3 Tips to Growing Your Company In a Recession
There's no denying it: Companies get beaten up in a down economy. But sometimes, with the right leadership, a recession just might be good for business.
This week, I moderated a panel at GrowCo in New Orleans. The title of the discussion, Recession Confessions, Stories of Growth and Survival, featured Jessica Coba, CEO of European Wax Center, Brenton Hayden, CEO and founder of Renters Warehouse, and Michael Mothner, CEO of Wpromote. The companies represent a diverse array of industries: a salon franchise, a property management software firm, and search engine marketing start-up. But they share one common thread: they've all grew incredibly fast since 2008, when the economy crashed, and tons of small businesses went bust.
Coba, for instance, explained she and her two brothers grew her family-owned franchise from one location to about 350—in just four years. Mothner, on the other hand, scaled up by about 40 employees from 2008 to 2011. Hayden, from Minnesota, grew his company over 2,000 percent in the last three years—placing his company at #132 on the Inc. 500.
While the independent strategies diverged, there were plenty of themes that emerged from the panel's discussion that united the three businesses. Here's three strategies any company can apply to their business to grow during a recession:
Learn Quickly From Failure
Jessica Coba explained how an initial failure with a product informed her philosophy toward straying too far from the company's core strength: waxing.
"It wasn't our core business," she said. "We just had to move on." And to minimize the cost of failure, Coba, added, failing fast, when possible, is absolutely key.
Hire Right, But Hire Lean
When you expect your company to grow, you'll need to find the right people to support the new infrastructure your firm must support. Panelist Mike Mothner, founder of Wpromote, which is based in Los Angeles, was adamant that finding the right team—people that you can rely on—was one of the core reasons his company was successful.
"Demographically, we skew young," Mothner said, adding that hiring younger workers has the benefit or generally more motivated
"A D player never becomes an A player," he said. "You have to believe in your employees from Day One."
Brenton Hayden, founder of Renters Warehouse, was even more blunt. "If I don't like you from the minute you walk in to interview, I know I'm not going to hire you," he said.
Always Be Looking for Ways to Reduce Costs
When Jessica Coba was learning the salon business from her father, he instilled one piece of advice that would stay with her for her entire career: Always cut out the middle men. She relayed the following story. Once, when ordering cotton swabs from a distributor, where she would have to pay a markup from the wholesale price, her father demanded that she hang up the phone and call Johnson and Johsnon instead. She told him, "But Dad, we can't order directly from them. We can't order enough." But Coba called, and ended up ordering 70,000 units. Years later, the company still has cotton swabs in its inventory.
"We still have a ton of cotton," she said. "But it was a great lesson."