How to Prepare for the Looming Recession

There is a LOT going on with the economy, local politics, global politics, and more right now. Everywhere you turn are headlines about inflation, recession, war, uncertainty, market declines, and more. With all of these scary headlines, the question becomes: “How does all of this affect our businesses and our lives?”

It’s a difficult question to answer as there are so many variables to consider and so many unknowns. However, we do know that there is nothing new about inflation, recessions, wars, market fluctuations, and many of the other things going on in our world today.

So, one of the best ways to chart our path forward is to look at the lessons we’ve learned in the past. In times of change, fortunes are lost and fortunes are made. Inflation and a looming recession could spell disaster for your laundromat and your personal finances, or it can add a zero to your income and net worth.

In today’s show, we’re going to explore some ways that laundromat owners and investors can prepare for a recession, whether one is coming or not. We’ll focus on 7 primary steps to take to prepare your business and yourself for a potential recession and set you up for success no matter what happens going forward!

The seven primary ways to prepare your laundromat business for a recession are:

  1. Lean out your business- cut unnecessary or excessive expenses and run a leaner business for a while.
  2. Cash flow is king- Business and investment valuations only matter if you have to sell. Cash flow can keep your business afloat until valuations recover.
  3. Have cash on hand- Cash on hand can help you endure lean times and can also allow you to take advantage of the opportunities a recession can create.
  4. Reassess your leverage- Long-term debt can be a great way to build your business and your wealth, but being overleveraged during lean times can get you into trouble. Before a recession hits is a great time to make sure your business (and your personal finances) are not over-leveraged.
  5. Level up your operations and customer experience- Giving customers every reason to trust you with their business is always important, but it is especially important when businesses are fighting for their survival. Now is a great time to level up your customer service and wow your customers!
  6. Join a community of like-minded people- There is a lot to navigate during down times and, as business owners, we face a lot of challenges. You can meet those challenges head-on a lot stronger with a strong community behind you!
  7. Look for opportunities- Opportunities arise during recessions. If you’ve followed the first six steps outlined above, you should be in a position to take advantage of opportunities to pick up assets at a discount during a recession.

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Episode Transcript

00;00;00;05 – 00;00;26;13
Jordan
Hey. Hey. What’s up, guys? Is Jordan with the Laundromat Resource Podcast. This is show 97. And I am pumped that you’re here today because today we’re going to talk about all the crazy things going on in the world, some things that might be coming down the pipeline and what some people have to say about that and what we need to know and what we can do as laundromat owners to be prepared for, you know, what’s happening now and what may be coming down the pipeline.

00;00;26;13 – 00;00;52;13
Jordan
So we’ll talk a little bit about that here in a little bit. And man, I genuinely believe that there is big opportunity when transitions happen, when changes occur in the world and the economy, and changes are happening all the time right now. So as business owners, as investors, as just people we need to be looking for those opportunities.

00;00;52;13 – 00;01;16;16
Jordan
And we’re going to talk about that today. In fact, we’re just starting the discussion. That’s what I hope at least today. And I’m going to head over to launch my resource dot com slash forums, go to the Laundromat forum, and I’m going to start a discussion on all things resource motion related, which is what we’re going to be talking about today, because by no means am I an authority on this or anything.

00;01;16;16 – 00;01;39;16
Jordan
I just want to put some stuff on your radar, get the gears turning, and hopefully facilitate a conversation that we can have so that we can all, you know, come out of this thing better than than before. If we go down that path and some say that we’re already, you know, down the path a little bit so it depends on your take on it.

00;01;39;16 – 00;02;07;12
Jordan
But man, I think that, you know, I’ve been saying forever we’re all better together. Right? And so having these discussions, navigating this, you know, together is key. It’s crucial. It’s crucial. OK, so with that said, I want to jump in to our fast lane for today. Fast lane is, man, this is how a laundromat resource can help put you on the fast lane towards financial freedom through laundromat ownership.

00;02;07;12 – 00;02;31;29
Jordan
Whether you’re looking to buy your first one or you’re looking to buy your 10th one. You know, hopefully Laundromat resource has something for you to help you take the next step, take your business to the next level. Today’s fast lane tip is we have a new partner that I’m very, very excited about. Huge welcome to them as an official partner, which is sense and sense.

00;02;31;29 – 00;02;58;20
Jordan
You may have seen them on a podcast episode in the past with Alex Schakowsky. You know, I’ve done a couple of webinars with them, so you may have seen them around, heard about them, heard them around. Well, they’ve just they’ve decided to jump on board as a an official partner over here. And what that means for you is they are offering $500 off your first year of sense as a pro member.

00;02;58;20 – 00;03;22;10
Jordan
So if you go over to a lot of my resources dot com slash pro join the pro community or if you’re already a part of the pro community, this is applicable to you as well. You can join over there. And as of right now the recording of this the the $500 off exceeds by quite a bit the cost of joining the pro community over there.

00;03;22;10 – 00;03;49;11
Jordan
So it’s just a net gain and it’s only one of the partnerships that we have over there. We have others you can go check them out ultimate resource dot com slash pro. I think all of them as of right now exceed the value of the pro community the cost to join. So if any one of those appeals to you, it just kind of makes sense, you know, and in addition to that, you get access to all the other pro perks which you can check out again a lot of that resource dot com slash pro.

00;03;49;26 – 00;04;17;04
Jordan
All right huge welcome to so excited to have you guys on board really really appreciate you guys offering that to the pro community. And for those of you looking to, you know, to add a business in a box, a software solution to your to your current business or if you’re coming into the business to your new business with us to help you run your self-service laundry or wash drive fold your pickup in the livery sense.

00;04;17;04 – 00;04;41;06
Jordan
Is that business in a box that’s going to integrate all that stuff for you and make it faster, simpler, easier, better for you to serve your community. All right. Awesome. Welcome, you guys. The other I have another little pro community fast lane tip. But we’re going to talk about that here in a little bit. So I want to jump into this episode here.

00;04;42;04 – 00;05;08;18
Jordan
What we’re talking about today and what we’re talking about is a recession. I mean, I see it all over the place now. I pretty much actively avoid the news at all costs, but I still see talks of recession all over the place, seeing them online, seen them on Reddit. I’m at the gym and they have all the TVs up above the treadmill where I’m running and you know, most of those have some sort of talk about recession.

00;05;08;18 – 00;05;36;22
Jordan
I’m seeing big CEOs have, you know, quotes and thoughts about whether we’re heading towards a recession or maybe we’re already in a recession. And I’m not really going to debate whether I think we’re heading towards a recession or not. I think that’s kind of irrelevant. But my what I want to focus on today is if we are how do we make sure that we’re prepared as laundromat owners, as business owners, as investors?

00;05;37;01 – 00;05;59;04
Jordan
How do we make sure that we’re prepared? But, you know, just to kind of give you a little bit of you know, it’s just so you know, you know, I’m not just blowing smoke over here. You know, Elon Musk says the US has already entered a recession things are about to get worse. That’s what Elon Musk says. I’ll link to the article where I found this.

00;05;59;22 – 00;06;31;03
Jordan
These quotes here, Charles Scharf. Oh, yeah. The Wells Fargo CEO says a downturn is going to be hard to avoid. You know, a David David sell it. My handwriting is horrible. David Solomon of Goldman Sachs CEO says there’s a possible chance I can’t even read this. So there’s a reasonable chance at some point that we have a recession or a very, very slow, sluggish growth.

00;06;31;09 – 00;06;55;23
Jordan
So that’s the CEO of Goldman Sachs and Lloyd Blankfein of Goldman Sachs, who’s the senior chairman, says the US economy is currently at a very, very high risk of recession. So CEO kind of downplaying it. The chairman of Goldman Sachs, you know, is like, hey, it’s happening. This is there’s a huge chance of this, right? So and there’s other CEOs who think maybe not so much or some that think things are just going to level.

00;06;56;02 – 00;07;10;03
Jordan
So there’s different opinions all over the map. And again, there’s more of these kind of quotes on the article all link to in the show notes. But you can find it on my resource dot com slash show. 97, by the way. But the point is, a lot of people are thinking, hey, we might be headed towards a recession.

00;07;10;03 – 00;07;41;08
Jordan
And there’s a lot of interesting things happening that kind of point to that. Obviously, you know, inflation is kind of pointing to that and all of that. And real quick, since I just mentioned inflation, I want to make a quick point of why you have to own your own business, OK? You have to own your own business. If you’re listening to this right now and you don’t own a laundromat yet or you don’t own your own business, you have got to find a way to to own your own business.

00;07;41;08 – 00;08;16;07
Jordan
And I want to just take a quote from the Fed, the Fed chair, Jerome Powell, that I read on a US news article, and I’ll link to that also. And I read it and I was like, holy cow, like this. It just it seemed so crazy to me. I guess it’s kind of subtle. But here’s what here’s what Jerome Powell had to say about how they want to help curb inflation right now, which is really high as of the recording of this.

00;08;16;20 – 00;08;43;00
Jordan
I think the reported is like eight point something but all the things we’re spending all our money on are 20% plus. And so we’re seeing crazy inflation right now. And here’s here’s Jerome Powells plan on how to curb inflation. According to this article on US News says Powell said that the Fed, the Fed’s goal was to raise rates to cool borrowing and spending so that companies would reduce their huge number of job openings.

00;08;43;00 – 00;09;15;21
Jordan
OK, so you know, we all we all probably know, you know, there the Fed’s main tool is being able to manipulate rates. Right. And so they’re raising rates to hopefully try to cool off inflation. Here’s how they anticipate or hope at least, that this will play out and how their increase in rates will will help curb inflation. So in turn, you know, so they’re going to raise rates so that it will reduce the huge number of job openings.

00;09;15;21 – 00;09;40;19
Jordan
In turn, Powell hopes companies won’t have to raise pay as much, thereby easing inflation pressures without significant job losses or an outright recession. OK, so the plan is to raise rates to reduce job openings so that companies don’t have to pay as much. And for me, I have sort of a mathematical mind a mathematical background as a physics major.

00;09;40;19 – 00;10;10;01
Jordan
Right. And I’m looking at this transitive property, right? Inflation is up and wages are up. Right. And you know, and so they have this sort of a relationship between inflation to the the the rates that the Fed are going to raise. Right. And so there’s an inverse relationship or that’s the idea at least. So if the if the rates go up, inflation hopefully will go down.

00;10;10;01 – 00;10;36;12
Jordan
That’s their goal. Right. But the way that it’s going to do it is so rates go up, which means less job openings which means companies don’t have to pay as much as a more competitive market. Right. For companies to be able to hire. So what I’m seeing in this statement is a blatant sort of admission that, you know, your wages, they don’t matter.

00;10;36;12 – 00;11;04;10
Jordan
They’re not ever going to help you get ahead in life. Right. Because wages are directly tied to inflation. As inflation goes up, your wages are going to go up probably at the same rate, actually probably at a slower rate. As you know, a lot of people feel like at least. Right. And probably not going to exceed inflation. And so, you know, what they’re hoping is that inflation will go down so that wages will stop going up.

00;11;04;10 – 00;11;37;29
Jordan
Right. And there’s this kind of one to one or ish relationship between inflation and in wages. And so if your goal is to escape the rat race, if your goal is to get ahead in life, if you have ambitions to have more in life, you have got to own your own business because working a nine to five I mean, Jerome Powell just said in this in this game plan here, working your nine to five won’t help you get ahead in in life.

00;11;37;29 – 00;12;21;08
Jordan
Right. And now, obviously, there are things that you can do, right? Spend a lot less than you make. Save it, invest it, and you can get ahead that way. But now you are investing, right? Investing business kind of that cash flow quadrant, right? You got to be a business owner or an investor in order to get ahead in life because if you’re self-employed or if you’re an employee, you’re you’re just not getting the whole plan from the Fed is to make sure that you guys us on the you know, on the witness side, the left side of the cash flow quadrant, the employees and the self-employed make less money so that inflation will come down.

00;12;21;12 – 00;12;42;09
Jordan
OK, so all that to say, I just wanted to kind of point that out. Like it’s so important that you get your own business, whether that’s a laundromat or you build your own agency or you just have kind of a side hustle or you’re investing, you’re saving your money, you’re vesting it into, you know, stocks, real estate, whatever, but you’re investing your money.

00;12;42;14 – 00;13;00;16
Jordan
You’ve got to be doing that if you want to get ahead in life. So quick aside, but I just want to I just read that quote and I was like, holy cow. Like, that’s that’s pretty crazy that, you know, that quote. And I probably didn’t explain it super well, but, you know, go check out the article. I’ll link it again.

00;13;01;01 – 00;13;27;15
Jordan
You know, in, in the show notes, a lot of my resource that comps I show 97 it go read that again and also link to cash flow quadrant in case you haven’t read it. I really like that book it’s a Robert Kiyosaki book and I think it’s great. OK so let’s talk about let’s bag it up OK we’re not there’s not inflation necessarily talk I want to talk recession because again, there’s a lot of buzz going around about recession and what does that mean for us?

00;13;27;15 – 00;13;54;03
Jordan
And, you know, and then what do we do about it? OK, now I think during a recession, you know, as I look back, I saw, you know, 2008, you know, even 20, 20 briefly a little bit before it kind of jump back up and skyrocketed again. But, you know, you see you see people kind of losing a lot and you see other people kind of making a lot during recessions.

00;13;54;03 – 00;14;17;05
Jordan
Right. And so the question becomes, if we’re heading to recession, I’m not and again, I’m not arguing whether we will or not, but if we are, how can we add a zero to our net worth or to our income during that recession? Right. We don’t want to be on the side. That’s not prepared. That’s going to lose our businesses, lose our fortune.

00;14;17;11 – 00;14;41;09
Jordan
We want to be on the side of, you know, people who are coming out the other end in much better shape, who are picking up assets, who are strengthening their business. Right. Gaining market share. Those types of things. Right. So so, you know, if this is a time where we can add a zero to our net worth, add a zero to our income, you know, what?

00;14;41;17 – 00;15;02;14
Jordan
What do we need to know and what do we need to do as business owner? OK, so let’s talk about just briefly, I’m just going to bring up this is not going to be an exhaustive list, but I want to talk a little bit about some of the implications if a recession were to happen or if a recession is happening right now, what are some of the implications as a business owners for us?

00;15;02;24 – 00;15;24;03
Jordan
Right. So now, obviously, if there’s a recession, there’s less money going around. So people are going to cut their spending a little more. So that just means there’s going to be less to go around. Now, laundromats, you know, have long been touted as recession proof business. I’m not sure I would go so far as to say that, but I would go so far as to say recession resistant.

00;15;24;13 – 00;15;47;07
Jordan
Right. So we, we saw in 20, 20 that laundromats are an essential business and it’s not because somebody gave us that title. It’s not because somebody went lobbied for us to be deemed an essential business. It’s because we’re essential Rose because laundromats, we people need clean clothes, you know, no matter kind of almost no matter what’s going on in the world.

00;15;47;07 – 00;16;09;27
Jordan
Right. You need clean clothes, right? So it is essential and it’s not because of any designation we were given. It’s just the nature of the business. OK, which is awesome. Right. And that’s a huge perk and a huge reason why I think laundromats are actually going to. Yeah, they’re poised to become more valuable if we head towards recession because of that.

00;16;10;17 – 00;16;41;11
Jordan
OK, so that’s one thing is that people are cutting spending. However, we have this advantage of being essential here. Now, that doesn’t mean that our revenue might drop still. Right. And a lot of us saw that in 20, 20 you know as people things shut down and people weren’t spending as much for a little while business drop you know ten, 20, 40% for some of us right.

00;16;41;11 – 00;17;02;03
Jordan
But we stayed open and and all that so you know still a rhythmic business still an essential business people still need to do laundry. However, they may do less laundry or they may try to shove more laundry into those 40 pounders that really should be for the £80. Right. You know what I’m talking about? If you in a laundromat, right?

00;17;02;03 – 00;17;36;20
Jordan
So trying to pinch pennies however they can, maybe they’ll hang dry more often, whatever. Right? So we may see a slight drop in revenue. However, you know, business should still be pretty rhythmic, pretty consistent there. OK, so that’s one implication one positive. And you know, Jerome Powell kind of alluded to this, but as business owners, as people who employ other people, you know, one of the big complaints over the last couple of years for businesses in general, laundromat specifically, because that’s all we really care about.

00;17;36;20 – 00;18;06;11
Jordan
Right? But one of the big complaints is finding good help. It’s been difficult to find employees who are willing to work for what we can pay them right. And so as a recession, you know, as a recession might sink in, that creates more more demand for jobs. And that allows us as business owners to, number one, be a little more picky.

00;18;06;19 – 00;18;47;12
Jordan
Number to be a little more economical in how much we have to pay or what we have to offer to people. But even more importantly, in the way that I would encourage us to think about things is, you know, is this a you know, is this an opportunity for us to upgrade our workforce? Right. And that’s what we should be, you know, taking a look at, in my estimation of things, you know, as if a recession comes this way and all of a sudden there’s more people who are interested in the jobs that we have to offer is to go through and evaluate our current workforce and say, hey, is there anybody who’s underperforming me?

00;18;47;12 – 00;19;14;19
Jordan
And obviously, you need to go through, you know, due diligence and allow them, you know, communicate with an employee what they need to do to get better, all those things, you know, lead them well. However, if there’s somebody that you just had to have because you couldn’t find anybody else, you needed a warm body. But they’re really not performing this could be an opportunity for you to say, Hey, you really need to step up your game or I’m going to replace you because I got I got some people lined up now, right?

00;19;14;19 – 00;19;39;12
Jordan
So you might be able to upgrade your workforce during a recession if that comes. OK, all right. Number three is kind of interesting. So a lot of times what happens in a recession is that income’s revenues, revenues drop for for businesses. Right. And so what we do a lot of times as and rightfully so, is look for ways to cut costs.

00;19;39;12 – 00;20;04;05
Jordan
So what I have found is that one of the places that gets cut first in terms of, you know, cutting costs is marketing budgets. Right. And I see that with laundromats. I see that all over the place. Right. So one of the things that gets cut is marketing budgets. Now, this is where it can be a little interesting, right?

00;20;04;05 – 00;20;34;05
Jordan
So marketing ideally should be more of an investment than an expense. And and ideally, you every dollar you spend on marketing should bring you back more than $1. Right. That’s the goal, by and large, is for your marketing dollars to be invested to be worth more by driving, you know, more customers your way or upselling to new services or whatever the case may be.

00;20;34;14 – 00;21;09;10
Jordan
Right. And so as you know, if a recession should happen and we’re cutting costs, I think we’ll see a lot of our competitors cut marketing costs early and first. And what that allows us to do as business owners is to say, no, I’m going to look at my marketing as an investment and I’m not going to cut that cost, or maybe I’m going to invest even more into marketing than before, because it can really be an opportunity to gain market share.

00;21;09;19 – 00;21;33;26
Jordan
And I think this could be a really big opportunity if you’re offering a wash drive full service or an especially a pickup and delivery service. Right. That can be a good time to say, I’m going to invest those dollars I’m going to find other ways to cut costs, but I’m going to invest those dollars into marketing instead of cutting the marketing budget.

00;21;33;26 – 00;21;58;11
Jordan
Now, which is really interesting, couple of weeks ago, I had to take a last minute trip to Belize for like a week or so. And I was driving around in Belize and there was this big billboard, kind of this little podunk town in Belize on the coast. And, you know, there’s this huge billboard and it basically said, you know, the economy’s doing what?

00;21;58;11 – 00;22;36;19
Jordan
And you’re cutting your marketing budget. Right? And it was like, hey, you know, now is not the time to cut marketing, you know, in this little town in Belize, huge billboard, huge billboard. So I was like, man, that’s you know, that’s pretty funny that I see that here because I think that that’s just generally what I see happen in a lot of times is that people will cut their marketing budgets early or even first at a time where if you invested more money or at least continue to invest your money in marketing, it actually could pay bigger dividends than if things are actually booming at that time.

00;22;36;25 – 00;23;06;16
Jordan
OK, so competitor marketing budgets might go down, which could create an opportunity for you if you can continue to invest in marketing or even ramp up your investment in marketing. OK, number four, another implication of a recession and this is kind of more an implication of inflation. And in the early side of a recession is that you know, borrowing costs rise.

00;23;06;22 – 00;23;25;20
Jordan
Right? And a lot of times the way we get out of a recession is that borrowing costs actually drop. But we’re seeing right now, I mean, this is June 20, 22, and we’re seeing right now, you know, interest rates that we haven’t seen for a very, very long time. Right. We’re seeing borrowing costs rise pretty dramatically in there.

00;23;25;25 – 00;23;55;05
Jordan
And they’re, you know, continuing to rise pretty rapidly, much more rapidly than we’ve seen in in decades, probably. And, you know, that’s more a result of the inflation increasing and less a result of recession. But what I see in this current environment is inflation going up. So borrowing costs are going up to try to, you know, again, hedge that inflation and knock it back down.

00;23;56;09 – 00;24;20;05
Jordan
And so we’re seeing borrowing costs going up now, and you’ll continue to see that if we kind of merge into recession will continue to see that going forward, especially early on in the recession. And then we may see rates drop at that point. I don’t know. I’m just speculating right now. But that is, you know, what I could see happening pretty easy.

00;24;20;11 – 00;24;56;28
Jordan
So you know, one of the implications of our current environment includes increasing inflation in the early parts of recession is that borrowing costs rise, right? So things become more expensive. So if you’re looking to borrow money to buy a laundromat, that’s going to become more expensive, which means they put certain laundromats out of your price range or it may, you know, just drive up your your monthly expenses and so your cash flowing less if you’re looking to retool or add new machines, the cost of that’s going to be, you know, continue to increase.

00;24;56;28 – 00;25;23;10
Jordan
And so again, driving down your cash flow for your business. So something to keep in mind there. Another thing that we might see is tighter margins. You know, and tighter margins in our in our business. Now, one of the huge perks of laundromats is that we have we have pretty good margins. I mean we’re looking at 20 to 30% margins unleveraged a lot of times.

00;25;23;26 – 00;25;58;08
Jordan
And that’s pretty good. There’s not a lot of, you know, investments or businesses that require so little not saying nothing because it does require something to run a business. However, relatively speaking, you know, little time investment depending on how you run your business, but you know, you just don’t see that very often. OK, so but we may see margins, you know, start to drop as cash flow drops, as revenues drop, you know, things become more expensive.

00;25;58;08 – 00;26;17;07
Jordan
People are spending a little less utility prices continue to increase like they’ve been doing, you know, all that rents continuing to go up, all that stuff can squeeze our margins a little bit. So just something to be prepared for and to compensate for, you know, in terms of, you know, how we’re pricing things, how we’re positioning ourselves in the market.

00;26;18;02 – 00;26;41;28
Jordan
The other kind of thing that I wanted to hit on the last kind of implication. And then I want to talk about how do we prepare going forward, you know, in case we go down this road the last kind of thing I wanted to hit on is that, you know, during a recession, more assets are sold at a discount right the easiest place to see that is in the stock market right now.

00;26;41;28 – 00;27;13;29
Jordan
It’s difficult to difficult to buy as you’re watching, you know, stocks plummet or crypto plummet or you know, we haven’t hit this yet, but if real estate starts to plummet, it’s difficult to to buy those as you’re watching the prices go down. However, if you believe that those prices are going to come back up and rebound at some point, you know, then these assets can be sold at a discount, you know, during a recession.

00;27;13;29 – 00;27;41;00
Jordan
And, you know, people in 20, ten, 11, 12, who bought real estate or who bought stocks at those point in time, you know, have been booming ever since then, you know, except for a couple of little bumps have been boom and pretty good, you know, since then. And so what they’re able to do is buy low and then, you know, wait for things to kind of rebound so if you got time on your side you may be able to find assets at a discount.

00;27;41;06 – 00;28;08;16
Jordan
OK all those kind of implications. And again, not saying that we’re going enter into a recession necessarily I’m no expert in this by any means. However, I do want to talk about, OK, if we do go down this path and again, this is not going to be an exhaustive list, but if we do end up going down the recession path or, you know, even a stagnant path, what can we as business owners be doing to prepare for it?

00;28;08;27 – 00;28;40;03
Jordan
OK, I wrote down a few ideas here and I wanted to throw them out there. But again, I want the discussion to continue because I am not the expert. This is not an exhaustive list. There are a lot of things going on in the world in the economy. You know, social politically, you know, there’s just a ton going on and it’s a lot to wrap your head around and then to bring that down into how does that affect us as laundromat owners is crazy and it’s very difficult to do.

00;28;40;03 – 00;29;30;12
Jordan
Right. So that’s what I love to have a discussion about this on the forums. A lot about resource outcomes forums. If you’re interested in that discussion. So with that said, here’s a few things that I think that we can do to prepare. Number one is lean out OK, lean out your business. I’ve been seeing a few more articles about, you know, businesses, big corporations, you know, laying people off, cutting costs, you know, those types of things where, you know, I’m always looking at what are the big corporations doing because, you know, they invest billions, millions, whatever, hundreds of thousands of dollars into you know, into trying to figure out how all this stuff is working

00;29;30;12 – 00;29;57;13
Jordan
and what the future is going to be like so they can position themselves well well, guess what? I don’t have hundreds of thousands, millions or billions of dollars to invest in that myself. So one of the things I like to do is watch these big corporations and see what they’re doing, that they’re always going to be right. However, you know, as I’m watching layoffs start happening and some of these big companies cost being cut, I’ve seen businesses lean out.

00;29;57;13 – 00;30;20;28
Jordan
And I think now is a good time for us as laundromat owners to start to lean out. You know, lean out our businesses, cut costs that we don’t, you know, that we don’t need that aren’t going to move your business forward. I think that’s a big key. They’re cut costs that aren’t moving your business forward. Right. So, you know, I talked about marketing early.

00;30;20;28 – 00;30;43;11
Jordan
Well, now’s a good time to get a whole, you know, get a grip on how is my marketing working? Is it moving my business forward? If not, do we need to cut costs there or do I need to find other ways of doing my marketing to improve my business? Right. But leaning out right now and cutting back expenses is, I think, a prudent thing to do.

00;30;43;11 – 00;31;29;18
Jordan
A wise thing to do. And, you know, depending on your business, that could look like a whole lot of different things. Right. It could be, you know, cutting down it. You know, you’re you’re you’re losing asset. Oh, your your TV bill, your cable bill and stuff. Like atmosphere TV, which, by the way, if you use a link in the show notes or in the description down below, you can get Atmosphere TV for free laying out those expenses you know, if you need to, you know, trim down your your staff and streamline that a little bit more or whatever the case may be, you know, leaning down, cutting expenses in and running lean during this time.

00;31;29;18 – 00;31;55;21
Jordan
Now, number two, another way to prepare is, hey, you know what? Cash flow is king. Right? And we see this a lot in real estate investing where, you know, a lot of people who did OK during the 28,009 downturn did OK because their their real estate cash flowed and yes, you know they lost 2030 40% equity in their in their real estate.

00;31;55;21 – 00;32;23;28
Jordan
But it didn’t matter that much because it cash flowed in as long as they made the payments then they didn’t have to sell it. It didn’t really hurt them. And so right now kind of piggybacking on that leaning out is focus on cash flow looking for ways to solidify and even increase your cash flow in your business because you’re only going to get hurt if you know in your in your business during a recession.

00;32;23;28 – 00;32;52;27
Jordan
If, number one, your cash flow dips below what you need it to be or number two, you need to sell your business at the bottom and you need to sell quickly. Right. And a lot of times we can avoid that or ride that out if we have solid cash flow. OK, so looking for ways to solidify your cash flow and even increase your cash flow during this time so that if a recession happens, you’re you’re fine.

00;32;52;27 – 00;33;08;07
Jordan
You can ride it out because your cash flows great. OK, the other number three, I guess is have cash on hand. You know, I was just kind of looking around. I think Buffett’s got cash on hand actually started buying up a lot this year.

00;33;10;09 – 00;33;38;19
Jordan
20, 22, I think Muscat cash on hand. You know, again, looking at the big guys and what they’re doing, having cash on hand can do two things for you during a recession. Number one, it can help you ride out the lean times. And if you’ve got, you know, a period of time where there’s not enough cash flow to keep your business afloat, you have cash on hand to, to help you survive.

00;33;38;19 – 00;33;59;27
Jordan
Through the lean times until things kind of rebound. Right. So that’s one it’s sort of an insurance policy, right? It’s hard to hold a whole bunch of cash when inflation’s going crazy because you lose value there. However, man, you know, having that cash on hand could be a big deal to help you through lean times. But number two, also is that having cash on hand?

00;33;59;27 – 00;34;34;05
Jordan
You know, I mentioned already a lot of times assets go on sale at a discount when you you know, when you’re in a recession and so having cash on hand can help you pounce on opportunities when they come your way. You know, if your competitor down the road needs to sell their laundromat or a piece of real estate comes up or, you know, whatever, you want to throw it into crypto because you think it’s coming back or whatever, you know, you have cash to you, you know, either help you through the lean times and or pounce on opportunities when they come your way.

00;34;35;01 – 00;35;04;17
Jordan
And that is a huge way that people can make a fortune during recessionary times is having that cash and being able to scoop up those assets at a discount and, you know, and holding those until things rebound. So number four is having long term debt is awesome, especially during inflationary times. You know, and I’m talking, you know, good debt, not bad debt.

00;35;04;17 – 00;35;29;04
Jordan
Obviously, I’m talking about debt that you utilize to acquire assets where that buying a laundromat, buying equipment, buying real estate, whatever having long term debt is awesome. And the actually the higher inflation is, the better it is to have long term debt because it makes it easier and easier to pay that debt off as inflation goes up. However, during a recession, you don’t want to be over leveraged.

00;35;29;10 – 00;36;01;07
Jordan
OK, so what I would be, you know, recommending if you’re trying to prepare for a potential recession is use long term debt. It’s awesome. Can help you acquire assets that you can acquire. Otherwise however, don’t over leverage yourself because that’s a good way to get yourself into trouble. You know, during recessionary times, if your revenue falls too low and you can’t keep up with your payments or, you know, whatever the case may be, don’t over leverage.

00;36;01;07 – 00;36;33;25
Jordan
You don’t want to be overleveraged during a recession. OK, so, you know, whatever whatever that means for you, you know, take a look at your risk tolerance. Take a look at, you know, how much you’re leveraged and assess from that point, OK? Number five, you know, preparing for a recession is, you know, and this is like right now and I would say this is obviously this is any time, but especially going into recession, now is the time to level up your operations and level up your customer experience.

00;36;34;14 – 00;37;14;03
Jordan
OK, if we go into a recession or if we don’t go into a recession, leveling up your operations and leveling up your customer service, your customer experience is only going to help you and I think it helps you exponentially more in recessionary times. Right. Adding more value, offering your customers more even if that’s just to smile and help, you know, hauling laundry in from the car or, you know, whatever the case may be a little touch on your wash drive, fold, order or your pickup delivery or whatever the case may be.

00;37;14;18 – 00;37;49;14
Jordan
You know, you you want to level up your customer service and you want to level up your operations again, being more efficient, you know, that way, you know, you’re you’re operating at full efficiency, giving yourself the best opportunity to succeed. And that’s whether we end up going recession, recession or not. So you know, leveling up that customer experience in operations, critical, critical time, especially going into a recession if we are OK.

00;37;49;14 – 00;38;15;09
Jordan
Number six, number six, you know, I was thinking a lot about this and you know, I’ve mentioned already a couple of times, man, this is you know, this is just complex. We’ve got inflation and doing crazy things and there’s different amounts of, you know, increases in different things. Natural gas is like through the roof. And you know, gasoline is up there, too, and food costs are going up.

00;38;15;09 – 00;38;39;13
Jordan
And, you know, I’ve been hearing more and more that food costs actually are going to go up a lot more even here pretty soon, potentially. And, you know, all this stuff is, you know, is going on right now. And then the Fed is trying to, you know, increase rates to, you know, to curb that inflation. And, you know, there’s wars going on, there’s famines going on.

00;38;39;13 – 00;39;17;22
Jordan
There’s natural disasters happening. There’s like stuff going on all over the place. There’s local laws being developed. There’s national laws being developed, you know, things are are insane. It’s a lot to kind of juggle and keep in mind and figure out how what does that mean for us as laundromat owners. Right. And so as I was thinking about how to best prepare for a recession, I think one of the best things that we can do is be a part of a community that is thinking about this stuff with us.

00;39;18;01 – 00;39;39;12
Jordan
You know, both were, you know, monitoring changes together. Hey, you know, did you guys see this? What do you think about this article? What do you think about this headline? You know, what do you think about this new law? You know, whatever monitoring changes but also sharing best practices. Right. And that’s a huge part of the podcast. Why do the podcasts so that we can share best practices together.

00;39;40;03 – 00;40;16;22
Jordan
But, you know, being a part of a community and being able to navigate especially turbulent times but even not even just regular I think regular times are normally turbulent anyways, right? As a business owner and an investor. Right. And so having a community that can help us navigate that is huge. It’s huge. Right. And you know, for us, just as a confession, I, I have tended to operate more as a lone wolf on a lot of my business, especially early on.

00;40;16;22 – 00;40;42;13
Jordan
I’ve, I did a lot of this stuff myself and tried to learn a lot of stuff myself. And, you know, more and more and especially as I started learning about resources and I saw the power of having strong community, you know, more and more I have I’ve seen just the power of that community. And I think during these big transitionary times, times that are critical that we’re making good decisions.

00;40;42;13 – 00;41;04;19
Jordan
Right. Again, in the recession, a lot of people lose their wealth and a lot of people gain wealth. And we want to obviously be on the gain well side. Well, our chances of ending up better off, you know, no matter what the economy does, grows exponentially. I believe if we’re in a like minded community who, you know, is helping each other.

00;41;04;23 – 00;41;34;26
Jordan
Right. OK, so all that to say join a community. Right. And obviously, I would love, love, love for you to join the laundromat resource community. Right. We have the free community and we have the pro community. And one of the things that that I have decided to kind of fast track because this was a plan for fall. But I want to start it now is is doing some more community based stuff for the pro community.

00;41;34;26 – 00;42;03;08
Jordan
Right. And so we’re implementing starting now, we’re implementing, you know, a a pro community way of communicating with each other, with the pro community, with among each other. Right. And so hopefully what I what I’m visioning is more of these discussions about what’s going on, more of these discussions about best practices and resources and all of that. Right.

00;42;03;28 – 00;42;27;10
Jordan
And then also you know, and what that’s going to look like is sort of forum esque, but on a third party platform. Right. And I’ve been kind of kicking it around back and forth. You know, I do. I hosted on a lot of my resources website. I do. I hosted on a private Facebook group, which a lot of people have recommended, however kind of in line with what amount of resource.

00;42;27;10 – 00;42;58;29
Jordan
And I realized this is going to lose some people. But in line with Laundromat resource, I, I am tired of being behind everything, right? Like technologically, you know, in our mindset, all this stuff go back and listen to my podcast episode on the laundromat. Industry needs to grow up, right? Like I’m tired of us being behind the times and there’s so many tools that are better than Facebook groups that are better than, you know, forum on my Web site.

00;42;58;29 – 00;43;29;11
Jordan
And I want to have something that’s convenient and easy. And so we’re going with a third party sort of platform to host, you know, these discussions. But then also I want to do, you know, live, you know, a couple of times a month live video discussions for pro community members where we can start talking about some of the stuff together again, sharing what we see going on and sharing best practices.

00;43;29;11 – 00;43;52;01
Jordan
So all that’s to be said, man, I hope that you join a community again. I would love for it to be, you know, the Laundromat resource community. You can check it out. A Laundromat resource dot com slash join or learn my resource dot com slash pro. You can check those out there. And obviously, I mean, I would love for you to be a part of our community.

00;43;52;22 – 00;44;25;14
Jordan
However, our man, I just think it’s important that you join a community of people who are forward-looking who are, you know, like minded with you so that some other business, a mastermind or business community or whatever, like your success whether you’re just getting started or you’ve been in this industry, you know, forever or somewhere in between, your success going forward is greatly enhanced when you’re in a community of like minded people.

00;44;25;15 – 00;44;52;08
Jordan
So join that community. I think that’s a great way to prepare for a potential recession, but also just enjoy general, you know, good, good business practices to be in a community of like minded people. OK, number seven, the last thing that I want to mention and how to prepare is to look for opportunities as they start to come about, right?

00;44;52;08 – 00;45;09;12
Jordan
If we’re if we’re able to do some of these things to lean out, you know, to have good cash flow, to have cash on hand, you know, all of these things that we just talked about, if we’re able to do those things, that gives us the ability to look for more opportunities. Maybe it’s an opportunity to scoop up another laundromat.

00;45;09;13 – 00;45;41;01
Jordan
Maybe it’s an opportunity to scoop up a location to build another laundromat. Maybe that’s a, you know, a real estate opportunity or a stock opportunity or an investment in a startup opportunity or whatever the case may be. Right? Look for opportunities because during recessions, opportunities present themselves. And it’s the people who are number one looking for them. And number two, have the ability to act on those opportunities that typically come out ahead from a recession.

00;45;41;05 – 00;46;08;15
Jordan
OK, all right. So again, this is just meant to begin a discussion because the discussions are happening all over the place around us. And I haven’t really seen any discussions in our business, in our industry yet about a potential recession. What does that mean for us? And, you know, how do we navigate and how do we prepare for a potential recession?

00;46;08;15 – 00;46;29;08
Jordan
So hopefully this is just, you know, got your creative juices flowing, your mind moving a little bit, thinking about, you know, where things are heading and how you can come out ahead during those times. Go join the discussion. LaundromatResource.com/forums, click on a lot of that forum and also be a link in the show notes.

00;46;29;18 – 00;47;01;25
Jordan
All of my resources dot com slash 97 or in the description if you’re on YouTube down below and hey you know, if if you’re ready to go and you know you’re looking for a community to join to help you find that financial freedom and if it’s through laundromat ownership you know consider joining the community a lot of our resources dot com slash pro and you know enjoy all the perks we have over there including the library of knowledge you know all of our partnerships, including the brand new partnership.

00;47;01;25 – 00;47;24;04
Jordan
We have a sense you know the new community that we’re just launching and you know and more so go check that out over there love to have you on board very very excited about the opportunities that may be presenting themselves to us kind of going forward, whether we head towards recession or not. There are always opportunities. Keep your eyes open.

00;47;24;04 – 00;47;44;01
Jordan
And I think a lot of these things that we talked about today, you know if not all of them are you know, just good practices whether we’re heading towards recession or not. All right. All right. Thanks, guys. Appreciate you. And looking forward to being in the community with more of you. And for the rest of you guys, you’re still you’re still a family.

00;47;44;01 – 00;48;00;21
Jordan
You’re still a community here. So, man, looking forward to seeing Iran on the podcast. On YouTube channel, you know, in the forums in the pro community, at a webinar, whatever the case may be. Love, love, love seeing you guys around. All right. Syria next week. Peace.