October 27, 2022

How to Create Extra Income During a Recession

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How to Create Extra Income During a Recession

Unconventional Acquisitions

October 27, 2022

Turn on your TV, open your Twitter, scroll on TikTok.

No matter where you go, you’re bound to hear some talking head fear-mongering about the looming recession. 

We’re not denying it’s going to happen because it is most definitely coming. But what we do want to tell you is that it doesn’t have to be seen as a threat to how you’re planning on making money.

Because believe it or not, you can actually make money during an economic downturn.

You’re probably thinking… “buuuuut Codie, no one spends money during a recession so how the heck am I going to make it?”

Hear me out.

Let me introduce you to a little something I like to call the BRRT Method. 

Yes, I totally made it up but 1) it works and 2) is a smart investment strategy if you’re looking to make money as we enter an economic decline—which, if you’re reading this, I think that’s you. 

If you’re new to what we do here at Unconventional Acquisitions, we help people (just like you) who want a life of financial freedom by acquiring small, boring businesses with consistent cash flow.

So back to that whole BRRT thing.

The BRRT Method is an investment strategy that will get you there, even when financial times are tough. It stands for Buy, Resist, Raise, and Tech. 

Pretty straightforward, right?   

I’ve been using this method for years and it’s helped me make quite a bit of money, even if some “unprecendented times.” 

Let’s get into how you can apply this method to small business buying so you can start putting more cash in the bank and less time working from a cubicle or counting dollars and cents from the latest crypto trend. 

Buy a small business … but make it cashflow.

This one speaks for itself. 

You buy an inexpensive business that is under performing, but profitable, and you give it a facelift. 

Something to note, you want a tiny fixer upper—not a disaster that’ll take more from you than it’ll give. You gotta make sure the purchase price and cash flow can cover your expenses before you step in to fix it up.

Oh, and this part’s important. You won’t be using your own money to finance the deal.

If you’re going to be buying a small business, we recommend using seller financing or an SBA loan to pay for the business. 

Our personal favorite is seller financing, which is basically when the seller becomes the bank and who you’ll be paying each month until the OG deal is paid off.

It’s not only one of the least risky ways to finance a deal of this size, but it also gives you more flexibility in terms of the payment terms. 

You get to set the parameters of your monthly payments while considering how much cash you want to put back in your pocket. If you’re into spreadsheets, you will love this approach to financing.

This is especially important as we head into a recession and things may look like they’re going to slow down. You’ll get to design your deal around the business financials—and if they’ve been around awhile? 

You’ve probably got some data around how they’ve performed during other economic downturns, which is invaluable. 

Resist the urge & invest in recession-resistant sectors.

Now we’re at the first R in BRRT: resisting.

You need to make sure that your business is in a recession-resistant sector and can weather just about any storm. Because as I’m sure you know, recessions can be quite unpredictable. 

When every other business is dying, you want to make sure to invest in the one that thrives in lesss than opportune circumstances. 

Think consumer staples, groceries, alcohol, healthcare, budget travel, mobile homes. Basically any industry where people can…

  1. Save money
  2. Keep on keeping on with their everyday life 


For lack of a better example, you might be interested in buying a plumbing business. Because the crappy reality is that if you’ve got a broken toilet, you’re going to need someone to fix it, regardless of whether we’re in a recession or not.

Businesses like these may not be 100% recession proof, but they are recession resistant. These areas should continue to grow, despite being stuck inside of an economic downturn. 

Hot tip: you can also search the businesses historical sector returns to see how they’ve done in the past during these economic slumps. 

Take a peek at the overall performance of the business over the past 10 years—paying particular attention to their numbers around the ‘08 crisis (a.k.a. The Great Recession) if they’ve been open that long. 

Raise prices.

Alright, so you got the R for recession-resistant biz. Second R stands for Raise, as in raise those prices. 

Your goal here should be to find a business with underpriced services, so you can swoop in and mark things up. Raising prices is something that is often overlooked by small business owners for a LOT of reasons. 

And get this… some small businesses NEVER raise their prices.

With an average inflation rate of 3.8% per year, this is a completely missed opportunity to not only make more profit, but to also make sure you are accounting for the increased expenses that go up with inflation as you run the business. 

Add tech to the business offerings.

And now, what’s the T in BRRT mean? TECH.

 

So, get this… 

According to Blue Corona, 36% of small businesses don’t have a website and 80% of them don’t invest in content marketing (like Facebook, Instagram, Twitter, or TikTok) at all. 

Depending on the business, there’s probably some of the processes that could be automated or moved away from being managed on a piece of paper. 

It may seem like a no-brainer to you, but for small business owners (who are most likely boomers and/or tech-challenged) adding a few lean bits of technology to their already overflowing plate is probably not going to happen. 

This is because they probably just need someone to show them how or have you do it for them. 

So before you start your search to find out what kind of business to invest in, think to yourself…

Where is there a boomer who owns a sleepy business that you could buy, in a recession-resistant asset class, where you could easily raise the prices, and also add a little bit of tech to?

Because that’s where the money’s at, even during a recession. 

Interested in getting the lowdown on the who, what, where, when, and how of small business buying? We’ll walk you through exactly what you gotta do in our small biz buying course.

…or if you’re really serious about investing in the boring small business game, then our mastermind is the right place for you.

Yours Unconventionally,

Codie & Ryan

Co-founders – Unconventional Acquisitions

If you want to learn more about how to find and buy businesses, check out these articles👇


You can also register for the course here OR if you are serious about buying a small business, join our Mastermind.

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