Recession or Not, Here are 4 Tips to Power Boost Your Business Planning for 2023

Hi friends, I'm Bobby LeHew, Chief Content Officer at Commonsku. Occasionally we'll read an article from our blog that was popular with the community or a timely article based on current events. Today I'm sharing the article, Recession or Not, Here Are 4 Tips to Power Boost Your Business Planning for 2023. We've been hearing and talking recession rhetoric for months, and by we, I mean the collective we—business leaders, media, economists, and the world. Regardless of whether there will be a recession or whether we're already in a recession, the economy is showing signs of slowing down, or as The Economist put it, "reality has caught up with rhetoric." Yet many who predict a recession for 2023 do so lightly. In Tom Standage's Top 10 Trends for 2023, he predicts that most economies will go into a recession, "but America's recession should be relatively mild." Morgan Stanley said that the U.S. may skirt a recession entirely. Even Goldman Sachs now sees a slimmer chance of a recession than previously predicted. But when the news headlines blaze with Jeff Bezos warning consumers to spend less, claiming things are slowing down, most of us sit up and take notice. After all, Bezos is in the business of selling us, well, Everything, including those large-screen TVs he just told us not to buy. Here's the problem: you don't have time to wait for all the pundits to agree and tell us we're in a recession. By the time there's consensus among the world's brainiacs and billionaires, it'll be obvious. The real question is, what can we do about the uncertainty of it all now? The good news, regardless of whether we're already in a recession or whether there will be a recession or whether there won't be a recession or whether there will be a hard landing or a soft landing, for business planning purposes, you can still find your focus for growth for 2023, regardless of the economic climate. Here are 4 tips that will help power boost your business planning for the upcoming year. Number 1, don't let news dictate your moves. Some of today's most successful companies started during a recession: Mailchimp, Uber, Airbnb, Slack. Orbi Parker, Venmo, and many more. Nate Bailey, president and founder of Ideation, a distributor based in Portland, Oregon, started his career in the industry during a recession. Because of that timing, Nate was given a gift: grit, tenacity, hunger, ingenuity, and mostly heedless optimism. It worked. In 2022, Ideation was honored as one of Inc. 5000's fastest-growing companies. Nate will join us on stage at SKUCon in Las Vegas for a fireside chat about his experience. As headlines of layoffs, wage freezes, and hiring freezes creep into your feed, live by this edict: don't let news dictate your moves. At SKU Camp in Brooklyn in September, 3 of the industry's largest suppliers joined Katherine Graham, Common SKU's co-founder and CEO, on stage to discuss the state of the industry now and their perspective on the future. The panel featured David Nicholson, Vice Chairman at PCNA, Dan Pantano, President and CEO at Alpha Broader Prime, and Jonathan Isaacson, Chairman and CEO at Gemline.

During the interview, Jonathan Isaacson said, "There will be industries that continue to do exceedingly well even in a downturn. The people who are supplying the electrification of the country, whoever is in that vertical is going to continue to do very well no matter what. And in every downturn, there are industries that do really well and there are parts of businesses that do very well. During COVID who bought? HR. Who didn't buy as much? Sales and marketing. So if you were selling, if you're selling a trucking company and they can't find truckers, what are they doing? They're turning to us to solve a problem. So the people who are going to do well during whatever time comes are the people who understand that we're not selling products, we're solving problems. And that's true on the supplier side, and it's true on the distributor side. There's always opportunity out there.

Treat news headlines as suggestions, not commands. Yes, Jeff Bezos might be the richest man in the world, but remember that when he speaks publicly on a major news network, he's speaking to his first audience and perhaps his only audience. His investors. There's always opportunity out there. Number 2: Focus on industries. To Jonathan's point, many industries will thrive during an economic downturn. Forbes recently published an article that detailed which industries you should invest in during a potential recession. We can take our cues from this list on which industries to target as either clients to grow in 2023 or prospects to approach. The Forbes list included healthcare, basic consumer goods, utilities, discount retailers like Walmart and Costco, alcohol, maintenance and repair services, accounting and payroll services, and transportation. Other experts cited industries like self-care or small indulgences like candy, beer, wine, and the pet industry. The Bureau of Labor Statistics cited that during the 2007-2009 recession, The 4 industries that performed well were healthcare, government, tech, and education. This is incredible news for our industry because according to PPAI, the top 10 industries that buy promo are healthcare, business services, retail, financial, manufacturing, education, food and beverage, tech, not-for-profit, and construction. Compare the lists of those who thrive in a recession and promo's top buyers by industry, and you end up with 7 out of 10. In other words, we're already positioned to work with most of the industries that fare well during hard times. Recession or not, focusing on these industries is simply a solid strategy for your business planning for 2023. Action step: Tighten your 2023 focus on clients who are in industries that do well during hard times. Create a prospect list of those same industries and focus on solving problems. Number 3: Keep top talent and keep hiring top talent. The war for talent will not wane. Job growth might slow, but talented people can now work from anywhere and are more motivated to work for companies whose values, culture, and mission align with their personal passion. The idea to follow suit with wholesale layoffs is tempting, but Stephen Mim from Bloomberg suggested that all of these mass layoffs in big tech are an old guard mistake. Citing a study that looked back over more than 3 decades and found that CEOs, quote, who pursued a strategy of mass layoffs were far more likely to end up receiving their own pink slip for their bungled efforts, end quote. Bain, the global management consulting firm, put it this way, quote, think of a recession as a sharp curve on an auto racetrack, which is the best place to pass competitors but requires more skill than straightaways. The best drivers apply the brakes just ahead of the curve. They take out excess costs. They turn hard toward the apex of the curve, identify the shortlist of projects that will form the next business model, and accelerate hard out of the curve, spend and hire before markets have rebounded. In our interview at Sku Camp, Jonathan Isaacson talked about it in terms of control, focusing on what we can control and what we can't. And he zeroed in on our most important asset: people.

I actually look at all this stuff a little bit differently. I only really worry about one thing, uh, and we only really worry about one thing because there's only one thing that we can control, which is the quality of the people that we hire. Everything else comes out of the quality of the people in the organization. And if we're going to get the technology enabled, if we're going to get the processes reorganized into a digital world, it's all about the people that operate within the organization. And our ability to win or lose is going to singularly hang on our ability to hire the right people in the organization. If we screw that up, everything else goes to hell. If we get it right, we win.

Action step: review your team, analyze your strengths and weaknesses, review your pay structures and comp plans. Be open-minded to the fact that top talent may be more easily acquired during lean times than robust times, and mostly Be prepared to hire when others hide. Recession or not, recruiting, hiring, and keeping top talent is a solid business strategy. And finally, number 4: plan for growth. Substantial growth. You've likely heard of the Post versus Kellogg story cited in a famous New Yorker article titled "Hanging Tough." Quote: When the Depression hit, no one knew what would happen to consumer demand. "Post did the predictable thing. It reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. By 1933, even as the economy cratered, Kellogg's profits had risen almost 30%, and it had become what it remains today: the industry's dominant player." Fortune favors the bold is a mantra our CEO often repeats. Study after study shows that those who invest more in marketing and in their business grow during tough times for one simple reason: you become a survivalist, a pirate, a challenger brand. To quote the New Yorker article again, recessions create more opportunities for challengers, not less. When everyone is advertising, it's hard to separate yourself from the pack. The article points out the difference between sinking the boat, wrecking the company by making a bad bet, or missing the boat, letting a great opportunity pass. Recessions can be a great opportunity to race ahead of the competition, possibly leading the pack for years to come. Action step: invest, invest, invest. Invest in marketing, invest in your people, invest in tech, invest in your team's continual education, invest in yourself. When others pump the brakes, push on and pass by. Uncertainty is our new norm. Embrace it. As a worldwide pandemic descended on us in 2020, many of us thought it was the beginning of the end, but instead you thrived. And our industry, the branded merch medium itself, elevated its importance for brands. We were all suddenly and rightfully thrust into solving client problems through product. Our industry matured during the most difficult season of our lifetime. If there's one lesson we collectively learned, it's that the only thing we know for sure is that uncertainty is our new normal. We might be in a recession, or there might yet be a recession next month, next year, next week, but it doesn't have to be your recession. If this article was helpful to you, you can find more each month in our brand new newsletter called The Backpack. It's a monthly newsletter featuring trends in merch, top articles and podcast episodes, and global news impacting merch life. It's a roundup of our best content that we email to you in a digest form on the first Friday of each month. You can subscribe at community.commonsq.com/the-backpack. That's the-backpack, or just Google CommonsQ Backpack. Today's article was brought to you by CommonsQ, the work-from-anywhere platform that powers your connected workflow, enabling both distributors and suppliers to process more orders easily and dramatically grow your sales. To learn more, visit commonscue.com. Until next time, friends.