WEBVTT 1 00:00:00.000 --> 00:00:02.480 One of the nice reminders, just depending on what side of the coin you're on, 2 00:00:02.480 --> 00:00:06.960 to realize that it's not your fault if you're down, and it's also not your fault if you're up. 3 00:00:06.960 --> 00:00:09.920 Welcome to the Jim Secrets Podcast, where you talk about how to get more customers, 4 00:00:09.920 --> 00:00:12.320 how to make more per customer, and how to keep them longer. 5 00:00:12.320 --> 00:00:15.760 And the many failures and lessons that we have learned along the way. 6 00:00:15.760 --> 00:00:17.600 I hope you enjoy and subscribe. 7 00:00:20.240 --> 00:00:25.600 Good morning, everyone. Happy Tuesday. I wanted to make a quick video for you guys 8 00:00:25.760 --> 00:00:32.080 on winning in a recession. And Layla and I've been spending a lot of time basically looking at 9 00:00:32.080 --> 00:00:35.920 what companies did during the last recession because history a lot of times really can teach her. 10 00:00:35.920 --> 00:00:40.960 Now it's the same as this recession now that we're in or about to go into. 11 00:00:41.600 --> 00:00:46.880 No, it's not, but there's definitely some lessons that we're taking from this that I figured I'd 12 00:00:46.880 --> 00:00:53.360 share. One of them is kind of defining what winning even means. And so, in a recession, 13 00:00:53.920 --> 00:00:59.920 in this weird recession, there's been basically a reshuffling of the deck of demand overnight. 14 00:00:59.920 --> 00:01:04.560 And everyone was dealt with a new set of cards, right? And some guys are experiencing overwhelming 15 00:01:04.560 --> 00:01:13.040 growth to no effort of their own. And others are getting crushed again to no real effort on their 16 00:01:13.040 --> 00:01:16.400 own. And so one of the nice reminders, just depending on what side of the coin you're on, 17 00:01:17.040 --> 00:01:21.040 to realize that it's not your fault if you're down, and it's also not your fault if you're up. 18 00:01:21.760 --> 00:01:25.520 So it's because there was any smart maneuver. It's just because the debt was redeld. 19 00:01:25.520 --> 00:01:30.000 Now, that being said, if you look at some of the companies that did really well, 20 00:01:31.840 --> 00:01:37.440 a lot of them did a couple, a lot of things that were similar. One is that they eliminated more costs 21 00:01:38.240 --> 00:01:42.080 than they were comfortable with earlier on so that they could conserve cash flow. 22 00:01:42.080 --> 00:01:45.760 All right, you look at GE, some of the companies that did well in the last recession, they're not 23 00:01:45.760 --> 00:01:53.360 going to roll it now, but in the last recession, they came out strong. The next thing was they, 24 00:01:54.080 --> 00:02:00.400 a lot of them ended up cutting prices and increasing the value that they were providing. 25 00:02:00.400 --> 00:02:04.400 And so it's like, wait, how do I cut prices and increase value? That's kind of where the 26 00:02:04.400 --> 00:02:09.120 innovation comes in. It's like, how can we do more for our customers and charge less? 27 00:02:09.760 --> 00:02:13.600 And believe me, I'm the biggest advocate in the world of keeping your prices high. But I'm also 28 00:02:13.600 --> 00:02:21.360 a realist. And so I want to share the things that we're seeing from history that proved effective 29 00:02:22.320 --> 00:02:27.600 in kind of some of these times. One of the things that's also useful is defining what winning looks 30 00:02:27.600 --> 00:02:32.000 like. And I think one of the things that can beat down an entrepreneur more than anything 31 00:02:32.000 --> 00:02:35.920 is expectations. And so in thinking that we're going to 32 00:02:36.640 --> 00:02:44.480 grow during a receiving economy, not as likely, especially for a discretionary expenditure. 33 00:02:44.480 --> 00:02:48.640 As much as we wish to say that we are an essential good, you can see that the government 34 00:02:48.640 --> 00:02:53.120 and the world in that large has said that gyms and fitness in general are not an essential 35 00:02:53.120 --> 00:02:58.720 business. You can put your statements about that out there if you want to, but it's not going 36 00:02:58.720 --> 00:03:05.760 to change anything. And so I think redefining winning is surviving is very useful. So as much 37 00:03:05.760 --> 00:03:12.080 as you may see posts and things of people winning, I will tell you this. And I'm also saying this 38 00:03:12.080 --> 00:03:19.120 half to my community is that the wins are many times isolated or they're in one off circumstances. 39 00:03:19.120 --> 00:03:23.760 Somebody has a single good day of sales. I would not extrapolate that for every single day of the 40 00:03:23.760 --> 00:03:28.400 month. And I'm saying that because I want to hopefully conserve your mental wellbeing. 41 00:03:28.400 --> 00:03:31.680 All right. So that you don't think, wow, I just suck at life. I'm horrible. 42 00:03:32.640 --> 00:03:37.120 Because everyone's going to have a hard time. And so you just need to redefine winning is getting 43 00:03:37.120 --> 00:03:41.520 through. And really, you're going to feel like you're just barely surviving and that is what surviving 44 00:03:41.520 --> 00:03:48.560 feels like. Here's the good news is that for the entrepreneurs and the gym owners that get 45 00:03:48.560 --> 00:03:52.400 through this, there will be an outsized opportunity on the other side, right? Because there's 46 00:03:52.400 --> 00:03:56.960 going to be a consolidation of the market. There's going to be on the back end of this more 47 00:03:57.040 --> 00:04:02.080 demand than there is supply. And gym owners are going to very quickly be able to assume a lot of 48 00:04:02.080 --> 00:04:06.000 market share. And that's where you grow and where you get disproportionate returns and you get 49 00:04:06.000 --> 00:04:11.200 higher profit and higher growth than the rest of the market at large. And if you think about how 50 00:04:11.200 --> 00:04:17.280 this is going to look for a lot of businesses coming out of it, the ones that experience disproportionate 51 00:04:17.280 --> 00:04:21.440 growth will also have a disproportionate decline in growth. You know, totally paper all of a sudden, 52 00:04:21.440 --> 00:04:24.160 if everyone buys lots of toilet paper now, what are they going to do in the future? They're 53 00:04:24.160 --> 00:04:27.600 going to already have enough toilet paper, right? I'm just saying simplistically, but it does 54 00:04:27.600 --> 00:04:34.480 work like that at a macro scale. And one of the things I had a discussion with Mike Arceza 55 00:04:34.480 --> 00:04:39.280 front of mind, he talks to a lot of gyms every day as well. And it's a big network like we do 56 00:04:40.320 --> 00:04:45.520 of gyms. And we were talking about kind of the different entrepreneurial archetypes, different 57 00:04:45.520 --> 00:04:50.160 entrepreneurial psychographs of the people who are kind of in it right now. And I think there's 58 00:04:50.160 --> 00:04:55.760 kind of four categories that if you withdraw a square that people kind of exist in. I think 59 00:04:56.320 --> 00:05:00.800 on the bottom bottom right of that would be somebody who probably shouldn't have been a business 60 00:05:00.800 --> 00:05:07.360 owner. I think those people will get weeded out during the consolidation. And it's just because 61 00:05:07.360 --> 00:05:12.960 there are some people that really, you know, struggled in a good economy, right? They're barely 62 00:05:12.960 --> 00:05:19.440 getting by in a good economy. And when a bad economy comes, it kind of just shows the weaknesses 63 00:05:19.440 --> 00:05:24.400 in their business and even their mindset and their level of commitment to their business. 64 00:05:24.400 --> 00:05:29.280 And that's okay. I mean, business isn't for everyone. And I think that this will create a 65 00:05:29.280 --> 00:05:33.120 gut check for a lot of those people. And they may not make it out. I hope they all do. 66 00:05:33.120 --> 00:05:35.600 I hope no one goes out of business, but I don't think that's reality. 67 00:05:36.560 --> 00:05:42.720 The next category is somebody who underperformed because of talent. And so that's somebody who, 68 00:05:42.720 --> 00:05:47.920 and I've seen them in our community, guys who just get by on talent but don't work super hard. 69 00:05:48.000 --> 00:05:52.960 But I think some people who are in this category may rise to the occasion. So all of a sudden, 70 00:05:52.960 --> 00:05:56.320 when they're backs against the wall, they're going to double down and learn how good of an 71 00:05:56.320 --> 00:06:01.280 entrepreneur they really can be. And I think that's kind of cool because I think a lot of people 72 00:06:01.280 --> 00:06:05.200 will level up during this period of time because pressure makes diamonds. And I think that they 73 00:06:05.200 --> 00:06:09.520 will realize what they are capable of. And they may come out of this much, much stronger than they 74 00:06:09.520 --> 00:06:14.720 were going into it because they realize what they're capable of. And I'm hopeful for anybody who 75 00:06:14.720 --> 00:06:20.000 was struggling before that you were in the former, sorry, latter category instead of the former. 76 00:06:21.200 --> 00:06:24.560 And I hope from a, from a might to standpoint that you adopt that, which is like, 77 00:06:25.520 --> 00:06:30.640 was I really trying as hard as I possibly could have before? Was I really doing a hundred 78 00:06:30.640 --> 00:06:35.120 outbound reach outs every day no matter what? Was I really making sure that I followed my 79 00:06:35.120 --> 00:06:41.360 scripts with the correct tonality on every sales call no matter what? Did I make sure to fall 80 00:06:41.360 --> 00:06:44.640 up with my customers? And if all of this sounds like work, it's because it is. And there's no way 81 00:06:44.640 --> 00:06:49.120 to not work through this. All right. So I'm just like, like, what am I doing? I'm going to try and 82 00:06:49.120 --> 00:06:52.880 provide more value to the gym, where's community? I'm going to be, you guys will find out tomorrow or 83 00:06:52.880 --> 00:06:57.680 later today. But I'm going to be taking all the, you know, daily calls every single day with all the 84 00:06:57.680 --> 00:07:03.440 customers, just something that I haven't done in almost two years. Real quick guys, if you can think 85 00:07:03.440 --> 00:07:08.240 about how you found this podcast, somebody probably tweeted it, told you about it, shared it on 86 00:07:08.240 --> 00:07:12.720 Instagram or something like that. The only way this grows is through word of mouth. And so I 87 00:07:12.720 --> 00:07:17.360 don't run ads. I don't do sponsorships. I don't sell anything. My only ask is that you continue 88 00:07:17.360 --> 00:07:20.880 to pay it forward to whoever showed you or however you found out about this podcast that you do 89 00:07:20.880 --> 00:07:25.360 the exact same thing. So if it was a review, if it was a post, if you do that, it would mean the 90 00:07:25.360 --> 00:07:27.760 world to me and you'll throw some good karma out there for another entrepreneur. 91 00:07:30.080 --> 00:07:36.720 So I'm going to try and provide more value to our community to continue to keep everyone engaged 92 00:07:36.720 --> 00:07:42.480 and hopefully answer questions at a higher level and just get everyone, you know, peace of mind, 93 00:07:42.480 --> 00:07:49.120 et cetera. So those are two of the four archetypes. I think that you have another archetype of 94 00:07:49.120 --> 00:07:55.520 person who's going to just be a winner, right? And winners win. There's the guys who are crushing it 95 00:07:55.520 --> 00:08:00.560 before. And these are the guys who during this transition have lost the fewest members because 96 00:08:00.560 --> 00:08:05.360 they already had strong communities. They ran fairly lean. And if they didn't, they made the correct 97 00:08:05.360 --> 00:08:10.240 entrepreneurial decisions at the right time to conserve cash flow, right? They made the hard 98 00:08:10.240 --> 00:08:15.360 decisions in terms of rent and had the hard conversations with non-essential personnel in order to 99 00:08:15.360 --> 00:08:22.480 keep the ship upright. Those people will be in a position at the end of this to consolidate 100 00:08:22.480 --> 00:08:28.800 market share. And they will be the ones who come out on top and make the most and really are in 101 00:08:28.800 --> 00:08:33.120 a position at that point to truly run a hybrid facility, which is the highest profit model that 102 00:08:33.120 --> 00:08:39.440 I'm aware of, which is why I put it out there eight months ago. There was a fourth category. 103 00:08:41.120 --> 00:08:49.520 I think it's the person who had that eye of the tiger had a successful gem that was somewhat 104 00:08:49.520 --> 00:08:55.120 outsourced, but then it's unwilling to go back in and roll their sleeves up. And I think that that 105 00:08:55.120 --> 00:09:00.400 also would be the type of person who will not make it through. So if you had the four quadrants, 106 00:09:00.400 --> 00:09:06.000 you've got the low performer who's barely hanging on before this, who probably doesn't have the 107 00:09:06.000 --> 00:09:11.520 entrepreneurial character traits, who is usually not adaptable enough, who's not a quick enough 108 00:09:11.520 --> 00:09:17.120 start, who does not pivot, who gets analysis process, once things to be perfect is more security 109 00:09:17.120 --> 00:09:21.120 driven, and just honestly doesn't know what to do and can't lead through crisis. Those people 110 00:09:21.120 --> 00:09:28.000 will probably get weeded out. Second category, people who are highly talented and then will be able 111 00:09:28.000 --> 00:09:32.000 to rise to the occasion and level up as entrepreneurs during this. And I hope that that's most of the 112 00:09:32.000 --> 00:09:37.680 people who are listening, who were not where they wanted to be. Third category is the outright, 113 00:09:37.680 --> 00:09:42.640 the hardcore winners. Those guys will always win, and they will make it through. They might not win 114 00:09:42.640 --> 00:09:48.160 as much during the recession, but then they will get outsized for turns and basically make up 115 00:09:48.800 --> 00:09:53.760 for the wins that they would have had during this period of time in the outsized growth that 116 00:09:53.760 --> 00:09:58.880 happens later. And then the kind of guy who used to be, used to be hungry and is no longer. 117 00:10:00.800 --> 00:10:05.280 One of the things that I wanted to kind of pass on to you that I've been, I've been chewing a lot 118 00:10:05.280 --> 00:10:11.040 on mentally has been really understanding how much market dynamics can affect 119 00:10:12.800 --> 00:10:17.840 an environment. So if you look at investors, there's like an old invest in saying, which is like 120 00:10:18.800 --> 00:10:25.840 a great market with a mediocre entrepreneur will create a great business, a great entrepreneur 121 00:10:25.840 --> 00:10:30.160 in a mediocre market will create a mediocre business. And the whole point there is that 122 00:10:30.800 --> 00:10:36.160 the market is ultimately one of the biggest inciders. And I'm not saying that so that you can be 123 00:10:36.160 --> 00:10:40.000 evict them because you shouldn't be and you should only control the variables. You can control. 124 00:10:40.960 --> 00:10:44.960 But I say this more to say, if you see people who are just crushing it right now in different 125 00:10:44.960 --> 00:10:50.720 adjacent industries or industries that to no effort on their own, because no one had the foresight 126 00:10:50.720 --> 00:10:54.480 to think that there was going to be a flu. And if anyone who says that, they didn't short the US 127 00:10:54.480 --> 00:10:59.360 economy, right? If they did short the US economy, then yes, congrats. But most of them did not. 128 00:10:59.360 --> 00:11:05.120 And so unless they made that move, they didn't know. And they just got a reshuffled deck of cards 129 00:11:05.920 --> 00:11:11.280 where they got they got aces. And so I'm saying this more so so that you don't beat yourself up 130 00:11:11.280 --> 00:11:16.160 about it because like they didn't do anything special. And neither did you do anything wrong. 131 00:11:16.800 --> 00:11:23.280 It's just things happen and we have to adapt. And so winning in a recession will look like for 132 00:11:23.280 --> 00:11:28.160 many people just getting through it. And that's why I think the word that I gave from my community is 133 00:11:28.160 --> 00:11:34.240 just you just got it in dirt. That's what you have to tell yourself. If you used to sell one out 134 00:11:34.240 --> 00:11:40.320 of three in person, you're going to have to level up your sales skills because you were selling one 135 00:11:40.320 --> 00:11:46.800 out of three in person in a good economy, in a flush economy. And overnight, now you're selling in 136 00:11:46.800 --> 00:11:52.240 a less familiar scenario over the phone or over zoom. And you're selling in a bad economy. And so 137 00:11:52.240 --> 00:11:57.200 if one out of three goes to one out of six and your average ticket drops, it becomes harder, right? 138 00:11:57.200 --> 00:12:02.800 And getting five knows out of six is rough emotionally. And so what's going to happen? You're 139 00:12:02.800 --> 00:12:08.240 they're going to crack. You're going to build a character, right? I think there was this. I saw this 140 00:12:08.240 --> 00:12:12.960 meme. I can't remember what was independent of your religious beliefs. It doesn't really matter. But 141 00:12:12.960 --> 00:12:20.560 it was it was like somebody's like me, make me make me patient like Jesus. And then it said life. 142 00:12:20.560 --> 00:12:26.400 It's like our God gives me trials and hardship, right? And so like the things that happen to us 143 00:12:26.400 --> 00:12:30.960 end up growing our character more than anything else does. And I think if we can reframe the things 144 00:12:30.960 --> 00:12:35.920 that we go through as things that are going to grow us, it can help shift our perspective during 145 00:12:35.920 --> 00:12:41.440 times that can be trying, right? Winning doesn't teach us much, but losing sure does. 146 00:12:41.440 --> 00:12:46.640 And so if you can relay that to your team in terms of like we didn't do anything wrong, 147 00:12:46.640 --> 00:12:52.400 the deck was reshuffled overnight and dealt and we were all dealt with hands, right? We didn't like 148 00:12:52.400 --> 00:12:56.960 you didn't fuck up. There was anything big strategic move that wasn't made. It was just like this 149 00:12:56.960 --> 00:13:02.640 is a new reality for now. And I think if you reset that and you can lower your expectation, 150 00:13:03.360 --> 00:13:08.560 that doesn't excuse you from working your absolute face off. Because in order to get through it, 151 00:13:08.560 --> 00:13:12.640 you're going to work your absolute face off. You're going to have to be willing to do that. 152 00:13:12.640 --> 00:13:17.760 And the two categories that ahead of the people who are going to lose, the guy who lost his 153 00:13:17.760 --> 00:13:22.560 hunger to fight has outsourced everything, doesn't want to jump back in and roll up his or her sleeves. 154 00:13:22.560 --> 00:13:26.960 And then the person who was basically not really fit for business to begin with, those are the 155 00:13:26.960 --> 00:13:30.880 two categories that are going to fall off. But you'll notice that income and most of them just 156 00:13:30.880 --> 00:13:35.040 were not willing to put in the work in this period of time, right? The guy who was talented and 157 00:13:35.040 --> 00:13:38.480 wasn't working hard enough and then starts to work and the guy who always worked hard and was a 158 00:13:38.480 --> 00:13:43.680 winner, both of those people make it up, right? So it's redefining what winning looks like, 159 00:13:43.680 --> 00:13:49.200 understanding which of those four you are and then hopefully moving towards like action. 160 00:13:49.200 --> 00:13:54.480 Because the only thing that's going to get you out of it is action alleviates anxiety. 161 00:13:55.440 --> 00:14:02.400 Whenever you're stressed, I can tell you that working, not being busy, but working productively 162 00:14:03.280 --> 00:14:06.160 is the only thing that's going to really help you get through this. And so 163 00:14:07.040 --> 00:14:11.280 so I'll have for you tonight my word of encouragement and dirt. You got this. 164 00:14:12.160 --> 00:14:14.880 I'm going to try and make more of these just to kind of let you know where I'm at. 165 00:14:15.840 --> 00:14:21.760 But I know I just want you to not believe in you. I'm 100% as tied to this as you are. 166 00:14:22.320 --> 00:14:29.200 You've made any any any stress that you feel. I have a lot of employees and I have a lot of payroll 167 00:14:30.080 --> 00:14:34.320 and I have a lot of gym members that I serve and they and I and I feel the weight 168 00:14:34.320 --> 00:14:40.560 of solving the issues for the industry. And I just I'm going to leave you with one one final thing is 169 00:14:42.800 --> 00:14:48.640 don't be fooled by people's posts. I don't be fooled by people's posts. No one like 170 00:14:48.640 --> 00:14:54.080 unlike like no one is going to be absolutely murdering right now independent of industry. 171 00:14:54.080 --> 00:14:57.600 Right like there's going to be outsized to man right like toilet paper and stuff. 172 00:14:57.600 --> 00:15:01.520 But there's there's problems that are there. I got a call from a friend of mine that grew 173 00:15:01.520 --> 00:15:07.200 600% and he was like dude I'm like I can't even staff this like like my entire supply 174 00:15:07.200 --> 00:15:12.640 team is totally screwed because I like it's this is going to kill me in six months right. And so 175 00:15:12.640 --> 00:15:16.080 there's always going to be problems. And so like the grass is always greener and it looks like 176 00:15:16.080 --> 00:15:18.720 it but there's always problems in any business when there's a massive shift. 177 00:15:20.560 --> 00:15:24.720 And so just don't beat yourself up about it. Understand that expectations have to change for 178 00:15:24.720 --> 00:15:29.360 you first. But it doesn't excuse you from not working your ass off because that's where 179 00:15:29.360 --> 00:15:37.520 all I'm going to have to do to get through.