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How to Make Money as An Alpha Male 2.0 During A Recession

Since the USA has been overdue for a recession for quite a while, and has experienced a 12-year period of a (relatively) bull market, there is an entire generation of young people who have literally never experienced a recession during their adult lifetime.  

(Note: The technical term for “recession” means the GDP has fallen in two successive quarters (six months). So technically we are not in a recession yet and won’t know if we are until early August, though the odds are good this will happen, even if the coronavirus isn’t a huge problem by then. Regardless, I’m going to use the term “recession” here for simple language. We are obviously in a sharp economic downturn.) 

If you consider just my adult life, this is my fourth recession. My first was the downsizing recession of the early 1990s, then the Dot-Com Bubble and 9/11 Crash of 2000/2001, then the Great Recession of 2008. Even these recessions do not include the ones that happened when I was a child, since I was born in 1972. These would include the Oil Crisis during the 1970s and the horrible double-dip recession of the early 1980s. The bottom line is that recessions are normal. You can pretty much assume a recession is going to come along and smack you in the head every ten years or so. Recessions are also good, as I explain here. They are a valuable cleansing process. They clean the market by removing the scammers, idiots, people who got lucky, and incompetent business owners (as well as many incompetent employees). It removes capital from those who should not have it and moves it to more competent stewards. When the recession is over, most people left standing in the business world are the competent ones who can carry things forward more effectively. The exceptions to this are the corrupt or incompetent companies and business owners who are bailed out by big government, such as banks and airlines. But there’s not much we can do about that since we Americans live in a corporatist country. Making money during a recession as a small business owner is a little different than making money during other times. In times of normalcy, nothing unusual or extraordinary is usually required in order to maintain a decent income once your business is operating at certain levels. During times of actual prosperity, even crappy business owners can actually make a decent amount of money under certain conditions. 

None of this is true during a recession. It’s during these times that business owners need to be creative and work a little harder. Otherwise, they’ll lose their businesses and have to go back and get bullshit corporate jobs. (Yuck!) 

Fortunately, the Alpha Male 2.0 isn’t nearly as affected in recessions as most business owners, for these reasons: 

1. He is selling high-margin products, services, or information, meaning he doesn’t need as many customers nor does he need to sell as much volume in order to stay in business as compared to normal business owners.

2. He sells to a narrow, motivated niche instead of to a large market, thus he’s more likely to continue to make sales even when times are tighter.

3. He has multiple businesses selling to multiple, diversified markets, so if one business doesn’t do well, one of his others are probably doing fine.

4. He has multiple income streams from each business, so if certain streams are damaged, other ones continue.

5. He’s location independent, so he can quickly switch from problematic locations to better ones with relative ease. He can also retarget his marketing efforts from one market segment to another if needed, sometimes almost instantly.

As usual, it’s far better to be an Alpha 2.0 business owner than a normal one, but I’ve talked about that many times before. Regardless, the Alpha 2.0 business owner can still be negatively affected by a recession, at least a little bit. This means he needs to modify his approach if he wants to ride out the recession and cash in on the big money once the market rebounds (which it always does). 

Here’s what the Alpha Male 2.0 business owner must do during a recession to ensure his income endures or increases: 

1. He needs to work harder, at least somewhat. If you work the same hours as a business owner during a recession as during good times, then you’re likely asking for problems. Unless you’ve seen literally no dip in your income during the recession (which is possible if you own Alpha 2.0 businesses), you’ll need to increase your average weekly work hours. 

I actually increased my work hours (yet again) a few weeks before the coronavirus hit since I set some big business goals for 2020, so I’ve done this already, but I would probably have done this because of this recession anyway. 

2. He needs to increase his marketing. Whatever marketing you were doing during normal times needs to be increased. More marketing equals more sales. As I always say, marketing is the most important function in your company. If you don’t market, you’re screwed. If you don’t market in a recession, your days may be numbered.

Some guys don’t like to do marketing. Tough shit. If you don’t like it, close your business down and go back to being an employee slave. Marketing is the price you pay for the freedom entrepreneurship offers. Also, once you do it for a while, it gets fun. When I was a young man I used to hate marketing but today I actually enjoy it.

Some people also get nervous that some of their existing customers or audience will dislike any increased marketing they receive. That’s true, some of them will hate it. No problem, they can leave at any time and probably should. If you’re offering value, this will only be a small percentage, and the new customers you’ll get will more than make up for this. I’ve experienced this several times myself and I can tell you for a fact that it always works out this way, especially if you do this next thing… 

3. You need to refocus on added value. You need to make what you offer even more valuable to your niches. How can your products, services, or information be even more valuable than they were before? How can your free content be more valuable? How can you add value? You need to brainstorm these questions, get some ideas, then implement them.

Thriving in a recession is essentially this formula: more work + more marketing + added value. If you do this, you’ll win. I promise you that the vast majority of your competitors will not do any of this. Most of these guys will go out of business by the time the recession is over. Then you’ll get their customers in addition to the new ones you gained during the recession.  

You can leave a recession with a huge amount of new money or leave it with a destroyed business. The choice is yours. 

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  1. Redbaron

    He is selling high-marginproducts, services, or information, meaning he doesn’t need as many customers nor does he need to sell as much volume in order to stay in business as compared to normal business owners.

    In your eyes, what is the numerical threshold in number of customers and sales volume for a single Alpha 2.0 business to be considered high-margin?

  2. Caleb Jones

    In your eyes, what is the numerical threshold in number of customers and sales volume for a single Alpha 2.0 business to be considered high-margin?

    That question is not possible to answer because it depends on what you’re selling, your ability to sell on the back end, how niched you are, etc.

    Speaking in general, ideally you want at least a 3-to-1 margin if you can get it, meaning your item (product, service, or information) costs you $1 and you can sell it for at least $3. A little less can be okay under certain conditions but not much less.

    That is a minimum, so 4-to-1 is better, 8-to-1 is even better, and so on. For example, my ebooks are 19-to-1. (I sell an ebook for $57 and my only cost is the $3 credit card charge; that’s 19-to-1.) I’ve sold consulting contracts that were as high as 60-to-1.