So, by now you’ve heard the headlines and seen the doomsday predictions. A recession is on the way and you want to be prepared. 

And I’m sure one of your first thoughts is: how do I make money in a recession? 

My first thought is to start a side hustle or figure out how to make extra cash flow on the side, especially if you’re still working a full-time job. And the best way to do that? Buy a boring business. 

Buying a business that already exists is one of the easiest ways to recession-proof your investment portfolio. You’ll be growing your cash flow and your assets, despite what seems to be going on in the world around us. 

Here’s my general philosophy on how to go about buying a boring business that I’m following as I grow my own portfolio and we continue into another deep, dark, and unpredictable financial time…I like to call it the BRRT method.

Buy – buy businesses that cash flow

Resist – in recession-resistant sectors (like laundromats and car washes)

Raise – with the autonomy to raise prices easily, if needed

Tech – and have the opportunity to add tech to their offerings (like card readers, automation, etc.)

Stick to these general guidelines and you’ll be further ahead than a lot of the other crypto heads or Wall Street aficionados who are sending Doomsday messages all over Twitter. 

If it were me, here are a few other things I’d do if I were interested in buying a business (or currently had a few in my portfolio):

1. Build in additional revenue streams. 

Because recessions can be so unpredictable, you should consider adding additional revenue streams to your operating model. The hack here is to have a wide range of price points for these new revenue streams so you can maintain or even grow your income.

For example…

If you bought a laundromat, is there an opportunity to start adding on a wash-fold service to your business? What about a monthly subscription or credit-based laundry service to add recurring revenue to your income? If your customer base consists of busy 9-to-5ers, why not add a delivery service to the mix? 

If you’ve got a car wash, what if you could add car detailing services as an optional add-on? Could you create a monthly membership for a certain number of washes per month that are use it or lose it? You may also consider setting up some form of a mobile car wash or car care option (like oil changes or paint touch-ups) that could be performed on the go. 

There are lots of options and ways to add additional revenue streams to your boring business, and having these set up and operational will help you protect your cash flow. If you’re in a recession-resistant industry, you should be looking for opportunities to not have all of your eggs in one basket anyway. 

2.  Prepare your business to sell. 

This is a bit of a hot take here, but if you can…try and prepare your business to sell, just in case. Notice I didn’t say “put it on the market today.” Here’s why…

When we’re in a recession, it’s a good time to get your ducks in a row, regardless of if you want to sell your business or not. It will force you to take a look at your operating expenses and make some necessary cuts if you need to. 

It’ll also help you get the right systems and team structure in place to help you keep things running smoothly. 

If you’re interested in acquiring and buying multiple businesses, this would also be a good opportunity to get your house in order so you can eventually hire an operator to run the business for you. 

This is exactly how I’ve been able to own 26 businesses at a time without losing my mind. Hire good people to help you run the day-to-day operations, so you can focus on the deal-making. 

Related: How to Find Your Small Business Operator

3. Stick to recession-resistant industries. 

So many business owners just assume that protecting their business actually means growing their real estate or their footprint, or even shelling out a lot of money to attract new customers.  

But sometimes, it’s as simple as adding on an additional product or service that you can remarket to the people who are already loyal to you and your business. 

If COVID-19 taught us anything, it’s that your business should have the ability to innovate and adapt to the market around it. Because sometimes…there really is no predicting what could happen next. 

When you’re playing in recession-resistant industries, you run into another opportunity entirely. I mean…let’s face it…as long as there are cars on the road, people will need to have their cars washed. As long as people are…well…people-ing…they’re gonna need clean clothes. 

Those industries aren’t going anywhere, no matter what kind of crazy is about to happen in the market, which is why I always recommend buying boring businesses. 

4. Keep your business buying team in the loop. 

If you know you’re going to be interested in buying a business as we enter the recession, it’s a good idea to first get clear on what kind of businesses you’re interested in. 

At the very least, I’d recommend starting out by coming up with a list of a few industries you’re interested in to help you narrow your search. If location is important to you, I’d also figure out the city or a mile radius for you to start your search. 

From here, you’ll want to inform your business buying team of your plan so you can have them on standby. Don’t have a team yet? Here’s my recommendation on who to have on your deal-making team. 

If you have a salesperson or a deal finder, you’ll also want to share your list with them ahead of time so they know what to look out for. 

Since you never know what opportunities are out there, you’ll want to make sure they’re aware that buying a business is on your radar and that you may be approaching them for their help in the coming weeks. 

Want to protect your assets through biz buying but don’t exactly know where to start? No worries, we made something for you. We’ll help you figure out which type of business to buy and break down every single step of the process in our online course for small business buyers. 

…or if you’re really serious about investing in small businesses, but you like to ask a lot of questions and want more hands-on support, join our mastermind. 

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👇

• Is Business Buying Right For You?
• The 5 Most Common Mistakes When Buying a Business Through M&A
• 5 Ways to Perform Due Diligence Before Buying a Biz

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