Lecture Notes: Business Opportunities During Economic Downturns

Introduction

• Scary times for employees due to economic downturns.
• Speaker has lived through three downturns with mass layoffs.
• Over 320,000 people have been fired this year.
• Personal anecdote of mass layoffs during the dot-com bubble.
• Current economic situation: high interest rates, potential further cuts, recession looming.
• Economic downturns can create opportunities for wealth if well-positioned.

Service-Based Businesses

Benefits

• Low upfront investment and low skill level needed.
• Little money required to start, high potential for profit.
• Low risk of failure due to minimal upfront costs.
• Beginner-friendly and easy to find clients.

Examples

• Landscaping, Tutoring, Delivery: Easy to start and scale.
• Case Study: Broadway singer offered virtual singing lessons during the pandemic and earned more than her Broadway job.
• Case Study: Former employee scaled delivery business from a single van to multiple semi-trucks by reinvesting earnings.

Tips for Success

• Cost is mainly labor.
• No inventory or big expenses required, low risk of bankruptcy.
• Once scaled, target larger commercial contracts that pay upfront.
• Utilize services like Upwork, guru.com for finding clients.

Marketing Insight

• Many service-based businesses lack good internet marketing.
• Learn local SEO to rank your service business on Google and get clients on autopilot.

Product-Based Businesses (E-Commerce)

Benefits

• Scalability: Develop a product once, sell it multiple times without additional work.
• Various models based on investment level (e.g., Dropshipping).
• Higher potential for larger profits compared to service-based businesses.

Dropshipping

• Model: Supplier handles storage and fulfillment.
• Case Study: Speaker's kids created an online t-shirt store and earned $1,000 in the first month.

Increasing Profit Margins

• Once a product proves successful, consider producing it in bulk to reduce costs and increase profit margins.

Building an Online Presence

• SEO: Essential to attract customers searching online.
• Content Creation: Use platforms like YouTube, blogs, and social media.
• Case Studies: Friends and students growing businesses using TikTok, Instagram, etc.

Sponsored Content & Additional Revenue

• Sponsored videos and ads can significantly add to income.
• Use your platform to lead into paid courses or events.

Customer Acquisition and Retention

Referrals

• Use services like Referral Candy to incentivize referrals.
• Mechanism: Customers get a coupon for referring, referred customers also get a gift card.

Repeat Business

• Focus on getting repeat customers, easier to sell to than new customers.
• Use post-purchase follow-up emails.
• Offer special deals to large quantity buyers and dedicated support.

Conclusion

• Whether a service or product-based business, the key is to start and prepare for economic downturns.
• Current economic instability can be turned into opportunity if approached correctly.
• Call to Action: Watch the next video on starting an e-commerce business from scratch.