Land the Plane Like You, I’M Hopeful a Recession Stays Off for a Few More Years

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Copyright © 2019 Donald Miller Words, LLC 2 Most business leaders are afraid of a recession— and for good reason. They remember the 2007/2008 downturn and are dreading the 20%, 30% or in some cases 50% decline in business. For some, this could mean laying off beloved team members, decreasing pay or running up their line of credit with the bank. For others, a downturn could mean the end of their business all together.

We are currently 9 years into a 10 year cycle this means a recession is certainly coming. Stocks are volatile, trade agreements are up in the air, and both housing and car sales have stalled. Both London and Hong Kong are now participating in the global affordable housing challenge. Still, main street is strong and unemployment is at record lows. The signals are mixed. The outlook may not be terrible, but any business owner should be concerned.

The Key is to Prepare Now When business is good, most leaders ride the wave without preparing for the inevitable downturn. But those who prepare will survive. And those who do what I outline in this essay may do even more than survive— they may thrive.

I will share 5 things every business leader needs to do to survive and thrive during a recession. A fixed mindset is that the recession is going to kill us. A growth mindset is that a recession gives us a chance to refine our guiding principles, clean out our overhead, prioritize our sales efforts, create products that sell during a downturn and position our company to explode once the money starts flowing again. The change we need to make is going from a fixed mindset to a growth mindset.

Body (overhead costs)

Engines (marketing Wings and sales) (products you have in stock or are creating)

Get the Business in Strong Working Order (Flight ready) I have always viewed a business through the metaphorical lens of an airplane. A business has 3 basic parts: the administrative overhead; products and product creation; and finally, sales and marketing.

These three aspects of a business correlate perfectly with the three aspects of a fit-to-fly aircraft.

The body of the aircraft is your overhead costs. The body should be kept as light as possible so the airplane isn’t too heavy to fly.

The engines of the airplane represent your marketing and sales efforts. When these engines are running soundly, the airplane has plenty of thrust. The more thrust you have, the heavier the body of the airplane can be.

The wings of the airplane correspond to the products you have in stock or are creating in your research and development department. The more surface a wing has, the slower the airplane can fly. If you have great products that people want, you create a smaller load on your marketing and sales department.

Copyright © 2019 Donald Miller Words, LLC 4 The most important thing you need to remember to run a successful business is the three aspects of your business (the body, the wings, and the engine) need to operate in proportion to each other.

If your overhead gets out of hand, the plane becomes too heavy and crashes. If your wings are too small (not enough products or your products are becoming irrelevant in the market) the plane will also crash. And, likewise, if you have puny engines (your marketing message is muddled or your sales team isn’t productive) the plane will crash.

Most business leaders would look at these three aspects and immediately try to trim overhead. Trimming overhead is important, but it can also cause panic in the ranks. We definitely want to trim overhead, but let’s do that last.

The first thing we want to do is let the team know where this airplane will be flying to and how we are going to get there. Unless the team knows we intend to fly this plane, they will not prepare the plane or have it flight ready.

Your team has likely been longing for a challenge and now you’ve got one.

If you see a recession as a chance to prepare for the eventual uptick in the economy, you’ll win in the end.

Copyright © 2019 Donald Miller Words, LLC 5 Here are 5 things every business leader needs to do to survive and perhaps even thrive during a recession. Consider this a checklist: Refine Your Guiding Principles 1 (Create a flight plan)

If you haven’t clearly defined your company’s mission and Next, define 3 core values that answer the question: core values, do it now. Nothing aligns a team like a vision “How are we going to behave in order to accomplish this for the future and a few principles that direct behavior. mission?”

Team alignment is critical during a downturn because Thought leaders like Ken Blanchard recommend only every bit of efficiency matters. 3 core values for the simple reason that people can’t remember more than 3. If you have 10, you might as well Professional bike racers tweak every centimeter of their have none. bike and its components so that it provides the most return for every calorie of energy the rider pushes into The core values for my company are: the pedals. • Play the Guide: Do everything you can to help the customer win. Defining your mission statement and core values are how • Be Ambitious: What other people believe is you get your entire team aligned so there is less wasted impossible, we believe is realistic. energy moving forward. • Be Positive: See the bright side in almost every situation. If members of your team chase shiny objects down rabbit trails, you are losing efficiency and productivity. While that These values direct behavior amongst our team members may not be visible to the bottom line while business is so everybody knows “how” we will accomplish our “why.” good, it will be when resources become scarce. The values are also in rank order, meaning we will willingly To create a good mission statement, invite your team neglect a core value in order to execute one that is more into a story. Rather than using boring business speak, important. make sure your mission statement has two components: • State the customers’ problem. Recently, a member of my team found out a young man • State your solution. attending our marketing workshop was sleeping in his car in the parking lot. He could afford the workshop, but StoryBrand Example: Most business leaders waste money not a hotel room. My team member immediately got him on marketing because their message isn’t clear. We a hotel room and a $500 prepaid visa card so he could train business leaders to clarify their message so their afford to eat meals with the other guests and not worry marketing dollars actually grow their company. about gas money to get home.

When you state your customers’ problem, your team Why? understands the need the market has for your company. Not only does this create a sense of urgency in your team Because the ambition of growing StoryBrand is not as (they are rescuing somebody from something) it also gives important as playing the role of guide in our customers’ each of them a strong sense of meaning and purpose when lives and helping them win. We forfeit our ambitions when they wake up in the morning. A good mission statement those ambitions interfere with our customer experiencing that positions your people as the guide to the hero (your a successful climactic scene. customer) will improve efficiency, productivity and morale.

Copyright © 2019 Donald Miller Words, LLC 6 The key with your guiding principles is to invite your team members into a meaningful story. Too many companies use business speak to define their mission statement, so nobody on their staff can remember what it is. A mission statement nobody remembers is completely worthless to unite a team.

Once your mission statement and 3 core values are defined, create a campaign to instill these guiding principles into the conscious and subconscious of every member of your team. Print them on the interior walls of your building, have t-shirts made, start a contest and reward team members who can state the mission and core values of the company. You should also open every meeting by reading the mission statement and Mission core values and publicly honor any team member who lives out Statement that mission statement or demonstrates the core values. and core values You must find ways of repeating the mission statement and core values as often as you can and in any way you can.

In a rowing competition, one of the most important positions in the boat is the coxswain. The coxswain steers the boat and calls instructions to the rowing team. The coxswain defines the direction and cadence of the effort as a way of unifying the team.

As a business leader, you define the direction and cadence of your team by repeating your mission statement and core values. Once the team is operating in unison and with great passion and energy, you will need fewer resources to accomplish your goals thus taking you one more step in preparing you for an inevitable recession.

The second thing we want to do is rev the engines. You want to get your sales and marketing team operating at peak efficiency. To survive a recession, you want to store up a grain silo full of leads. Your sales team is going to need those leads when the market slows down.

In order to get more leads, create a sales funnel. StoryBrand has plenty of resources to help you create a sales funnel but essentially what you want is: • A lead generator. • A follow up email sequence. • A sales protocol to follow up with those leads.

My book Building a StoryBrand has a step-by step roadmap for you to create a sales funnel. You could also attend one of our marketing workshops and outline it right there in the room. My team of coaches will make sure you’re doing it right.

The only people who will thrive during a recession are those who are remembered. If you’ve rested on the robust economy and cut back on marketing and sales, you will be forgotten. As we teach in our workshops: good marketing guides customers through an exercise in memorization. We want to help customers memorize why they need our products and services. A clear message and a sales funnel is how you get customers to memorize your offer.

Streamline Your Product Offerings 3 (Spread your wings)

A lot of business leaders I meet with make a similar mistake when trying to grow their business. That Streamline Your Revenue Streams mistake is this: They have too many revenue streams. Another problem I find with businesses is that they’ve created too many revenue streams. We may think the The problem with too many revenue streams is that it best way to make wings on the airplane larger is to confuses customers about what you offer. Customers increase the number of products we sell, but this can will only remember you if they know what problem spell death. you solve. When you solve fifty problems, they don’t remember you at all. The reality is, our teams likely waste enormous amounts of bandwidth chasing small amounts of money by creating revenue streams that are the Clarify Your Offering equivalent of rabbit trails.

Some of this is a messaging problem. If you have 50 What we really want to do is list our top revenue revenue streams ask yourself: “What one problem do streams as they relate to overall revenue and all of my revenue streams resolve?” profitability. Then, after we get a clear picture of how the company really makes money (you’d be amazed My friend Dave Ramsey has dozens of revenue at how many business leaders aren’t in touch with streams at his company, Ramsey Solutions. He has this data), we want to GROW the revenue streams several radio shows, a dozen or more books, several that are the strongest, ASSESS those that are conferences, podcasts, video outlets, software, and performing at a mediocre level and KILL those that even board games to teach kids how to manage are not producing. money. But in the end, Dave offers one thing: financial peace. In other words, grow the wings on the airplane with what’s already there rather than fabricating larger As long as he stays inside the single offering of wings with new revenue streams. Why? Because it’s financial peace, people will remember him. When the easier. Your people already know how to build and recession hits, you want people to remember you. So sell your dominant revenue streams and it’s likely what single problem do you solve? Once you define true that you’re nowhere close to reaching market that, make it the lead message in all your marketing. saturation. Keep doing what works and stop chasing Help customers to “memorize” you as the company of new opportunities you can’t be sure of. Stop chasing choice to solve that problem. $5k in revenue when you could use the same amount of energy chasing $50k.

The bottom line is this: Get your wings as big as possible so the plane can fly utilizing less thrust.

Trim the Overhead 4 (Lighten the load for flight)

Now to the hard part. We’ve got to make the entire plane lighter. The lighter the plane, the less surface area you need on your wings and the less thrust you need from your engines.

It is entirely possible that your company can make less top-line revenue but a greater profit during a downturn. The key is, of course, to increase your profitability.

The first step in lessening the overhead and decreasing the weight of the body of the airplane is to run a fast audit to cut costs. Either you, your accountant, or CFO can quietly (again, to not panic the troops) go through the books and find out where the money is leaking. Are there subscriptions to services that can be ended? Can a loan be renegotiated while the money is good? Can you offload a building that isn’t being used and put that money into a rainy day fund? Are there team members that can be moved around (move them from administrative to marketing and/or product creation so they are helping the plane fly)? Are there people who simply need to exit the company?

The wonderful thing about a coming recession is that it might force us to really analyze the company and figure out where we are wasting the most money. Regardless, a heavy plane is harder to keep aloft. Let’s lose some weight.

Get Your Finances In order 5 (Fuel up)

Lastly, we need enough fuel to keep the plane in the sky for the 2 or 3 years a recession may last. Consider Opening up Your Books to Your Team The money we use to run our companies does not I am a fan of opening my books to my entire team. look like a pool of water, it looks like a river. Money Anybody can look at a P and L sheet if they want flows through the company and we divide that money to and everybody knows how much money the up into reservoirs (rainy day funds) or into fields that company makes and spends. There are many water our crops (research and development and reasons for this but the two most important reasons product creation) while the rest goes to nurture our are that it earns me trust with my team and it also people, including yourself (I’m a fan of taking the gives them ownership of the company finances. profit off the top first, rather than last).

If you’re worried about your team knowing how In a good economy, money flows into the company much you make as an owner, you shouldn’t be. like a river. During a recession, money can trickle in People understand that if you take bigger risks you like a creek or stream. This is normal and it’s nothing deserve a bigger return and that the owner takes to worry about. But it does mean that while money is enormous risks. good, we need to build up our reservoir.

What may surprise you about opening your books Increase Your Rainy Day Fund is that ideas will come from places you never As fast as you can, start stockpiling money into a expected. When team members understand the rainy day fund. After you lower your overhead and financials, they can speak into the company and rev up your engines, this should be a little easier. But find ways of improving those financials. you’re going to need this money to survive the flight. Do you remember the amazing scene in the movie Have a plan in place to lower the amount of water Apollo 13 in which the team at ground control in flowing through the company. When the recession Houston worked together to get Tom Hanks and hits and you start dipping into your rainy day fund his team back home? If the leadership in Houston then the “low fuel” light has gone on inside the had kept everybody in the dark, nobody would airplane. Hopefully, when this happens, you will have have taken ownership or had the sense of urgency enough of a rainy day fund to make adjustments or to solve the problem. But when information flows to warn people about the fact they may be laid off. honestly and easily, Tom Hanks gets to live. We certainly hope this doesn’t happen and if you’ve done the other things I’ve recommended in this article it likely won’t, but we must be realistic.

Copyright © 2019 Donald Miller Words, LLC 11 Land the Plane Like you, I’m hopeful a recession stays off for a few more years. Regardless, when you read back over this document you’ll see that it’s not only a plan to recession proof your business, it’s actually just a great plan to grow your business.

The beautiful thing about a recession (and economic cycles really should be seen in a positive light) is that they force us to refine our practices. Economic health can make us lazy. A recession has a way of waking us up and causing us to get lean again.

Before we get into a recession, what would it look like for you to not only have a vision for your company that outlines how you are going to survive the recession, but also a plan that equips you to come out the other side ready to grow faster and larger than ever before? And what if, without the threat of a recession, you and your team would never have done the work?

A recession is not a bad thing. It’s a temporary reminder that we must be good stewards of what we’ve been given.

Clarify your guiding principles, create a sales funnel, streamline your offering, trim your overhead, and get your finances in order and you should be able to land the plane on the other side of the recession safely.

Thanks for taking the risks to run a business. Many, many people depend on you and the very fact you took the time to read this document means you’re the sort of leader who takes that responsibility seriously.

God bless you and your team,

Donald Miller CEO, StoryBrand