The Collapse Is Coming...

Hi {NAME}, A recession is coming (if it isn’t already here). You can disagree with me, but having lived through two significant recessions in the past, I feel it’s my duty to share what I wish I knew “back then” so you don’t make the same mistakes I made if/when the next economic collapse happens. First, let’s talk about what NOT to do… I launched my first business just before the 2001 recession, but back then, my company was too small to notice. It’s a bit like being in the middle of the ocean in a pool float when a tsunami passes under you. It doesn’t affect the guy in the pool float, but you better believe it impacts the people on the beach. And that’s exactly what I witnessed. While my business was fine (again, it was too small to matter), I watched as the recession wave crashed down on the more experienced entrepreneurs around me. Some were able to ride out the wave, but most didn’t. Their companies failed. Fortunately, by 2003 the good times were here again, and my business rode the bull market wave to record sales year after year. But by early 2008, there were mutterings of another recession, and on September 15, 2008, it happened… Lehman Brothers, a 158-year-old banking institution, collapsed, ushering in the Great Financial Crisis. Since this was my second recession, you would think I would have learned a thing or two from my near miss back in 2001. You would be wrong. When this recession hit, I was one of those people on the beach, and the wave crashed down on me…hard. First, I got a call from my local bank that my credit line had been pulled. “That’s ok,” I thought. “I never really used that line anyway.” Then I got another call, which was from my primary bank this time. Not only were they pulling my credit line, but they were calling all my debt effective immediately. That meant I needed to come up with almost $120,000 in cash in 48 hours, or I would be forced into bankruptcy. Fortunately, I had the cash, but it pretty much wiped out my savings. Then the third shoe dropped… My merchant processor slapped me with a 20% reserve because my credit score plummeted due to the sudden drop in available credit. This meant they would hold 20% of all gross sales for up to 6 months until I proved I was “credit worthy” again. 20%…also known as ALL my margin. So there I was, no cash, no credit, and no margin. And just when I thought things couldn’t get any worse, they did: My sales started to dip. The dip was slow at first. Almost undetectable. But within 60 days, it was clear that the “Roaring 2000s” were coming to an end. With no cash, no credit, no margin, and declining sales, my business was on the verge of failure. And it happened faster than I ever could have imagined. I guess waves are like that. Looking at the economic uncertainty around us today, it’s hard not to see parallels to the warning signs of the 2001 and 2008 recessions. Mark my word. A collapse is coming… …but this time my business is prepared for it, is yours? Talk soon, Ryan “Prepared” Deiss [ryan-deiss-signature]   Sent to: {EMAIL} The Scalable Company, 4330 Gaines Ranch Loop, Ste 120, Austin, Texas 78735, United States Don't want future emails? [Unsubscribe](