There are some economic headwinds a-blowin’. It would be unwise to completely ignore them. And even sillier to not be prepared if things keep going south.
The good news is most training gyms can buffet macroeconomic storms pretty well. If you’ve been doing the right thing all along, if you have a reliable marketing and sales system, if you deliver amazing training day-in and day-out, you’re gonna be ok.
To some extent, small businesses can “create their own economy.” Particularly if you’re lucky enough to be in a rural market.
Having said that, I had a chance to read a slidedeck put out by Sequoia Capital a few weeks ago. And it ain’t pretty.
Admittedly, Sequoia is a venture capital firm. Venture-backed tech start-ups don’t always translate to brick-and-mortar training gyms/ small businesses. After all, many of them are burning cash for years at a time. They rely on multiple rounds of capital raises. So in many ways, this kind of cratering leaves them more exposed than a typical mom-and-pop small business.
Nonetheless, there were some great thoughts about how to rise to this occasion. So I wanted to share some takeaways that are applicable to our types of businesses.
1) Crisis = Opportunity
If things DO get bad (again), it will present opportunities.
While it’s hard to root for an economic shellackin’, for better or worse, methinks labor markets are going to get friendlier. As companies lay off employees, rescind job offers, and decide to keep headcounts lower, the war for talent will settle down.
(Looking to find more employees now? Learn more HERE.)
And if you somehow made it through the last two years without making the big changes you know you need to make to your business?
Great news! You may get another shot now.
2) Show Up As a Leader
When times get tough, you need to double down even harder on WHY your business exists. One of the lessons learned in the last go-round: you can’t over communicate. Provide your team with as much clarity as you can, while being real about what you don’t know.
Lofty mission statements aside, how does your training gym impact the lives of your clients? How can you keep that top of mind for your team?
If your business closed tomorrow, what would be lost? Why does their work matter?
How can you share the opportunities to actually make your business better during challenging times?
What’s the vision you will paint of a new and better world on the other side?
And how will you balance brutal unflinching honesty about the facts on the ground with an iron-will to survive and thrive?
3) Prepare Your Finances
Here’s the thing: challenging market conditions don’t really require different financial strategies. They just make the stakes higher if you play it fast and loose.
To paraphrase the famous Warren Buffet quote, when the tide goes out you learn who’s swimming butt-ass nekkid.
The only way you stop playing the game is if you run out of cash. Now’s a good time to top off your emergency fund, consider lining up a line of credit if appropriate, and be ruthless about cutting unnecessary expenses.
On the revenue side, be proactive about planning and executing your marketing calendar. Brainstorm time sensitive offers that will attract former clients to return and new clients to take the leap.
And for the love of all that’s holy, if you haven’t implemented the appropriate price increases to address inflation and your increased expenses, the best time to do so was months ago. The second best time is ASAP.
Listen, Sequoia may be wrong. I sure as hell don’t know. Macroeconomic predictions are about as reliable as cutting open a goat’s heart and looking for fortune-telling “signs” in the blood-spattered dirt. With apologies to CNBC, no one has any clue.
Things may not turn out fine. Perhaps we’ll ride the fine line and avoid a recession.
Regardless, the above considerations are always valid. And far better to be prepared with extra margin for chaos then caught with your proverbial pants down.