10.24.22 — Outsmarting a recession
Preparing your business for the “slowing”
Last week I got to hang with clients in Nashville.
Always a special time with incredible people.
The topic of recession came up and in most cases my advice (unless you’re trading day to day) is just to ignore it.
It depends on the niche, industry, model, etc etc etc — but one person in particular was concerned about growing if we’re heading into winter…
Here is what I told him.
(For context — he runs a great operation training dogs in local cities; and while they train the dogs they also train the owners 😅)
WIDEN THE BASE
If you’re going to do anything (debatable on whether you should or even need to) - widen the base.
The pros of a wider base will ripple through your organization. MOSTLY due to distribution — we aren’t trying to “make more money,” we are actually offsetting the costs with easier (and speedier) distribution.
Advertising / acquisition is a form of distribution. You’re using FB distribution system to get clients and paying FB to do it via paid ads.
For this particular client — widening the base looks like this:
The main business trains dogs.
But they don’t groom them. Dog groomers have to find owners but the main business already has the owners.
Bolt on #1.
Now when people search “mobile pet grooming,” the opportunity becomes “would you like us to train your dog also?”
For the clients using the training service, the offer becomes, “would you like us to groom your dog once a month also?”
But then, a lot of owners are busy. They don’t always have time to walk or exercise their pets.
Dog walking is a real thing and tons of people are looking for it.
Bolt on #2.
These bolt ons don’t even need to make profit. They’re decreasing acquisition costs for the main brand and they don’t have to pay ad costs because of shared client interests.
This means they can compete on price and still come out ahead.
Then, after the grooming business is well funded and full roster - what about organic pet shampoo, conditioner, etc etc.
Pet owners are fanatics about their pets. If you can create a private line of healthy shampoos, soaps and conditioners, the grooming company can buy its own line and also sell the line to owners and other groomers.
Then what about chew toys and food?
All of these things are examples of widening the base.
A company that does ONE of these things needs profit pulled from it — a company that integrates these things together can offer leading quality products for much cheaper.
Because they are using built in distribution systems that are collectively owned “in house.”
I got a call this weekend from a friend who wanted to know - “what are you actually doing?”
He’s smart enough to know I’m not JUST consulting — although I LOVE consulting.
People who know business can see bits and pieces of behind the scenes or different pieces that seem disconnected.
They’re not disconnected.
I’m widening the base.
Not only do my consulting clients have a FAR BETTER experience (because of the ecosystem of offers and opportunities) but acquisition comes from literally EVERYWHERE.
I have industry-leading service brands that are top tier, head and shoulders above anything I’ve ever seen comparable, charging HALF the price.
This is why.
Distribution lowers the costs and raises efficiencies.
Ultra high profit is not needed, the client experience retains them for life, and all boats in the harbor rise together.
Consider this as you brainstorm.
This￼ is HIGHLY unlikely to be a “all time worst recession,” but things have tightened and will tighten some more, particularly in the next 6-12 months.
If you’re worried about it, look at distribution. Own that. Then keep plodding along 💪
Masterclass over 🚀
Enjoy the week,