Subscribe
Join 40,000+ sales and marketing pros who receive our 4x a week insights, tips, and best practices.
Thank you! You have been subscribed.

Free Guide: The Ultimate Inbound Marketing Strategy Playbook 2022

Download the Playbook
Fill out the form to get your playbook
Thank you! You have been subscribed.
... Inbound Marketing Marketing Strategy
Close
The Ultimate Inbound Marketing Strategy Playbook 2022

Free Guide:

The Ultimate Inbound Marketing Strategy Playbook 2022
Read the Playbook
The Ultimate Inbound Marketing Strategy Playbook 2022
Free Inbound Marketing Playbook
View The Ultimate Inbound Marketing Strategy Playbook 2022
The Ultimate Inbound Marketing Strategy Playbook 2022

Free Guide:

Take your inbound strategy to the next level

  • Master the 7 principles of highly effective inbound marketing
  • Dramatically improve your inbound sales
  • Get more buy-in at your company

What Small Business Leaders Need To Know to Thrive During a Recession

What I've learned as a small business owner during ups and downs.

By Marcus Sheridan

Marcus Sheridan also recommends this free guide: The Ultimate Inbound Marketing Strategy Playbook 2022.

What Small Business Leaders Need To Know to Thrive During a Recession

In my book They Ask, You Answer, I wrote candidly about one of the darkest times in my professional life. 

When the Great Recession hit in 2008, we thought our business, River Pools and Spas, would never recover.

Almost overnight, we lost much of our expected revenue as customers decided they weren’t comfortable going forward with spending on the pool we agreed to. 

And it was understandable. 

However, within a few months, our business bank account was overdrawn, and we were forced to contemplate shuttering retail stores, laying off workers, and, potentially, closing our business for good

Now, more than a decade later, I can look back on that experience as a truly formative one in my own development as a businessman and leader. 

Today, we again face economic uncertainty that comes from a complex bevy of reasons that stretch around the globe.

Although no two recessions are the same, the way you should prepare doesn't change. In this article, I'll share what I learned — and the tips I share with businesses today:

  • Seeing opportunity in every challenge

  • Key metrics to watch for to know what's coming

  • Making plans A, B, and C so you're ready for anything

I know this isn't the most pleasant conversation to have, but it's necessary. And you'll be glad you did. Let's dive in.

Free Guide: The Ultimate Inbound Marketing Strategy Playbook 2022

Plan for a recession begins when things are booming

Today, the economy is one more thing no one can seem to agree on. 

In some ways, the economy is humming along, with low unemployment and rising wages. At the same time, inflation, energy costs, and lingering pandemic fallout are troubling. 

Whatever's ahead, all businesses can use uncertainty to take a good look in the mirror and prepare for whatever is ahead. 

Economic downturns are part of the natural cycle of business.

While you can’t control the economy, you can prepare in the best way possible — and you can control your own reaction. However, if you choose not to prepare, you're less likely to make it through unscathed.

When a recession hits, your employees, customers, and clients will all look to you, as a business leader for guidance, and they will interpret both what you say and what you do when determining how they should react. 

Even when the waves get rough and the storm rages, people like to know that there’s a steady hand driving the boat.

Remember the old saying: A smooth sea never made a skilled sailor.

A culture of agility and openness is crucial to your long-term success

The truth about any economic downturn is that some businesses are guaranteed to gain market share, even as others lose it.

This happens in every economic contraction. Sometimes this comes with your industry, but in my experience, it is the small, agile businesses who are most likely to do this — to see opportunity amid the crisis. 

Although this sounds like cold comfort if you’re facing a recession, small business owners have an advantage because of the nimbleness that comes with being small

While small to medium-sized businesses (SMBs) might lack the resources of larger corporations, I like to say that they can be a “digital David in a land of Goliaths.”

Major pivots and new initiatives are more realistic with a smaller team. You can move quickly, shift to meet new opportunities, and react effectively. There is less red tape and training to take place.  

Secondly, the smaller the business, the less bureaucracy and the better the chance that everyone knows everyone else. This makes small businesses more likely to have the advantage of transparency, which becomes an asset in a downturn. 

I believe it is critical for business owners to be open and frank with their employees, and this should begin long before times get tough. 

The more transparent leaders can be with their team, the more likely those employees will feel trusting and informed. Value candor over comfort.

With a culture of transparency, you are more likely to have employees volunteer to accept new roles or change responsibilities if the company needs it during difficult times.

If you do have to close stores or lay off people, it’s best if they can see it coming and understand the rationale behind it, rather than feel blindsided. Should it come to this, you may have employees choose to leave and go on unemployment if that seems like the best option for them. 

Such decisions are always difficult for all involved. Transparency, I’ve found, is the best method for easing the pain.

A downturn can be a time of growth — with the right strategy

I don’t want to pretend that anyone ever hopes for a recession or dreams about a depression, but trying times call forth fortitude, initiative, innovation, and teamwork like nothing else. 

I know that River Pools and Spas would not be the strong company it is today if it were not for the storm we weathered together a decade ago.

Although it was a very difficult time for me personally and professionally, the decisions we made allowed us to emerge more sturdy and focused than we had been in the past.

Personally, I use the lessons I learned during those times every day when I speak to business groups, when I write, or when I make decisions to help lead IMPACT.

In a downturn you find energy and focus that you just can’t always summon elsewhere. 

You are forced to get creative, and to make decisions that you may come to realize you already should have made. 

In Jim Collins’ book Good to Great, he asks companies to develop a “hedgehog concept.” 

This comes from an earlier essay that argues that, while the fox knows many things, the hedgehog knows one thing really well. 

A hedgehog concept is the one thing your business does best. In a downturn, businesses should cling to their hedgehog concept — and that should be their guiding principle.

For us at River Pools, we realized that we were not doing retail very well. 

We had two beautiful retail stores where we sold everything from pool noodles to tanning beds. The tough economy made us see that these facilities didn’t align with our core goals, so we closed them.

Now, you may think that was a bad thing, but in reality, it was the right decision. It was a decision we didn’t have to make it when the economy was strong, however. 

The recession forced us to see the writing on the wall.

In turn, we were able to focus our efforts on installing fiberglass pools. That was our hedgehog concept, and that became our sole focus. 

Keep an eye on these 2 metrics to know when a downturn is coming

The downturn of 2008 took us by surprise. 

We, at River Pools, were not prepared, so our scrambling was all the more frenzied. But we were certainly not the only ones surprised. 

Major businesses and institutions were caught off-guard, and many did not make it through the recession. 

After all, Lehman Brothers Holdings had been in business since 1850, weathering the Great Depression and any number of smaller recessions, but the firm filed bankruptcy in 2008, which remains the largest bankruptcy in US history.

Today, with a myriad of metrics being reported by dozens of government and NGO organizations, it can be hard to know which ones matter to your business. 

recession-metrics

For small businesses concerned about a coming downturn, I would say there are two essential metrics to monitor.

1. Lead flow

If you are aware that your lead flow is trending downward and you haven’t really changed anything with your marketing, this should be a red flag. 

If you see this happening, you should use the relationships you have with industry peers to see if they’re experiencing the same thing.

Remember, recessions are something everyone goes through together. If you have friendships with competitors in your market, you can ask if they are experiencing a dip in leads as well.

2. Inaction

In my experience, the number one reason why a customer doesn’t choose to buy from a salesperson is not because they found a better solution elsewhere — it’s because they decide they can’t afford to make the deal, especially in a recession. 

The biggest enemy to sales is not the competition, it’s inaction.

It’s important to train your salespeople to build relationships with prospects that are strong enough to still have a conversation even if a deal falls through. That way, you can find out the real reason a deal didn’t close. 

If the relationship is a trusting one, the prospect will tell you, “you know what, we just looked around and said to ourselves, ‘we’re just too nervous about the market.’”

In such a case, you should remember that you didn’t lose the deal. There was no deal. What’s more, that might be a deal you can win in the future.

Again, a downturn forces you to be inventive. If enough deals fall through for a certain product or service, now might be the time to reimagine what you sell. 

Can you come up with a package that would help more deals close?

At River Pools, we were suddenly much less likely to sell our typical pool installation package, that usually ran about $60K at this time. 

So, we asked ourselves, could we come up with a $40K package that might bring in more deals, even if we make less profit and have to adapt our work process?

The business owner in a recession has to always be thinking creatively.

You'll be okay if you make plans A, B, and C

Future-proofing your company starts in the good times. It begins with communication and alignment. 

recession-plannning

If you don’t have those things in the good times, you can’t expect that they will suddenly be there in a downturn. Pain and struggle magnify every element of your company. If there are divisions or fractures, those will get worse.  

By contrast, the more aligned and the more self-aware you are, the more foresight you’ll have in a recession.

Business owners and leadership teams should be having a conversation in which they make plans A, B, and C. 

They can say, okay, for plan A: let’s say there’s a moderate downturn. For plan B, let’s say there’s a significant downturn. For plan C, let’s say there’s a recession.

That way, the scariest prospect is out there in the open, on the table. 

Then, you can start planning for it. 

Right now we're all experiencing some economic challenges in 2022. We're trying to imagine what 2023 will be like. So, at this point, because we're speculating, we have a great chance to plan.

At River Pools, we installed 140 pools in 2021. In 2009, during the height of the crash, we installed 70. That was our worst year.

So, we look ahead to next year and think, what if we only sold 70 pools next year. What would our business look like?

That’s our “plan C,” and when it’s out in the open, it suddenly becomes less scary.

Economic struggles reveal the soul of a business — and the character of its leaders

Bad times are inevitable, but they can spur growth and inspire focus. When things go badly, it doesn’t help to pound sand and wallow.

You have to move quickly through the negative and focus on the solution.

Put the worst-case scenario out there on the table. What is it? Is it laying off half of your workers? Is it closing a location?

If you and your leadership team can agree on what the worst events could be, you can start to get solutions on the table. 

As hard as it can be, I urge you to reject negativity, which can be contagious. 

As a leader, you have to model optimism and pragmatism. Be open with your workers about the reality, but focus on the solution.

Remember, in every single downturn, someone is going to gain market share. How can you be the company that gains?

With a steady demeanor and the right attitude of nimble, shrewd decision-making, you can find recessions to be times of clarity, purpose, and direction.

It all comes back to being prepared — and choosing the right outlook.

The Ultimate Inbound Marketing Strategy Playbook 2022

Free Guide:

The Ultimate Inbound Marketing Strategy Playbook 2022
Read the Playbook
The Ultimate Inbound Marketing Strategy Playbook 2022

Free Guide:

The Ultimate Inbound Marketing Strategy Playbook 2022

Take your inbound strategy to the next level

  • Master the 7 principles of highly effective inbound marketing
  • Dramatically improve your inbound sales
  • Get more buy-in at your company

Topics:

Marketing Strategy
Executives and Leaders
Published on May 23, 2022

Recent Articles

4 Ways To Recession-proof Your Website In 2022
June 9, 2022 • 5 min read
Demand Generation vs. Lead Generation: What’s the Difference?
June 6, 2022 • 5 min read
What Small Business Leaders Need To Know to Thrive During a Recession
May 23, 2022 • 7 min read
Blog Editorial Calendar for 2022: Templates, Examples, and Tips
May 21, 2022 • 6 min read
Green Energy Inbound Marketing Strategy: The DIY Approach to Getting More Customers
May 7, 2022 • 9 min read
HubSpot Pricing: Your Guide to Everything HubSpot Costs for 2022
April 29, 2022 • 13 min read
33 Most Important IMPACT+ Resources To Train Your Marketing Team in 2022
April 26, 2022 • 13 min read
SaaS Inbound Marketing: How to Get Started With Your Strategy (+ Examples)
April 16, 2022 • 9 min read
5 Revenue Metrics You Should Be Measuring
March 29, 2022 • 6 min read
What Short-Term Wins Can We Expect With They Ask, You Answer?
March 15, 2022 • 6 min read
19 Business Blog Topics Your Audience Wants You To Write About
March 14, 2022 • 12 min read
10 Marketing KPIs You Should Be Tracking
March 3, 2022 • 9 min read
Why Does They Ask, You Answer Actually Get Results?
February 24, 2022 • 5 min read
Inbound Marketing for Financial Services Providers and Financial Advisors (+ examples)
February 19, 2022 • 10 min read
Sales vs Marketing in 2022: What’s The Difference?
February 7, 2022 • 7 min read
How To Set Marketing Goals Based on Business Goals
February 1, 2022 • 6 min read
Video Marketing: What Your 2022 Business Video Strategy Must Include
January 17, 2022 • 10 min read
8 Crucial Elements Every Homepage Design Should Have [+Video]
January 15, 2022 • 6 min read
5 Organizational ‘Cleanses’ To Start Your Year Off On the Right Foot
January 1, 2022 • 6 min read
What Should a 2022 Content Marketing Strategy Include?
December 30, 2021 • 9 min read
Brutally Honest Pros and Cons of They Ask, You Answer for Digital Marketing
December 7, 2021 • 10 min read
The Step-by-Step, 12-Month, DIY They Ask, You Answer Implementation Plan
December 2, 2021 • 16 min read
‘The Big 5’ Best Topics For Your Business Blog That Drive Traffic, Leads, and Sales (+ Video)
November 26, 2021 • 9 min read
Why Trust Is the True Currency for Any Business
November 16, 2021 • 5 min read
How To Get Started With They Ask, You Answer: Your First 6 Months
November 11, 2021 • 11 min read