What Leaders Know: Four Business Owners On How to Survive Recession

Aug 7

[vc_row][vc_column][vc_column_text]THEY ARE OPENING THEIR FILES! What Leaders Know About Surviving Tough TimesIn 2008 and 2009 we experienced the Great Recession brought on by the subprime mortgage crisis. Many lived to tell the tale, scarred a bit by having to crawl back to where they began. What leaders know is how to see the signs.Any yet there are two huge differences -- the internet and the pandemic. One good. One bad. Being more online than we were in 2008 has helped make a pivot or find new offerings within our expertise. And that has helped us also stay in touch during a very scary time that requires us to isolate.But there are some universal things that all business leaders know about staying afloat in times of crises. One is "this too shall pass." The other is "success leaves clues."And so here some clues to getting through this recession (and the pandemic) from four entrepreneurs that made it through that recession and are still doing business right now. I asked them each the same questions.Wanda WenCo-Founder and Creative Force, SoolipWhat was something you did that helped you survive the recession of 2008?The year 2008 was a very tricky year. Not only did we have the economic crisis, my business partner and father to my children had passed in 2007. So, it was a triple whammy. What saved me was going deep inside, working on strengthening my center, and listening deeply to my instincts. Literally, I was the only thing I knew I could control. My three young children (at the time, 13, 10 and 6 years old) and Soolip depended on me.My instincts told me to pare down my six-store mini-empire and staff of 25 people. I needed to put my children first, as they were in the middle of their developing years, and I was their sole parent. So, I went down to one store in West Hollywood and for the next 10 years just kept putting one foot in front of the other. Most importantly, I made it a conscious choice every day to remain in a state of gratitude. Being in a state of gratitude is a choice we all can make, at any time, and in any condition.What is one thing you know now that would have helped you then?When you've reached bottom, there is only way but up. The law of life.What is the one thing you are doing now to help you face today's economy?Putting energy into the parts of the business that are flowing organically, rather than trying to climb a big mountain.Valerie McCartneyCo-owner of Enticing TablesWhat was something that helped you survive the recession of 2008?To put that year in context, I was laid off December 8 from a $200k job as head of franchise development, real estate and construction for a 1,000-unit restaurant chain.At that point, I did two things. One, to create income I started a franchise consultancy for restaurant brands, realizing that they wouldn’t be able to afford an in-house department, yet they would still want to be able to expand as it’s a primary source of revenue. And two, to save money, I stopped spending my weekends at Home Depot.What is the one thing you know now that would have helped you then?While I landed clients quickly, I struggled emotionally with thinking of myself as a “consultant.” I spent my entire career with large Fortune 100 companies where consultants were generally dismissed, if not disdained. I wish I would’ve gotten over my insecurities much sooner.What is one thing you are doing now to help you face today’s economy?I secured working capital in case the business needs it. I extended payment terms to my customers to encourage them to purchase. That provides cash flow, allows us a longer production time with limited staffing and gives our customers flexibility. I am keeping all fixed costs to a minimum so that the majority of costs are variable. If the business goes down, the variable costs go down commensurately.And, of course, I’m avoiding Home Depot, my monetary Kryptonite.David MerrellCEO and Creative Director, AOOWhat was something you did that helped you survive the recession of 2008?Even before 2008, we learned a big lesson from 9/11 and that was to NOT carry debt. We make sure now to have enough reserves to last six months with no income. This has helped us survive to date now. Although, the pandemic has definitely thrown a wrench into that. We didn’t anticipate that the “downtime” could be way longer.What is one thing you are doing now to help you face today’s economy?We have a two-pronged strategy at play. One is to get as much business as we can from pivoting to live virtual events. We’ve created Virtual Event Strategies with a strong bent towards broadcast-quality online events. Fortunately for us, we have the expertise to make this pivot. Secondly, we are reducing our monthly overhead as fast and as much as possible.Pauline ParryOwner, Good Gracious! EventsWhat was something you did that helped you survive the recession of 2008?I have been through a few recessions but this one was by far the worst! I have no idea how I survived as the memories are harsh but I am certain it was because I put $350,000 back into the company. I continued to keep the best relationships with my clients, working with their budgets. Slowly prices became more normal and we got back on our feet. I took the helm doing all sales as I had to dismiss all staff. I kept one assistant and just like at the beginning, I did it all again. I am thankful that client retention is probably the biggest part of our success. What is one thing you know now that would have helped you then?I believe if I had immediately reduced my expenses then my losses would have been reduced. I would have had many more restful nights because the overhead would have been manageable.What is one thing you are doing now to help you face today’s economy?The one thing we are doing is “cleaning up shop.” This means taking a look at everything, from sharpening our social media to creating a market place of to-go foods. I see this as a stepping stone to get some food products on the market. We are going through the process of packaging, labeling for nutritional values and so much more. How fabulous would that be? This is also helping us create virtual dinner box meals. And happily, we are doing 5,000 to 10,000 boxed meals for the Children's Hospital LA. This has been an amazing opportunity that has kept us afloat. I feel truly grateful every day that this came our way.

THREE BRAND THERAPY IDEAS

Stay front of mind by continuing to reach out with helpful, supportive newsletters. Tell small stories that connect.
Consider starting something creative, no matter how wild it might sound. Actually, the wilder the better. I listened to wedding producer and designer David Tutera yesterday on Party Slate and learned about his live Facebook "Dinners with David" series and a mentoring program that gives aspiring planners the ability to "follow" him for a year.
Become a leader and join or get involved with nascent advocacy and support groups such as Live Event Coalition.

Finally, I want to leave you with not one, but TWO inspiring quotes from Winston Churchill who, as prime minister of the UK, led his country to victory in the Second World War. He went through it all, war and peace, good times and bad. He is the embodiment of the fighting spirit. My favorite quote is ...“If you're going through hell, keep going.” But the line that summed up his personal career and the spirit that led the British people to victory and is one that will help us all today ...“Never, never, never give up.” [/vc_column_text][/vc_column][/vc_row]