill as well? I think that's a really good investment. That's something we provide like through digital marketer. Maybe you send them through digital marketer courses on how to be better marketers. Maybe the person that was an admin who now you can replace with AI goes through some digital marketer courses and learns how to do SEO and then becomes somebody that helps create. You know that using AI, right? There's lots and lots of things you can do. But I think it's just thinking and brainstorming how can I make my people more effective. And as a rule of thumb, we usually like in an ideal world for labor to be, for payroll to be no more than 20% of total sales, right? So that means that we typically would like each employee, think about that. If it's 20%, we would ideally like each employee to be generating five times what we're paying them. So how do I make my employees more valuable to the company? Now that could mean in terms of cost savings, you know, because there are maybe the receptionist cannot make five times his or her salary, right, because they're answering the phones, but maybe they can because they get more efficient. And how do you allocate that? You know that, that those are all challenges. But if you are thinking this way, then you're thinking I need to always be making my employees more valuable so that they can help us achieve this target that we've got as to what's the ratio of payroll to sales. And one of the best ways you can do that is to always be upskilling them. And if you're upskilling them, you're also building a bench potentially of cross trained people that can then ascend up through the organization when somebody goes away and you get somebody that is already trained and familiar with everything and saves you the average, I think 20 to 40 thousand dollar cost of bringing a new employee on just in terms of lost productivity and education and getting up to speed. So I think upskilling is a really.

Often overlooked area and not just to add something to that. It's not Necessarily upskilling, but something that everybody can do that's free is simply to raise your standards. I think another consequence of the last boom cycle that we had is business owners were so terrified that, oh my, people are going to leave, they're going to quit. And so we frankly coddled a lot of our employees. And I think now is the time to reset a lot of those expectations and say, hey, look, times are tougher. Okay, so we need everybody to be a little bit more efficient, a little bit more effective. You know, I know in the past you used to deliver X, I now need you to deliver Y. Let's talk about how we can collaborate on making that happen. So I don't think it's fair just to say, you know, do better and not support them in it, but say, you know, hey, how can. What. What would need to be true that isn't true today for your output to be, you know, Y instead of the X that it was before? So just raising the standards and having those conversations, I think is big. And usually it's free.

Yeah.

And.

And just to go back to the example I gave of a receptionist. So let's say that you're trying to figure out, how do I measure that? Well, maybe it's in terms of labor. How many calls or. Yeah. How many calls or interactions is the receptionist currently handling? And if you scale the business, at what point would you need to hire the second receptionist? And what does that second receptionist cost? And let's say it's 40k a year. Okay, well, now if that first receptionist could become twice as productive, then, because they have skills on how to use AI and phone automation, etc. To be better at their jobs. And now you don't have to hire that second person. Well, that's a pretty direct doubling of the efficiency of that person. So that's. That's another way to run that analysis if you want to.

The other.

We talked a little bit about explore new markets. Look for growth opportunities in new markets and new segments. Do you have a process of how you look at that when you're doing it?

I either want to sell something to my. My first question is how do we sell more to the audience that we already have? Because one, you already have them, therefore any additional sales are going to be at the highest possible margin, you know, no. No new acquisition cost there. So that's always where I want to start. If I need to go beyond that market, I want to ask, how do I take what I already have and sell it into a new market? What I really want to avoid is selling something totally new to a totally new market, because that's called a totally new business. So how do I sell the thing that I already have into a new market? And usually the best way to do that is to align yourself with some type of strategic partner, center of influence, somebody who not only is going to give you access to the market that you don't necessarily have, but they're going to be able to explain to you how to nuance your offering and your message or your messaging to make it better fit with that market.

I like it. And then the last one in that section would be contingency planning. And this is something that, that I spend a fair amount of time doing, which is here's what I'm anticipating to happen, particularly in terms of budget. What do I expect revenue to be, what do I expect expenses to be? What is the timing of those things? And I'll break it down by day. So I know generally what I'm expecting to happen over the next 30 days, but I go out typically to the end of the year. So what am I expecting to happen in terms of when will things be coming in? And if you're doing promotions or you have average daily sales, that's, that's an easy way to kind of schedule that out. And then what expenses do I have? And a lot of expenses are timing, controllable. So if I know that cash is going to be weak here, then why would I, why would I not be thinking about it enough to say, well, let's not have this big renewal of this contract happen here? Maybe there's a renewal of a contract and it's 100k contract, it's going to cost me, but it's happening in the weakest part of the middle of the month, in the slowest month of the year, which let's say is August for me. Right. Okay, well, I'm going to reach out before that renewal happens and I'm going to negotiate. How can we postpone that? How can we turn that into payments? Right. That, that contingency planning is important. And then what if the promotion that we're planning on running two weeks from now, or what if the challenge or the webinar or whatever star performing asset we've got didn't perform or performed at half what it used to? What if that's the effect that that suddenly hits? How would we deal with that? If you're thinking about that in advance, you're going to be a lot smarter and more intentional and strategic in how you're structuring your costs versus your revenue. So I think that's a, a really helpful thing too. Any thoughts on that?

I think now's, now's when you need to know your numbers more than ever. You just, you don't have the safety net that, that you might have had before. And so, yeah, know your numbers.

Okay. And I, I'll run through just some opportunities because recession is not just all bad, it does create opportunities. One of my favorites, of course, is acquisitions. Weaker companies out there, weaker competitors, weaker suppliers give you the chance to acquire media or infrastructure or additional products or services or intellectual property or recurring revenue assets or supply and distribution chain or competitors. All of those typically opportunities for acquisition become better in times of recession. So if you can stay strong, if you can use some of the strategies we've said so that you're strong and a lot of other folks are not planning that way and that creates a tremendous opportunity for you just to acquire them and by acquiring them, grow them and maybe even have a bigger audiences that you've got that will allow you to now sell more of your stuff because you're able to monetize more efficiently. I think that's a really cool way to do it. And that can be very innovative too. I read another thing this morning where venture firms are acquiring, acquiring past catalogs. They used to do this, where they still do this quite a bit with music, but with music catalogs. But they'll buy back catalogs of YouTube videos from AD monetized channels. Not the channel itself, just the revenue from the back catalog. So they'll own all of the IP that a creator has created. The creator gets a payday upfront, but it's not that much given what the acquiring company can do to monetize the revenues from the ads. And so not only that, but there's other things that they'll be able to do in terms of lead directions and stuff. So I think I thought that was kind of an interesting, an interesting way to go about it. Another type of acquisition that's not a asset or, and by the way, those, if you, if you have not already followed the epic challenge, if you go to get epic challenge and you want to learn how to do those acquisitions with little or no money out of pocket. We teach that, I have a book on it and all kinds of other stuff. The next thing would be acquiring talent, though. We talked about how can you make the talent that you've got more efficient, but if you can't make them more efficient or if you have talent deficits A great time to acquire talent is when all of your competitors are letting people go or unable to support people and pay them at the level that the people would like to be paid at. So don't forget that. That's, that's a big opportunity. Any thoughts like or experiences directly that you've got with doing the talent thing?

Ryan, when we put out a job post, we get more and better people than we have over the last few years. So yeah, I do think that now while it goes back to the classic zig when they zag, everybody else is laying off. That means it's a good time to uplevel and it kind of goes back to what we said before in terms of raising your standards to stack, rank your different team members and say to the folks that just aren't quite performing, got to go. I mean we, you know, had had a salesperson on one of our companies that I really genuinely liked and we've been working with them for a good amount of time. Amazing culture fit, great person, really, really, really liked them. But they just were continually underperforming and lagging behind everybody else. So in this market, in this climate, we can't afford to keep them when we know that we can turn around and just get far better people. Better, you know what I mean? Not from a human perspective, but better fit people at the same or in some cases lower because terms also improved. I love what you said about acquisitions. You've been talking about little or no money out of pocket acquisitions for years and years and years now. Arguably it's easier to do those deals now than it was when you were first talking about it and everybody was like, oh, I want to do it right now is when it actually is even easier than it was back in 2020, 2021 when you were first really beginning to share a lot of these strategies.

So agree, agree 100%. Another one would be focusing on value. So if you think about during the great recession, McDonald's introduced dollar the dollar menu. So like, is there a, a value thing that you can offer that could be an entryway into other things? Because maybe you introduce something that is a core thing that everybody, that's like the most, the most bought thing, the most wanted thing that your customers have, but you make it more valuable to them because it is less expensive. But you know that x percent of those people ascend into very high value things. So you, you'll have fewer conversions because you'll have less people with money to do it, but you'll have more people that are in the pool of people who can convert up. And so that's a balance to run. We had kind of a. I think it was a win and a loss at the same time. Right when the pandemic started at Digital Marketer, we opened up everything for free, which maybe wasn't the best way. Maybe we should have charged 10 bucks for it or like something really low so we had actual people that would spend money. But overall, will you tell that story real quick?

Yeah. When the pandemic first happened, we were like, okay, people are kind of freaking out. Nobody was buying anything anyway. So we're like, let's just give everybody free access to Digital Marketer Lab, which was our kind of, you know, one of our core offerings. Not our highest ticket, but certainly one of the. One of the core offerings. And yeah, so we opened it up and added many, many, many, many thousands and thousands and thousands of new members. I forget, I forget the actual numbers. And a lot of those folks did stick around. And so it was a net gain from a revenue perspective. The mistake that we made was twofold. You're right. Number one, we should have charged something so that we could have at least got them into a billing cycle and made sure because there was a lot of fraud. It wound up on like some, you know, freebie type sites. And, and what that wound up doing, which is something that we didn't anticipate, is it messed up our custom audiences in. Because now, I mean, we were building a lot of our custom audiences based on, you know, who made it to the account registration page, like, oh, create lookalike audiences around all of our members. We want more members like this. Well, a lot of these folks were, you know, no disrespect to, you know, people in like, India and Pakistan, but like most of those folks, you know, historically, while I love our, you know, Indian and Bangladeshi members, they don't make up the vast majority of the folks who join and stay for a very long time at $95 a month. But because that's what we were telling Meta and Google we wanted more of because they were the biggest influx that we had. It mega threw off all of our custom audiences for about six months. So that's done.

Yeah, so do it. But learn a little bit from some of the things we learn. One of the things too that all the studies say is that the first thing that usually is cut as things get tighter is marketing budget. And it's the worst thing to cut. And historically, through multiple recessions, all of the companies that increase spend during difficult Times come out significantly better than those that don't. Mostly because that market share, that share of voice for them increases because of the increased spend while the share of voice for the other companies goes down. More people are thinking top of mind about your company, more people get exposed to it. Ultimately there's a long term tail benefit to that in addition to the short term conversions. And as long as you get efficient using some of the other strategy we've shared in the past and you can, you can do that effectively. Introducing subscription models like Netflix and Spotify. They really thrived during the 2007 8, 9 recession and during the pandemic through subscription models. Subscription models really came into their own. You had Hulu and you know, everybody offering subscriptions. Apple, you know, blew up and now they're all consolidating because times are tough and. But is there a subscription model that you can put together that people will perceive as a value that will create recurring revenue for you? I know we went through that transition and had a fairly good lesson in cash flow timing as a result of that. You want to share that with folks?

Yeah. I mean, again, this is another digital marketer example. Back in the day, digital marketer go back to 2014 was very launch driven. So it would have a number of new products that it would release every, every year, you know, three to four per year. They were sold during a launch model. We'd bring in a new cohort, close the cohort, similar with a lot of other training type type businesses, and decided, you know, this is exhausting, this is painful, let's just package everything up into one member's area to rule them all. And it wound up taking off and doing very, very well and being a far more valuable business. But that first month that you go from doing a half a million million, $2 million in sales to $220,000 in sales because you brought everybody in on a lower ticket offer. That definitely stung and we did not plan for that from a cash flow perspective. We also made a massive shift with the company as a whole as opposed to introducing it as a new product and kind of pivoting over to it more slowly. So I do believe that now is absolutely a great time to introduce better terms, subscription based terms that have all pay in full. I know we're seeing way more of our members and clients taking subscription based model, installment based model as opposed to pay in full than we were two years ago. It's great. You just got to make sure you're planning for it from a cash flow perspective. The Money will show up. Just can you cover the float?

Right. And then the last one there that I would say to think about is. And even this morning I actually fired off a text about this. But collaborations and partnerships. So if you haven't been focusing on that and you've got any downtime that any of your employees who have any kind of social skills and charisma, maybe you can redivert them to seeking out strategic partnerships and affiliate opportunities so that you can tap into other people's audiences to sell more of your things. And that is typically done in no cost out of pocket to you. So only based on performance or CPA cost per action basis. So you're only paying money out with guaranteed profitability. And so that can be a really good thing to think about focusing on or redirecting towards in a, in a recession. Now I had about 20 or 30 strategies for cash creation, but given how long we've gone here, I think we probably should stop here and let's do either a part two or a separate one on cash creation strategies that we can record next time. Does that sound good to you? Because I think we go another half hour plus if we, if we didn't.

Yeah, no.

Agree.

Next episode. We got it.

Okay, awesome. Then if you guys enjoy, hopefully you enjoyed that. I think it is here and business is more challenging and the same or less than it was, you know, growth wise over the last few years. If we're looking for ways to sustain, recover or accelerate our revenues and our profits during this time when all of the powers that be, all of the leading indicators are showing, things are going to get tougher. Here's hopefully some really good action steps and plans and strategies for you guys to use and implement. I hope you'll, I hope you'll take them to heart. If you've got any that have worked really well for you or lessons learned, please share them with us. On social we really love hearing from you and very often we can talk about the things that you shared with us during future episodes and, and then we'll cover some quick paths to cash that any company can do to accelerate cash in times when you're trying to like, I just need to get, you know, get that made up or I need to, I've planned before on this thing that I've committed to expense wise, which has definitely happened to me during this time. And now the revenue that I was counting on to do that isn't what it was. So how do I make that up? Which had a lot to do with why I took a lot of time to come up with this, but we'll share that with you in a separate episode. If you enjoyed this, please share it with people. We love it when you review it and hope you guys do well. Ryan, thanks and we'll see you guys next time.

Ever wondered how some people build real wealth through acquisitions while others just sit on the sidelines? Well, I'm here to tell you it's not about luck. It's about having the right system, the.

Right deals and the right guidance.

And that's exactly what we give you in the EPIC Deal Fast Track. If you've been thinking about buying a business, but you keep getting stuck, whether it's finding the right deal, structuring the financing, or negotiating with sellers, you are not alone. Too many people waste months, even years just thinking about acquiring a business while the real opportunities pass them by. The EPIC Deal Fast Track is not another course. It's actually an implementation program and it's designed to get you from the idea to the acquisition in just 16 weeks or less. We work with you one on one to help you find, fund and close your first or next deal. And once you do, we're going to plug you into our elite EPIC board community so that you can keep scaling through acquisitions. We install three powerful systems in your business. The first is the Deal Flow Engine.

So you always have high quality off.

Market deals coming to you. Number two, we give you our offer and funding system so that you can structure offers that get accepted and fund them creatively many times with no money out of your own pocket. And number three, our closing and integration system so that you don't just buy a business, you actually successfully run and scale it once you have acquired it. Plus you'll have direct one on one support from an EPIC Deal Advisor every step of the way. And that's people that have actually come up through the system and done these deals themselves. That's the only way to become an EPIC Deal Advisor. And if you're serious about acquiring a business this year, don't just sit on the sidelines. Just text I'm in to 334-458-9034 and.

We'Ll get you in.

So text I'm in to 334458, 9034 will get you in. No fluff, no wasted time, just real deal making from people that are actually out there doing deals right now.

I'll see you there.