ReportWire

Tag: recessions

  • 3 Recession-Proof Lessons We Can Learn From the Medspa Industry | Entrepreneur

    3 Recession-Proof Lessons We Can Learn From the Medspa Industry | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    Estée Lauder chairman Leonard Lauder called it the “lipstick effect” — the growth in demand for small luxuries during times of economic uncertainty. The assumption behind this phenomenon is that when people are under more stress, beauty and self-care rituals offer a form of psychological comfort.

    McKinsey even reported a surge in demand for skincare and wellness products during the pandemic. So, with fears of an economic downturn never far from the surface, might the same apply to the more affordable alternatives to surgical procedures like tummy tucks?

    One of the most recognizable dermatology brands in the U.S., LaserAway, has now expanded to over 120 locations and reports the industry has been growing at over 20% annually in America. CEO Scott Heckmann says that LaserAway experienced “strong years” in 2008 and 2020 despite the recessions. He put it down, in part, to patients moving away from higher-cost providers like plastic surgeons and dermatologists.

    As CMO of Vagaro, a software provider to the wellness industry, I have witnessed it myself: So many people are abandoning surgical procedures for non-invasive methods such as body contouring that advancements in beauty technology are now allowing. They are simply more accessible and less overwhelming. I want to dive deeper into LaserAway’s growth as a barometer of the industry because it has drawn out three lessons that can help other beauty brands recession-proof themselves in an unpredictable economic climate.

    Related: 7 Strategies to Recession Proof Your Business in 2024 and Beyond

    1. A changing market is a good market

    When customers trust a clinic’s practitioners with something as sensitive as their bodies and faces, being very transparent about what’s involved in a procedure is critical to credibility. LaserAway’s social media features videos with real people, real nurses, actual treatments and basic plotlines — at their heart, these procedures are about helping people find their self-confidence.

    Providing people with a realistic picture of likely outcomes also ensures they are more likely to end up satisfied with the treatment. Internal data from our marketplace shows increasing demand for these non-invasive aesthetic treatments. Over the last five years, we have seen an average annual growth of new medspa businesses on our platform of 24%.

    Technology has been a key factor. While cosmetic surgeons have a very limited audience at a high price point, medspa clinics offer myriad services that open the door to a large market — including an increasing number of men. In fact, skincare makes up 45.6% of the global men’s grooming market (worth $85.2 billion in 2023) as old masculine stereotypes give way to self-care among younger generations.

    Related: 5 Recession-Proof Businesses to Start in a Turbulent Economy

    2. Diversification builds resilience

    In many industries, brands must be niche with their products or services. But medspa chains like LaserAway, Sculpt MD and Sono Bello can on-sell a range of services while still maintaining expertise in each area. That diversification is really important because it drives repeat customers and more revenue. When people get body contouring once, they are likely to come back. It’s the same with Botox.

    On our platform, we’ve found that medspa businesses offer an average of 47 services. Having a balance of higher and lower-value offerings like this is a great strategy to maintain steady income through economic fluctuations as people regard treatments as an ongoing investment in their well-being.

    Technology with embedded payments is also a key feature in helping people afford all types of treatments. A lot of consumers are choosing non-invasive procedures because they get the same results as surgery but don’t have to deal with the long recovery time.

    However, the pay-later option can make these treatments financially viable. Getting people through the door, however, does not require the hard sell because consumers are savvier than ever about what they want and expect.

    3. The power of referrals

    All beauty businesses need to be aware that the traditional sales model has evolved after first engaging customers through their different digital and marketing channels. The pandemic was the big impetus for digital influence, but people now want to be impacted through the use of real-life case studies instead of feeling like they are being “sold to.” Hence, the role of influencers.

    We can now assume that once people have sought out a product or service online and done their own research, they are already warm. For me, it is only once I have satisfied myself that a company has authority and integrity that I am ready to talk to a salesperson. The demand for more authenticity only reinforces the idea that the biggest point of sale in the beauty and wellness space should be referrals.

    It will be interesting to watch companies shift to this new expectation of how consumers want to be influenced through sales. This is especially the case since they are already doing so much right, such as their onboarding process that leads patients to choose their treatment, their body target areas, number of treatments already received, and their age. This kind of data can inform the appropriate regime and be leveraged to anticipate consumer trends and continue to build credibility.

    Related: How Small Businesses Can Survive and Thrive in a Recession

    Charity Hudnall

    Source link

  • What Is a Recession and How Do You Prepare for One?

    What Is a Recession and How Do You Prepare for One?

    The news is abuzz with rumors of the next recession coming in 2023 or 2024. But for most Americans, all of that triggers a sudden panic and a desperate need to look at one’s bank account.

    What is a recession, what does it mean, and how can you prepare yourself and your family’s finances for one? This article will answer each of these questions and more. By the end, you’ll know what to expect and how to prepare for a recession.

    What is a recession?

    According to economists working for the National Bureau of Economic Research, a recession is a prolonged period of economic downturn or declining economic activity.

    It affects a nation’s or the world’s entire economy and lasts for a few months or more. In some ways, the best way to understand the recession is to compare it to “regular” or positive economic activity and GDP.

    GDP (gross domestic product) is essentially the combined value of the goods and services made by an economy, like the American economy. The country’s GDP grows a bit each day/week/month in a standard economy.

    When a recession kicks in, there is no economic expansion. Instead, the GDP is negative — the value of goods and services in the economy decreases — for more than two quarters or approximately six months. People stop spending as much money when this happens because the dollar’s value decreases.

    Related: Are We in a Recession? Here’s What Economists Say

    This decrease in consumer demand triggers a decline in industrial production, exacerbating the spiral effect and making a recession last longer. A significant decline in the business cycle, characterized by many consecutive quarters of lower consumer spending, may lead to job losses or a high unemployment rate.

    Several past recessions have stalled economic growth and led to the depletion of the Federal Reserve or the “Fed.”

    These include the recession leading into World War II, the Great Recession financial crisis, which occurred in 2008 from speculation on real estate, and the most recent recession brought on by the Covid-19 pandemic and the necessary cutback/slowdown on retail sales in the U.S. economy.

    Signs of a recession

    Aside from this recession indicator, some typical economic indicators also have other signs and symptoms to pay attention to.

    These signs include:

    • More layoffs than average, a tighter labor market.
    • A general, widespread decline in stock market stock prices.
    • More businesses are going bankrupt than usual.
    • Fewer raises or promotions for workers.

    Related: Are We Headed for a Recession? It’s Complicated.

    As for GDP? According to some sources, the American GDP was -1.6% in the first quarter of 2022 and -0.9% in the second quarter of 2022. Technically, this means there is currently a recession, regardless of what people say.

    Note that a recession differs from a depression, which is much more severe. In a depression, the economy tanks significantly, and many more people may lose their jobs and money.

    In contrast, a recession is usually relatively short-lived. Some people may not feel a recession’s impact, depending on how much money they have saved up and their financial situation before the recession occurs.

    In any case, a recession is never good news, which could signify that you must prepare accordingly.

    How to prepare for a recession

    Fortunately, there are multiple ways in which you can prepare for a recession. Good recession prep can keep your finances secure until the recession recedes, allowing you to maintain your investments, keep your savings account intact and provide your family with peace of mind.

    Knock out as much debt as possible (and avoid new debt)

    Your priority should be to get rid of as much debt in your name as possible. You should already be trying to clear debt aggressively. The longer you leave it hanging around, the worse your credit will be and the more interest fees you’ll pay over time — it’s lost funds.

    As you put more of your money toward knocking out your debt, prioritize high-interest debt, such as credit cards and loans with high-interest rates. When you get rid of as much debt as possible, you set yourself up for financial success during the potentially turbulent economic times ahead.

    Avoid taking out any unnecessary loans or opening up new credit accounts during this timeframe. If you avoid further debt, you’ll have more money to spend on savings or necessities, which may be necessary soon.

    Related: How to Recession-Proof Your Business

    Keep saving aggressively

    Speaking of saving, you should continue to save aggressively or even save more money than you were previously.

    You might not get an unexpected promotion or pay raise during the recession. Even worse, your job could be at risk if you recently joined a company or are at the beginning of your professional career.

    In these cases and others, your income streams could dry up unexpectedly. If you save aggressively before that happens, you’ll be well-positioned to get back on your feet and weather this economic storm until clear skies return.

    Try to save as aggressively as possible and put that money into a secure savings account. That way, you’ll earn interest on those savings and avoid accidentally spending the money.

    Diversify investments

    Plunging numbers and red lines on charts are not reasons to withdraw all of your investments or blow up your portfolio if you’re invested in the stock market. You should keep your money in the market; after all, the stock market will eventually rebound just like it always does.

    Instead of panicking, diversify your investments by distributing your money into different stocks, funds, and other securities and assets. When you diversify your portfolio further, you protect it from economic damage, even from recessions.

    Plus, if you diversify your investments instead of withdrawing from the market, you’ll prevent yourself from losing money in the short term.

    Every time a recession occurs, some Americans invested in the market sell all of their securities, which only lowers prices for those securities. Then they regret this panicked decision as the market inevitably rebounds, with many stocks achieving higher prices than they reached previously.

    Bottom line: keep your investments in the market and keep your eye on the prize, particularly for long-term gains. A recession will eventually pass. Your current positions may be unattainable the next time you have money to invest in the market.

    Related: Worried About a Recession? Do This to Prepare Your Company.

    Bump up your credit

    Your credit score is also essential during a recession. You should improve your credit score before and during a recession whenever possible, primarily by eliminating high-interest debt such as credit card debt.

    If necessary, move any high-interest debt to a new credit card with an introductory 0% APR offer for any balance transfer funds. This can be an excellent way to quickly pay down any other debt in your name (in keeping with the tip above) without paying extra interest.

    In any case, try to improve your credit so you can take out emergency loans if necessary, and so any other fees or financial strain you face over the next few months, reduce your credit by as little as possible. Many people feel the aftereffects of recessions for years to come, primarily because it damages their savings accounts or credit scores.

    Don’t panic

    Do not panic if and when a recession occurs or when the news anchors start talking about it. Contrary to what some may believe, recessions are standard parts of the economic cycles inherent in capitalism.

    Simply put, recessions are inevitable declines in economic activity that eventually fade away. Once people stop panicking about the effects of a recession, economic activity should return to normal, and businesses will start to boom again.

    Just thinking of a recession in this light — a regular element of the economy and not something to necessarily be feared — will help you keep your head straight as you plan.

    Not panicking is crucial, so you keep spending and saving money, which are essential actions to do your part to prevent the economy from spiraling downward even further.

    Summary

    Recessions might be financially uncomfortable, but they are far from devastating if you take the right steps beforehand. The proper prep and patience will go a long way toward shoring up your bank accounts and protecting your finances throughout the upcoming recession until the market upswings again.

    Looking to expand your financial knowledge with more articles like this one? Explore more of Entrepreneur’s Money & Finance articles here.

    Entrepreneur Staff

    Source link

  • 4 Ways To Create and Sustain A Recession-Proof Business

    4 Ways To Create and Sustain A Recession-Proof Business

    Opinions expressed by Entrepreneur contributors are their own.

    Being a boss is hard, and it can elicit overwhelm and stress daily. This overwhelm is exacerbated when economic instability is looming. If you are an entrepreneur (in good times), you understand the map to success is stitched together with rejection, innovation and inspiration. My tenure as a business consultant and coach has given me an eagle-eye view of the fumbles and missteps of emerging talent. Let’s peek behind the curtain, which offers a glimpse into entrepreneurs‘ biggest enemies.

    The enemies of entrepreneurship are aligning energies with promises of instant gratification, the inability to build relationships, and a hyper-focus on the bottom line. The words “easy” and “instant” are nowhere in the definition of entrepreneurship. Most importantly, in times of flux, the foundation of business building is consistency.

    I see entrepreneurs who are brainwashed by the glorious algorithms of social media. Many entrepreneurs believe that TikTok and Instagram are their paths to riches and fame. I have walked with brilliant small business owners who focus on the bottom line and fail to understand the power of relationships. And I have been privy to the wave of overwhelm when business owners are faced with rejection. The energy that we align ourselves with is a make-or-break deal. And when we attempt to elevate our business to the next level alone, we are often banished to an island of stagnancy.

    Related: How to Recession-Proof Your Business

    Flexibility is the key to being recession-proof

    Experiencing fluctuations as a business is a norm. Adaptability is the cornerstone of an agile company that can withstand blips on the radar and experience steady growth. With the recession looming and the stock market volatility on the tips of everyone’s tongues, it is time to think outside the box and become recession-proof.

    When challenges are lobbed at us, it is often an innate response to turn inward, spend less money, and recoil from opportunity. Many entrepreneurs hunker down and wait for the juicy markets of yesteryear. I learned the lesson of reacting to spikes in global instability the hard way. When the pandemic ebbed its way into global consciousness, my immediate response was to go into overdrive. I amped up marketing strategies with phronetic energy. I did this because I connected with the news media’s deafening cadence, which proclaimed imminent economic doom. I attached my energy to the panic — and went into overdrive. This frantic attempt at trying to stay relevant led to burnout.

    When I took a step back to analyze my value proposition during an economic downturn, I recognized that my services could align in a new way with the new needs of potential clients. It is imperative to understand the needs of potential clients, no matter the economic or social climate. For example, if you are a coach or consultant, you must have your finger on the pulse of what your people need from you now.

    Staying stagnant in your brand messaging is perhaps the worst path for any entrepreneur. Being relevant, flexible and understanding your value in times of calamity can be your biggest strength. To become recession-proof, you must audit the fluctuations of your clients’ most significant needs. A savvy entrepreneur will adjust and fulfill their client’s new needs.

    Asking for help is a strength

    One of my most successful clients, who has withstood the fluctuations of an ever-changing market, recognized that she must be proactive in her success. Mika Altidor, the founder of the acclaimed vegan bakery, V&M Bakery, knew instinctively that the pandemic could be the downfall of her restaurant business. With a fail rate of 80%, many restaurants folded under pandemic pressure. Altidor knew she could not transition this wave by herself. The pandemic forced a significant shift in the restauranteur paradigm, and Altidor reached out to a coach and the expertise of mentors on Score.Org.

    Altidor firmly grasped the guidance and mentorship of her team and recalibrated her approach to serving delicious food to the masses. She wrote a cookbook, teamed up with local restaurants, and commanded a collective powerhouse in her local area.

    Related: 6 Proven Business Marketing Strategies to Grow During a Recession

    Join a community

    To be a recession-proof business, you must lock arms with individuals navigating the same space. Joining a networking community or mastermind group that is adequately moderated can groom your business’ growth. Professional communities are incubators for innovation, fresh ideas and new connections. There is an abundance of communities on LinkedIn that offer advice and networking that can change the trajectory of your business.

    Often entrepreneurs are offered the illusion that working harder will increase their returns. Yet, the truth is that working smarter and surrounding yourself with people who have traversed your journey successfully is the most ingenious way to elevate your business plan.

    Take a glance at your original business plan and make modifications. Modifying your original game plan is the only way to survive the turbulence.

    Related: 9 Smart Ways to Recession-Proof Your Business (Fast)

    Stop chasing shiny objects

    To be a victor in the recession, you must stop chasing shiny objects. Shiny object syndrome is defined as the insatiable desire to follow the newest trends in the hopes of attracting undue attention. Chasing fads and trends is only a temporary band-aid on entrepreneurs’ wounds. All businesses’ tried and true foundations are built on creating sustainable relationships that stand the test of time.

    Julie Lokun, JD

    Source link

  • Global CEOs expect recession to be mild and shorter: KPMG survey

    Global CEOs expect recession to be mild and shorter: KPMG survey

    Top global CEOs expect the recession to be mild and shorter, according to a survey by KPMG. As per KPMG 2022 CEO Outlook, 86 per cent of CEOs surveyed believe a recession over the next 12 months will happen, but 58 per cent feel it will be mild. The risk of recession has risen in the last few months as central banks across the world are hiking interest rates to contain super-hot inflation caused by a combination of factors such as the pandemic and Russia’s invasion of Ukraine.  

    “Nearly nine out of 10 (86 percent) CEOs believe a recession will happen over the next 12 months, but three out of five (58 percent) feel it will be mild and short,” the survey said.  

    Most of the top executives are of the opinion that the recession will make the post-pandemic recovery difficult. As per the survey, 73 per cent of CEOs believe the recession will upend anticipated growth over the next three years, and 75 per cent also believe a recession will make post-pandemic recovery harder. 

    “71 percent of CEOs predict a recession will impact company earnings by up to 10 per cent over the next 12 months,” the survey stated.

    Tata Steel CEO and MD TV Narendran said the pandemic and the events in Europe “have shown us how interconnected we are as a world. “To me, geopolitical issues are the number one risk. I think we all need to build optimized and resilient supply chains,” he said.

    Earlier this week, International Monetary Fund MD Kristalina Georgieva said that the outlook for the global economy was ‘darkening’ due to shocks caused by the pandemic, Russia’s invasion of Ukraine, and climate disasters on all continents, and it could get worse.

    Georgieva said the world’s largest economies like the US, Europe, and China were now slowing down, dampening demand for exports from emerging and developing countries. The IMF, she said, will next week downgrade its forecast for 2.9% global growth in 2023.

    In a comprehensive new study, the World Bank last month said that as central banks hike interest rates to control inflation, the world may be edging toward a global recession in 2023, and a string of financial crises in emerging markets and developing economies would do them lasting harm. 

    The US Fed has already hiked 75 basis points three times in a row, and it is expected to raise the rate by similar points next month. 

    World Bank Group President David Malpass recently said that global growth was slowing sharply, “with further slowing likely as more countries fall into recession”.
     

    Source link