Intro: Do you feel like you were meant to have a kick-ass career as a hair stylist? Like you got into this industry to make big things happen?
Maybe you’re struggling to build a solid base and want some stability. Maybe you know social media is important, but it feels like a waste of time because you aren’t seeing any results. Maybe you’ve already had some amazing success but are craving more. Maybe you’re ready to truly enjoy the freedom and flexibility this industry has to offer.
Cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy. When you’re ready to quit just working in your business and start working on it, join us here where we share real success stories from real stylists.
I’m Britt Seva, social media and marketing strategist just for hair stylists, and this is the Thriving Stylist Podcast.
Britt Seva: What is up and welcome back to the Thriving Stylist Podcast. I’m your host, Britt Seva, and I’m going to make this episode sound just so peppy. I’m going to dance my way through it, ‘cause we’re talking about the recession. And I feel like if I keep it upbeat and I keep it really fun and festive, it won’t feel so doomsday.
I’m obviously being very sarcastic, but the reason I’m sharing this episode is not to make anybody panic. I don’t want anyone to feel like, “Oh my goodness, the worst is coming,” ‘cause that’s not what this is about. But as I’ve said before, and I’ll keep saying it again and again, the best way to be successful in business is to be proactive, not reactive.
And if I was a betting woman, I would say that this episode is going to be one that a lot of people skip now at the time of publication and release, and in 18 months when the recession hits, it’s going to be my most downloaded show. And there’s a lot of people who are going to be saying, “Well, gosh, dang it. I wish I listened to this back then,” and me too. But my hope is that as many people as possible can listen to this, set themselves up for success so that when inevitably a recession does come, you’re ready for it.
Let’s first talk about what exactly a recession is, how to best prepare, what is being predicted is going to happen, and some realities about our economy ‘cause here’s the deal. A lot of people are talking about like, “Oh my goodness, cost of goods increased.” Do you know why there’s a cost of goods increase? Has anybody stopped to think about that? I have a little factoid to share with you that’s probably going to blow your mind.
So by the end of 2020, between 20 and 25% of the money in circulation in the United States had been printed during that year. So a surplus of money had been printed in 2020 to help get people through the pandemic, right? The relief fund.
Fast forward by the fall of 2021, that number had increased to about 40% of currency in circulation in the U.S. At the time of this recording, it is estimated that 80% of all U.S. dollars in existence today were printed in the last 22 months.
Last January of 2020, the U.S. Fed Reserve had 4 trillion. Flash forward to today and that number is $20 trillion. All that happened is the money machine was turned on. Nothing is actually backing the money. It’s not like we found a bunch of gold or like something amazing happened where it’s like, “Oh my gosh, this is great.”
What happened was money was equally distributed, arguably right? It wasn’t fully equal. It wasn’t fully equitable, but it was passed around in a variety of ways. The rich got richer. There is no doubt about it. That’s not arguable. And then when we look at those who were in the lower economy levels, they were given things like stimulus checks, right?
So what happened was everything rose proportionally, there was more money in circulation, but essentially everybody was where they were, give or take.
Now, some people are certainly in a less ideal financial position now than they were in 2020, abso-freaking-lutely. There’s no doubt about it. Some people are in a much better financial position. Some people have benefited greatly, right?
However, on average, when you look at the middle, everybody kind of went up a little bit. The value of homes coast to coast increased. If you’re a homeowner, did anybody’s house not increase in value in the last couple of years? When you look at the inflation, the supply of homes is in super tough shape, right? There is more demand for homes than there is supply to take care of them. How come? Because we’re starting to get into this crunchy place and space where people have all this extra money. 80% more revenue is being circulated right now. Holy cow.
There’s more money being tossed around, which means people who were like, “Well, before I couldn’t afford to do X, Y, or Z, but now I’m going to do it.” That was the plan. The U.S. did this to save the economy. They didn’t want the airlines to tank. They wanted people to want to go to Maui, right? It only makes sense. It allows everything to keep moving forward, but what’s now happened is everything is more expensive. Why is everything more expensive? Because there is more money to go around. It only makes sense.
So when we say things like, “Oh my goodness, I can’t believe the cost of goods increases,” what? Of course it does. Everything has increased, literally every little thing has increased. There is nothing that has not increased in value, and it only makes sense now that you know these statistics, right?
The reason why we’re talking about this and the reason why we’re talking about the recession is historically when you look back about every 10 years, or less sometimes, we go through a recession in the United States about every decade or so.
We are very overdue. We’re many years overdue. A lot of people thought that 2020 was going to be the catalyst and I actually recorded a podcast back then about it. What would need to take place if that were to happen? You can listen to it. It’s still a goodie and that still rings true, but it didn’t. How come we didn’t? Because the money machine got turned on and all of this artificial stimulus went out, right?
It prevented the recession, but it doesn’t actually prevent it. It just pushes it off because now we’ve got a whole new set of issues, right? There wasn’t this housing crisis that we’re experiencing right now two years ago. It looks completely different, right?
My husband and I have dreamed of owning a vacation home in Lake Tahoe since the moment we met. I mean, since we were kids 20 years ago, we’ve talked about it. Like one day we’re going to have our Tahoe house. Man, we should have bought in 2019 because the home values there have quadrupled and it’s not because there’s a better tourist economy up there. In fact, there’s a softer tourist economy up there, so that’s not it at all.
It’s that there is a supply and demand issue, right? If you sell a home today, where are you going? Where are you going to buy? There’s nowhere to go. So people are holding tight, which creates this supply and demand issue. The other thing is too hard to find lumber. We can’t get the supplies that we need, so we’re having these new issues.
So yes, maybe we didn’t have a recession on the back end of the pandemic, but now we’re facing this whole new plot of problems.
When you look at—and you can go ahead and crosscheck me on this, it’s pretty widely documented. When you look at what economists are saying, and they’ve been saying that a recession is looming for quite some time, there is a projection that it is not going to hit in 2022, which is actually why I’m recording this podcast now. I want you to have time to prepare for it.
So not going to hit in 2020, they’re projecting 2023, potentially 2024. But what they’re saying is the longer it holds off, the more painful it’s going to be.
And so often when we talk about recession, it’s like, “Well, what does that look like?” We don’t know. If we knew, we could do something to try and prevent it, but we don’t know.
There’s a lot of different things that caused the recession. When you look at what happened in what they call the Great Recession of 2008, that’s what’s called an asset bubble recession. So this also happened. I remember this, I was still in high school, but when there was the dot-com bubble burst, right? That was another asset bubble.
When we look at the housing bubble of 2008, there was faulty mortgages going around and whatever, that’s what caused that recession. I don’t know exactly all that’s happening right now, right? We don’t know all that’s going on behind the scenes. If everybody had known there was going to be this housing market crash in 2008, a lot of people would have made different choices. We don’t know, right?
So there’s different things. There’s economic shocks that can cause a recession, there’s overheating, which arguably could be what’s happening right now. That could cause a recession. There’s a lot of different things that could cause it.
Now, if we were able to get out ahead of it, which is what we tried to do coming out of the pandemic, right? Try to get out ahead of it causes a different slew of problems and it basically pushes it off further. So we don’t know exactly what is going to cause the next one. At least, I don’t know, I’m not finding it anywhere. And I tend to think if it could be pinpointed, people would do things differently. Because when you look at what happens, when the economy crashes, people lose their jobs, people lose their homes, people lose their stocks, people lose their retirement. It’s painful. So if we were able to predict it better, of course, none of those things would happen.
But the unpredictability is what makes it super scary and it’s also what makes it super real. So knowing that more than likely in the next year, 18 months, two years, this is going to be the reality for all of us, how do you set yourself up for the best possible chance of success?
Now I’m going to toot my own horn—toot toot—for one second and say I do feel blessed that I was able to set up so many Thrivers for success during the pandemic. Not everybody, certainly not everybody, but there’s a good portion of Thrivers who said, “You know what? It stunk that I couldn’t work, but financially I actually ended up okay because I had done X, Y, and Z to make sure that I was going to be all right,” right?
So I’m going to continue trying to be proactive in giving you all the tools and opportunities you need to ensure that you are stable regardless. And let’s just share some of the things that you can get wheels in motion on today.
Now I will share right at the top of this, when thinking about who is going to get hit hardest if there is some sort of recession—when we think about what happens with a recession, people lose their jobs, pretty much always.
And right now unemployment, is it an all time low? Right? We talk about the Great Resignation. It’s because there’s so many opportunities for people to work, so why not leave? You can certainly go somewhere else. There’s not a lot of people unemployed right now.
There’s plenty of opportunity to go around. Again, it’s fully artificial. And so while it’s not artificial, it’s the reality, but is it sustainable becomes the question, right?
So when people lose their jobs, what happens is they start losing financial confidence in the economy. That’s where I need to nail home. It doesn’t mean that people don’t have money. It means that they do what? They get tight with what they spend.
Going back to 2008, what did we see people loving? Groupon, those TV shows about coupon clipping, right? That was huge. It became super sexy to be savvy with your money.
Whereas pre-2008 was a lot like things are today where people are financing cars they can’t afford, they’re overbuying houses, and they’re doing stuff to flex, right? Well, watch, when there’s a recession, those people are labeled as really negative things and those who are smart with their money, like the Suze Ormans. Oh my gosh, she’s going to blow up because she’s all about being smart with your money, right?
When you look at people who are smart with their money and are savvy with their money and teach you how to save money, they’re going to go through the roof and back because that’s going to be their sweet spot, right? That’s what it comes down to.
So knowing that the consumer mindset, even if someone has not lost their job, even if someone has not lost money, they become very tight with their money. So what are the things they’re going to cut back on?
Go back to the pandemic. What did you learn from the pandemic? Remember we’re being proactive, not reactive. Like I said, we couldn’t prepare for the pandemic. None of us knew that was coming. We had never been through it before. There wasn’t a lot to do to prepare. Now we’ve been through it, so we can’t claim that again. Now we got it.
What did people want done during the pandemic? Go. Cuts and color. That’s exactly right. So those are going to be your bread and butter services in a downturn.
I actually said this—you can go back and listen and crosscheck me on this. When I did my episode back and I think it was 2020 when I was talking about, listen, what happens if the pandemic does cause a recession? I said, I am truly most scared for the extension industry. And listen, I’m an extension wearer. I’m a huge fan of those extensions, okay? However, if people are getting tight with their money, spending a thousand dollars to get your extensions put in, I mean, whoa, that might be one of the first things that gets cut, right? Now, not necessarily, but you have to start thinking about that.
You do not need to change anything to your business right now, and this is what I want to hammer home as well. Often as we get proactive and we’re trying to stay out ahead of something, we start doing really wacky things, like we’re like, “Oh my goodness, but what if this happens? I better start doing cut-onlys again, even though I phased them out of my business.” Don’t. I’m not saying that. I’m not saying you have to rip the rug out from under your business. What I’m saying is all right, when the recession hits, know that I said this, know that I said extensions might fall flat. Really luxury services are probably going to be what takes the dive and thinking about, “Okay, how am I going to go to those extension clients,” or somebody who maybe tells you like, “Listen, Britt, I wanted to upkeep this, but my partner just lost their job,” or whatever happened, or “I’m just so unsure. We don’t know what’s going on. I think I want to take my extensions out.” “No worries. Let’s figure out a new plan for you to be able to still feel confident in how you look.” Start creating those packages now, like the extension recovery hair care package, okay? Because anybody who’s worn extensions and has had them taken out, it is a very emotional experience.
And like right now I’m thinking of somebody I love and adore—I think you’ll know who you are when I say this—she does these adorable videos, like a lot of them are reels about how clients say they want to take their extensions out and she’s like, “Okay, I’ll see you back.” And she holds up the hair and the joke is they come running back four weeks later, like, “Where’s my hair?” It’s not going to be as funny when the recession happens. It is actually going to be an emotional turmoil period for people. It is funny right now. I’m not saying stop doing those videos. But what I’m saying is that’s the kind of stuff that’s going to flip on its head, like that’s not going to be as cute and funny anymore, right?
So what are we going to do and how are we going to react when those are the kind of things going on? And this is where I talked about. I even talked about this I believe in my Bulletproof course is the idea of clip-in extensions aren’t as high of quality, but they’re also a fraction of the price. 20% of the price, 25% of the price, 30% of the price. Is there an opportunity for you to start lining up those things now so that if somebody was paying a thousand dollars for extensions can’t sustain it in a year, a year and a half, say, “Listen, let’s get you transitioned to the clip-in line. This will be good for you for short term, and then I’ll see you when you’re ready, I’ll be here and we’ll do what we need to do.”
Start thinking like that. That’s what proactive thinking looks like. It doesn’t mean go back to doing all the services you eliminated just in case something happens. We don’t need to have a “just in case,” but it means thinking forward as to what am I going to pivot into?
Because the excuse of, “We didn’t know this was coming,” that was a valid excuse in 2020. It is not a valid excuse today. We’ve done it now. So what are you going to do to stay out ahead of it, right? Think forward.
Build a strong brand. Now the strong will survive. We have seen that be true time and time and time again. When there is a downturn or a recession, it’s the people who had been proactive and had already built a strong brand and had a great reputation that carried on and carried forward. It’s those who were like, “Well, gosh, dang it. I wish I had done this, that, or the other thing.” I know, I wish you had too, but now it’s a bit too late now. It’s going to be challenging.
So for those of you who are like, “You know, social media’s too hard,” “I don’t want to build a website,” you are going to be kicking yourself super hard in a year or 18 months. This is your chance to get a grip on it.
When we talked about what a brand is—last week, I talked about personal brand. I do personally think the personal brand is going to win in the face of the economy.
Going back to 2008, it was more like the experience brand or the corporate brand, because we turned to these pillars as what was going to get us through. I think that the running joke is like, when is the relief coming? Like we’ve all collectively as humans been through a really difficult two years that continues to carry on and carry forward, and we’re leaning into each other as human beings for that relief. We’re not turning to the corporations, right? We’re in this very community, heart-centered trust-based space. I don’t think that’s going to change anytime soon. So I see the personal brands winning.
Now, salon owners in the house, your ears should have perked up when I said that. For those of you who has have hesitations to your stylist building their own unique identities and brands, man, is that going to burn you when all this goes down because I’m telling you, clients are going to feel an affinity for the people, not the building, when the “S” goes sideways, like I really promise you that they will.
So really thinking about, if you’re a salon owner, how am I going to ensure my people are building trust with their clients? You can’t force them to do it, but you can help to set them up for success, right? Are you showing your team regularly on social? Are you humanizing them? Are they a personal brand or are they just cogs in your machine, right? Start thinking about those things now.
Next, get your budget in gear.
So I’d love to actually get your feedback. Can you let me know on Instagram DM or in the podcast ratings and reviews? I’m throwing around the idea of doing a podcast on budgets and profit margins. I’d love to know if that’s of interest to you, but getting your budget and gear and saying like, “Am I minding my spending or am I doing the spend and pray where the money comes in and I hope I don’t spend all of it. Hopefully I can pay my living expenses and hopefully the credit card balance stays as low as possible.” Oh my goodness, you’re going to be in real dire straits when this recession hits, right?
We got to get out of that, like we have to know our numbers and listen, I call it being numbery, like, I hate numbers. I hate them. It’s not my strong suit. I am obsessed with them, like ask anyone on my team and they’ll be like, “if she doesn’t stop talking about the numbers, I’m going to freaking lose it,” because I have to be obsessed with them.
That is the lifeline of your business, so you don’t have to like them. You have to understand them. That is your role and your responsibility right now.
And lastly, and probably the most obvious, invest. I mean this now is not well, I mean, it’s always a little too late, right? The best time to invest was yesterday. It’s always the rule, but invest.
And when I say invest, I mean, invest in education, invest in stocks or mutual funds or properties or whatever makes sense to you. Speak to a financial advisor as needed, but make sure that you are being smart with your money.
Buying a car is not an investment, buying a house is not always an investment. It really depends on where you’re standing financially, what your objectives are with any of these financial moves that you’re making and really asking yourself like, “Is this to push me forward, right? Is what I’m doing and where I’m spending my money actually setting me up for success?”
What if we’re in the position where we can’t do hair again for a while? What are you going to do? We’re not necessarily on the outside hump of that, right? So really thinking about am I setting myself up for success when there’s a turn?
So again, I don’t want to scare you about a recession coming. What I want you to do is think forward, create your contingency plan now. How are you going to communicate with your clients? What is your messaging going to be? I don’t want you to be discounting your prices. I was not going to suggest that. The money’s been printed. The money’s out there and the money will still be out there. People just get stingy with it. So it’s not cut the prices, it’s shift the positioning, right?
And now as your call to action to think about what that positioning shift is going to be. Now, if you need any help on this, you can always head to thrivingstylist.com. I have lots of tools and resources, but as I always like to say so much love, happy business building, and I’ll see you on the next one.
