Pod Insights The $100 MBA Show MBA2565 How to Navigate the Uncertain Economy as an Entrepreneur About this episode Feeling overwhelmed by the unpredictable economy and unsure how to navigate it as an entrepreneur? Curious about what successful entrepreneurs do to ride out the storm and flourish? If you’re nodding along, today’s lesson is just what you need. Omar’s got some rock-solid strategies lined up to help you stay afloat and even thrive when […] The post MBA2565 How to Navigate the Uncertain Economy as an Entrepreneur appeared first on The $100 MBA.
Transcript 0:00 Speaker 00 You love what you do. You also love the idea of not doing it one day. But it's getting harder to know the best way to move into the future, towards retirement. We hear about inflation, rate hikes, the changing market. Got to get the kids through college, build an emergency fund, and then there's retirement. Here's where Fidelity comes in. Fidelity can help you find clarity in saving for the future, even as your path and priorities evolve. How? Well, they'll help you create a free personalized plan that adapts as your priorities change. They'll also show you what's called timely insights, small tips on ways to save and invest to help meet your goals. And you can monitor your plan, so you stay on target. The future's coming, and so is retirement. Fidelity can help you take it on your way.
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0:55 Speaker 01 Today's episode is supported by Cash App. When it comes to Bitcoin, you may be surprised to learn that it was invented way back in 2008. But you still haven't made the jump to Bitcoin yet? Cash App makes it easy. When you buy Bitcoin on Cash App, they hold real Bitcoin for you, one to one. And you can withdraw it anytime. It works more like real money and less like something locked in an account. No extra steps, no restrictions, just access and control when you need it. With Cash App, you can actually do that. For a limited time, new customers can get $10 added to their balance. Just use code BITCOIN10 when you sign up. And don't forget this part. Send at least $5 to a friend in the first two weeks. Terms apply.
1:38 Speaker 01 Cash App is a financial services platform, not a bank. Banking services provided by Cash App's bank partners. Bitcoin services provided by Block Incorporated brand. For additional information, see the Bitcoin disclosures at cash.app/legal/podcast. There's no way to sugarcoat this. The economy's in the toilet. Uncertainty, though, is a part of the game of entrepreneurship. When the economy takes a turn, there's another layer of unpredictability that happens. And it's easy to feel overwhelmed. But today, I'm going to share with you strategies to help you not only survive, but thrive during uncertain times. Let's dive in.
2:17 Speaker 01 Did you know that during the 2008 financial crisis, more businesses were started than any other time in modern history? Yep, lots of money was made because of the crisis. And this is nothing new. This happens all the time. After World War II, Japan had an incredible boom of economy because they basically capitalized on the fact that there's opportunity here. Honda started by picking up spare parts after being absolutely obliterated by the atomic bomb. Sony became a radio repair shop that operated out of a bombed out department store. Now, we're not going through anything near as horrible as that, but the economy is tough right now. And you need to know how to navigate it in your business
3:01 Speaker 01 so that you can make it at the other end and be one of the winners through this crisis. Today, we're going to explore how to adapt, how to stay flexible, how to position your business for success. So when the economy does uptick and turn for the better, you are ready to win. Let's start with step number one. So important, and that's focus on cash flow. A lot of people, when they hear the word cash flow, they're not really sure what it means. Well, all it means is that you have enough cash on hand to be able to make some decisions, to have options. You have cash coming in regularly, whether it's daily or weekly. You're not just waiting for one big lump sum every quarter or from one client or whatever it might be.
3:44 Speaker 01 Your ability to manage money coming in and out of your business can really determine whether you're ready to weather the storm. So if your cash flow is weak, this is the time to straighten it out. That's why I highly recommend whether you're starting a business or you're in a current business to inject some reoccurring revenue, if not all reoccurring revenue, in your business. Most of my successful businesses have all been based on reoccurring revenue. I had a software company called Webinar Ninja that got acquired, reoccurring revenue. My business right now, $100 MBA, this podcast, our sponsorship, reoccurring revenue. Our program, reoccurring revenue. The point here is that you want to make sure you have reliable cash flow on hand.
4:26 Speaker 01 I want you to audit your cash flow, identify areas where you can start cutting unnecessary expenses, but also explore ways to create consistent income streams like subscriptions or retainers. Step two, reassess your customers' needs. This is a step a lot of people just skip altogether when things start getting tough in the economy. In a shifting economy, your customers' priorities and pain points, they're going to change, right? Staying in tune with their needs and ensuring that you remain relevant in their eyes. So they're like, yep, this company's valuable. I can't cancel them. I can't stop paying them. I can't stop using them because they're still addressing my needs because they adapted.
5:08 Speaker 01 We noticed that during economic downturns, customers value tools that save them time and help them cut costs. So when the economy is bad, they're looking for ways to save time so they can spend time doing other things to make money or something that's going to save them money. So we highlighted those benefits in our marketing when we were selling Webinar Ninja, our software. We showed them how much money they're saving compared to cobbling all these other tools versus using ours. So as an action step, survey your customers, email them, talk to them on the phone, reach out to your customers, engage with them directly and understand right now during this time, what's their biggest challenge, right?
5:49 Speaker 01 Adjust your offering, adjust what you're giving them to align with their current needs right now. Let's keep it moving. Let's go to step three, build a financial cushion. I'm a big believer in having a cash safety net in the bank. Having that safety net gives you breathing room. It makes you able to have the ability to have strategic decisions, to make strategic decisions that are smart instead of decisions out of desperation. Okay? It allows you also to invest in opportunities that come about like an acquisition, buying a smaller company to help your company or buying a new tool or making a hire or buying new equipment for your business, whatever it might be. The point here is that when you have cash on hand and you have a financial cushion, you have power.
6:34 Speaker 01 This is how it works. In a bad economy, Interest rates go up, so cash is expensive, meaning to borrow money from a bank is really expensive these days. So you have more bargaining power, the fact that you don't have to borrow. You have cash on hand, you can make a decision quickly, and you can even negotiate some deals depending on what the deal is and who you're negotiating with, because business is all negotiable. But more importantly, we think it's bad now. You don't know how bad it can get. So it's good to have a cushion to make sure that your expenses are covered. Many experts say that you should have at least three months of operating expenses saved up just untouched in the bank. I think that's actually cutting it really close.
7:16 Speaker 01 Three months is like this, a quarter, very fast. I'm of the opinion of Bill Gates, founder of Windows, who always had a year of expenses in the bank just sitting there. And that's my belief. I think this gives me a cushion. It allows me to feel like no matter what happens in the next year, I'm able to operate my business and I have the cash to do it. Now, that seems extreme, but I like to have that safety. And it gives me peace of mind, allows me to sleep better at night. Now, as an action step for you, start saving 10% to 20% of your monthly profits into a business savings account. Just automate it, okay? Gradually build that cushion to three to six months to a year, if you like. And what you'll find is that every month you do this, you save 15% and a few months, you have another month of runway
8:01 Speaker 01 and another few months have another month of runway. And by the way, you could speed this up by lowering your expenses, okay? That way, you don't need that much runway to cover a lot of months. Step four, diversify your revenue streams. Relying on one income stream is risky, especially in uncertain times, okay? You never know when the economy will affect a certain market and therefore affect that revenue stream. Say, for example, you run an agency that helps people design websites. If your job is just to design new websites, then you might be relying on an income stream that might just stop because people are not building new websites, because they're not investing in new websites, because the economy right now is quite slow.
8:45 Speaker 01 But if you are also fixing current websites, improving, optimizing current websites to get them more money, remember, we talked about saving money and making more money and also saving them time, being on retainer, lowering their costs when it comes to their server costs, maybe you can outsource that and negotiate their bills. The point here is that you need to create different buckets of opportunity for your business to make cash so that there's not one point of failure. Diversification helps to weather fluctuations and find new opportunities. So when I saw a potential shift in the market with our software company, Webinar Ninja, I explored new revenue streams like courses, workshops, intensives, events.
9:29 Speaker 01 Now, by the way, we charge for them and those courses and those events allowed us to get new customers into the software. So it was sort of a marketing and cash generating activity. But it also made me feel like, okay, I have another way to make revenue in this business, not just by the memberships of the software. For you, it might be premium support. For you, it might be express delivery, whatever it might be for your business. So as an action step, identify complementary products or services that you can offer. So for example, if you're a consultant or coach, offer some software that you could sell, that you can resell and vice versa. Today's episode is supported by Rosetta Stone. I absolutely love Rosetta Stone because it's helping me learn Italian faster than I can ever imagine. Why do I want to learn Italian?
10:14 Speaker 01 Well, who doesn't love Italy? But of course, Nicole's family is Italian and I love to have some quick Italian conversations with her mom. And Rosetta Stone just came out with Rosetta Stone Sapphire, their biggest launch in over a decade. One of the coolest features is chat missions, which turns conversation practice into a game. With chat missions, you're put in interactive scenarios and given three objectives. A mission to accomplish, like asking how much something costs, ordering a cold brew coffee, or getting a wifi password. Along the way, you get real-time corrections and feedback to help you sound more natural and confident. It's a supportive way to build confidence before putting your language skills to use in real life. I've been using Rosetta ...at a stone for over two years and I actually can have some small Italian conversations
10:59 Speaker 01 with Nicole's mom now. Just the other day, she asked me, "When are you traveling?" And I said, "Dopo domani mattina," which means "After tomorrow morning." She was incredibly impressed that I was able to answer in Italian. How could you put a price tag on a happy mother-in-law? If you want to take your language skills to the next level, don't wait to try Rosetta Stone Sapphire. The $100 MBA listeners can get 20% off the Rosetta Stone Sapphire subscription when they sign up today. This gets you access to Rosetta Stone Sapphire in 25 languages. Support for today's episode comes from Square. You probably know Square as the thing you tap your card on at your favorite coffee shop, restaurant, salon, or local store. But for the person running that business, Square is a whole lot more than a way to get paid. Square brings the tools you need to run and grow your business together in one system.
11:44 Speaker 01 From payments on appointments, to staff, inventory, sales, and customer relationships. Whether you're selling lattes, cutting hair, detailing cars, running a restaurant, or starting something new, Square keeps your business tools working together so you can focus less on managing the moving parts and more on what's next. And right now, listeners can get up to $200 off Square hardware when you sign up at square.com/go/mba. That's S-Q-U-A-R-E.com/go/mba. Visit Square to get started because running a business is complicated enough. Your tools don't have to be. Step number five: Embrace flexibility and experimentation. Entrepreneurs who adapt
12:26 Speaker 01 quickly, they have a better chance at surviving uncertain times. I learned this the hard way about 15 years ago. I was very hard-headed and I just wanted to do what I wanted to do. And I didn't really open up my mind for different opportunities, experimenting with different things in my business, different ways of making an income, or selling my products or services, or different markets to go into. For example, during COVID-19, many businesses pivoted to online models. They started pivoting to virtual experiences, started pivoting to finding other ways to be successful in their business. They were forced to, right? But if If they were smart, they would continue to do that even after the pandemic.
13:10 Speaker 01 So they have, again, a diversification of revenue. I want to make this clear because this is going to be your action step. I want you to analyze your business and take a look at all the activity you do to bring in business, to make money, to get customers. What are the things that are actually really working well? Don't stop doing that. Put your foot on the gas on that, okay? Double down on that, but start experimenting with one new idea every quarter or so, every few months. Figure out a new strategy for marketing, or the way to sell, or a new product offering, or a pricing model. Treat it as an experiment. Treat it as a way to learn from the results you're getting, okay? It doesn't have to be earth shattering. It can just be one small part of your business. Continue to do what's working, but start using some new strategies and test things out.
13:56 Speaker 01 Business isn't like stagnation. It likes fluidity. It likes things that are moving, that are changing, that are improving, right? So don't be afraid to try a few new things every few months. We're down to our last two steps. Step six, double down on relationships. During uncertain times, it's even more important to build strong relationships that can help you open doors to new collaborations, to new partnerships, to new ways of making revenue. Okay? You need to go to every event possible that you can afford. You're going to need to go to every conference, every meetup. Any way that you can meet new people or reinvest and continue to double down on the relationships you already have. People are more likely to help those they trust. This is what I've learned through example.
14:41 Speaker 01 You're going to get introductions because they know you, because they just saw you, because they just spoke to you, or you're top of mind. I leaned heavily on my network during my challenging periods. I asked for favors. I asked for introductions. I asked if you want to partner up and help each other out. I vividly remember about five or six years ago, my buddy, Jordan Harbinger, who runs the Jordan Harbinger Show, another podcast, we were both kind of in a situation where we wanted to grow our shows. Things were getting really stagnant. So we partnered up. Hey, how about I promote your show, you promote my show? And we did that, and it really helped us get out of funk and start getting new subscribers. So as an action step, reach out to your key connections. Write down who are the top 10, 20, 30 people in your industry that you don't know
15:26 Speaker 01 or already know and want to reinvest in that relationship, okay? Get in touch with them, have a lunch, get on a call, right? Just call them up, "Hey, what's going on? I just wanted to check up on you. How you doing? Everything good? What's up with your business? What's the latest launch? Your latest product? This is what we're working on? Is there any way I could support you?" And don't worry, they will reciprocate in kind soon enough. Just offer value where you can and let them know that you're open to collaboration. That's it. That's all you gotta do. Step number seven, invest in yourself and your team. Uncertain times are a great time for you to sharpen your abilities, your skills, your ability to do better at what you do.
16:06 Speaker 01 This is the time where you start investing in courses, attending workshops, right? If business is slow, focus on those things, right? Improve your leadership and marketing skills. These things will pay off, right? And when things start to rebound, you'll be able to leverage those skills and start flying. So as an action step, set aside a time and budget for some professional development. You need to improve. Every person who's in any career invests in improvement in professional development, right? Their company usually pays for it. Now it's time for you to pay for it, right? Cause you are the company, right? Whether it's reading a book, or taking an online course, or going to a summit, or an event, or some sort of team training, this is the time to skill up and invest.
16:51 Speaker 01 So to wrap this up, uncertain times can be challenging, no doubt, right? But there's also a lot of opportunity. There's an opportunity to adapt, to innovate, to strengthen your business, to focus on cash flow, to stay in tune with your customers' needs, and build a better solution, build a financial cushion from all that revenue you're going to be making, right? Diversify your revenue streams. Embrace the flexibility of that uncertain time and say, "Hey, let me try some new stuff", right? Most importantly, use this time to invest in yourself like you're doing right now by listening to this podcast or watching this podcast, right? Invest in your team as well. It's one of the best moves you can make during this time. Thanks for tuning into the Hunter MBA Show.
17:31 Speaker 01 Remember bumps along the way in the journey of entrepreneurship is expected. This is just part of the journey. You're Going to go through this and it's a rite of passage is on the map of success. You have to go through it. There's no way around it. There's no detour. Okay. And don't worry about it. If you have the right mindset and the strategies that we talked about today, you're going to come out stronger on the other side. I know I've gone through a bunch of those downturns in my career and I am so glad I went through them because it allowed me to become a better entrepreneur. I can now easily navigate a tough time because been there, done that, seen this episode before. I'm Omar Zenem and I'll see you in the next lesson here on the $100 MBA Show. Don't forget to hit subscribe or follow on your favorite podcast app or YouTube.
18:16 Speaker 01 So you get our next episode automatically. I'll see you on that next episode.
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