Periodically — especially during election years — the media likes to intimidate the masses with the inevitable “financial crisis” and suffering our economy is about to weather. Obviously, they offer no solution, but they are going to report all the grisly details….
News flash! The upcoming economic crash is NOT the first of its kind, nor will it be the last.
On top of all that, corporations and people have survived through recessions — and some have even come out better at the other end.
So don’t buy into the fear, and let me show you how you could do business in a downturn and then thrive…
The Reality of a Financial Crisis: It Affects EVERYONE
Although I’m trying to use some humor to make an unpleasant situation more palatable, I do realize the serious effects these crises create…
At the beginning of the pandemic, we all saw firsthand the economic upheaval, unemployment rates, and uncertainty. We saw the closing of national borders. And we all were glued to our TV sets waiting for things to return to “normal.”
The unfortunate truth is these collapses impact the lives of everyone, and there is no going back to the way things were before.
EVERY FINANCIAL COLLAPSE CHANGES THE ECONOMIC ENVIRONMENT FROM THAT POINT ON.
Therefore, how you prepare for a recession is also the way through…
What Mindset You Need to Prep for Financial Collapse
The best approach to prepare for whatever the economy may throw at you is to take responsibility for anything that may happen.
I know you’re probably thinking, “Grant, I can’t control the stock market, the pandemic…”
That’s true to an extent. However, you can make the decision to get through it — no matter what it takes. You do have the choice in these situations to get better or to get worse…
It shouldn’t be a financial crisis that pushes you to always aim for better — that is how you should live your life.
I have made it through two of these major recessions so far. And the only reason I am where I am now is because I didn’t roll over in the face of disaster.
That being said, there are errors I made that you should avoid…
Mistakes I Made in the 2008 Recession & What I Learned
A dominant factor in my business successfully making it through the pandemic is that I learned from the missteps I made in the housing crash of 2008. Let’s break them down individually and explain why they were the wrong moves…
First, I spent too much time thinking. Difficult as it is not to overthink, this is not going to help you in an economic downturn. Considering courses of action and their consequences amount to a whole lot of nothing.
Action is going to be the only solution, and we’ll get into exactly what to do later. For now, I need you to pay attention to what not to do…
Next, I foolishly managed my money instead of putting it to work. During that Great Recession, I pinched every penny. At the time, this seemed like the right thing to do, which it was, in a sense.
On the other hand, I should have been putting more of what I had into my business and ventures that would keep me growing once the economy evened out. Had I done so, I would have been much further than I am now.
I hate to admit that I ever did this, but I became overwhelmed by bad news, blame, and confusion…
At the time, I was constantly watching the reports. I was angry with the banks and unsure of what to do. That caused me to lose confidence and lash out at others around me….
As you can see, that doesn’t make the situation any better and keeps you from making rational decisions.
DON’T LET YOURSELF GET STUCK.
Subsequently, I also didn’t convert my liabilities into assets. Yes, there are ways to do this using your debt, inventory, etc. Additionally, some things you view as assets may not be in a financial crisis.
Fear kept me from taking this critical step, and I hope you never miss it.
Uncertainty causes people to retreat — a trap I unfortunately fell into during 2008. As a result, I didn’t communicate with my customers, lenders, etc.
Why is this a problem?
OBSCURITY IS DEATH IN THE MARKETPLACE.
More communication lets them know you’re here and keeps you in the front of their mind. That puts you first when they are more confident in spending or lending money.
The last bad move I made was not understanding government programs. Don’t get me wrong, I am not advocating for anything that rewards lack or production.
Nonetheless, the United States government does sometimes provide allowances that are a massive relief for business owners to keep afloat. You shouldn’t discount them.
That wraps up all the oversights I made during the first world-shifting financial crisis I weathered and what I took away from them.
But we’ve spent enough time in the past, let’s look at the action plan for the future…
My 8 Steps to Expand — NOT Contract — During a Financial Crisis
You may have noticed something about all the mistakes I talked about above…
MY DOUBTS AND DREAD CAUSED ME TO PULL BACK AND CONTRACT.
The overall strategy to overcome a recession is to make moves that will push you to expand beyond the economy flailing.
Each of the following actions is going to do just that…
1. Meet with Your Executive Team
The very first thing you’re going to do when the proverbial shit hits the fan is to call a meeting with your executive team. Your objective in doing this is to get them to accept that there is a real financial problem going on.
No one really wants to look at how bad things are. Some people still can’t fully confront tragic events that happened 20 years ago.
For that reason, don’t take this step lightly.
Everyone on your team needs to be fully aware that it is sink-or-swim because that is how you can make it to the next step and through a recession…
2. Decide to Turn a Crisis into Expansion
Once everyone is on the same page that this is not a drill, you can reinforce that you will flourish — regardless of the economic climate…
Being firm that this is the only way to survive the threat sets up the right order of magnitude. The choice to grow through a financial collapse is definitely the road less traveled, but so is the one to unshakable wealth and success.
I realize this sounds like a lot of hype, but you’re going to need the energy for the rest of the tough stuff ahead…
3. Consolidate Your Resources
If you want to grow and go faster, you inevitably will be required to unburden yourself to some degree. As such, you will have to strip all the “extras” of doing business…
For you, this could mean amenities, facilities, or — unfortunately — staff.
Obviously, it’s hard not to feel some negative emotions while going through this step. Still, it has to be done.
A good principle to guide you in these difficult matters is to get rid of anything that you can’t manage.
Once you, your staff, and your company are streamlined, gather the troops for step number four…
4. Meet with Remaining Staff for Expansion Decision
Just as you briefed your executives on the hard fact that there is a financial crisis, you are going to do the same with the rest of your employees.
Your team should be made aware that all statistics are going to be measured and lack of production will not be tolerated…
NEVER LOWER TARGETS, JUST INCREASE ACTIVITY — ESPECIALLY IN A FINANCIAL CRISIS.
Making excuses for your team and lowering revenue targets based on the market will NEVER result in growth. Surviving a recession takes holding everyone to a higher standard.
5. Be Proactive with All Clients and Partners
Another way to define “contract” is “to pull away from.” While the market is in a downturn, most businesses will take that approach in hopes to conserve resources…
Limited hours of operation. Lowered prices. Less outreach to clients and associates.
I’m sorry, but this is just plain stupid!
YOUR CUSTOMERS AND PARTNERS ARE THE PEOPLE WHO TRANSACT WITH YOU, FACILITATING YOUR EXPANSION.
Similarly, you assist their ability to do business with your product or service.
Therefore, communicating with partners and clients is key for you to collaboratively work through a recession. Outreach actually has proven to equal more collections, as it assures them you’re both making it out on the other side.
Don’t keep your allies in the dark.
6. Assess all Assets, Products, and Offers
Mind you, evaluating assets is different from step number three. Consolidating your resources is all about getting rid of dead weight.
When assessing your assets and inventory, I want you to answer these questions for each on a list:
- What is it?
- How much does it cost?
- What obligations are attached?
Additionally, examine your offers and products and see if some are not going to work in the new marketplace…
For example, my company does sales training events that were traditionally held in person. In 2020, that was no longer feasible. As a consequence, we turned to virtual options to continue to offer this product.
In this step, you will go over your assets logistically and see how you can pivot.
FLEXIBILITY IS ONE OF THE ATTRIBUTES OF TRULY SUCCESSFUL COMPANIES.
Nonetheless, your next action is to become more rigid in terms of how you operate…
7. Tighten Discipline in Every Department
As we discussed earlier, setting high expectations with your staff and increasing production are the way out of a recession. Accordingly, not meeting those expectations must have penalties…
I know this is harsh, but it’s the reality of what it takes to handle any crisis. You can’t afford to keep those who are falling behind the rest of the pack.
Meanwhile, there has to be tighter discipline in your finance department as well. There should be no spending without your approval across the board. As the owner of your business, that is the bare minimum as far as running a tight ship.
After all this, there is one more thing I want you to take care of…
8. Apply for Government Programs IMMEDIATELY
This final step is so important that I also listed neglecting it as one of my biggest mistakes…
DO NOT FAIL TO LOOK INTO FEDERAL PROGRAMS AND ENROLL RIGHT AWAY.
In a recession, government programs are an asset and should be utilized. Equally important, often there are deadlines or limits to how many people are accepted — so don’t be last.
Lifelines of this magnitude are a gift in a financial crisis when sources of relief are few and far between.
Pay attention to what’s available and sign up for the appropriate ones as soon as possible.
How Does All This End?
The good news is that, in the end, we’re all going to get through this.
There is just a final question…
WILL YOU BE BIGGER, FASTER, AND MORE CONFIDENT — OR NOT?
Each of these financial crises is a turning point. On the other side are the biggest opportunities of your lifetime — if you have the tools and know what to look for.
In this article, I’ve shown you where the landmines are and the battle plan to come out victorious. Still, there is room to dive deeper…
My sales training platform, Cardone University, not only has further information on beating recessions but also the business strategies you and your team need to succeed in any economy. You can book a call with my team here for more information.
But to conclude, we will survive this collapse and the next one…
Let’s get through it better together.
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