Ep. 382 — Brian Beaulieu & Jeff Buettner: The Mild Recession Most Owners Will Misread

6 min read

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Episode Summary

You’re sitting in annual planning with two stacks. One says expand the line, hire the GM, place the order. The other says the news is screaming recession, hold cash, wait. Most owners are about to make the wrong call in both directions, because the real signal is more interesting than either pile. I had Brian Beaulieu (ITR Economics) and Jeff Buettner (ButcherJoseph) back for the quarterly economic and M&A update. The through-line in both segments: 2024 is a mild downturn with loud volatility, 2025 and 2026 are when the US economy climbs back, and the owners building a 12-to-18-month cash forecast right now are the ones who move while everyone else hesitates. Brian got into why Q3 GDP looked strong but was carried by rising inventories and non-discretionary spending, why credit has tightened to recession-inducing levels, and where the balance sheet battles between AP, AR, and inventory are quietly killing margin. Jeff covered why rate stabilization lets buyers underwrite deals again, why high-quality businesses still get strong multiples while volume stays low, and how normalized EBITDA is the story a buyer pays for.

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## Top 10 Takeaways
  1. The 2024 downturn opens space because your competitors hesitate while you keep moving on opportunities.
  2. Don’t extrapolate today’s negativity to 2030. The second half of 2025 through 2026 is when the US economy climbs.
  3. Mild recession with elevated volatility means whipsaw, not wall-banger. Plan for the swing, not the crash.
  4. Q3 GDP looked strong because rent and inventory carried it. Neither means your customer has money to spend.
  5. Credit is at recession-inducing tightness. Build a 12-to-18-month cash forecast before your line gets cut, not after.
  6. When a customer demands 120-day terms, take the 3.5% price increase. Don’t be their bank for free.
  7. Have the bank conversation now, before you need the loan. The relationship is the asset, not the credit line.
  8. Stabilizing rates let buyers underwrite again. That’s why high-quality businesses get bids while overall deal volume stays low.
  9. Your normalized EBITDA tells the story a buyer actually underwrites. No story, no multiple.
  10. Cash conversion cycle is the real constraint when credit tightens. Collect faster, pay slower, or finance someone else’s working capital.

Sound Bites

“This is going to be one of those good recessions because it’s not a wall banger. It’s not gonna put you on the mat. But it is going to make other people hesitate. It’s going to make them wonder because they’re not seeing it coming.” (@00:01:34) — Brian Beaulieu

“I need a 3.5% price increase to cover the cost of money. It won’t cover all of it, but at least I can make it happen on my side. And that price increase isn’t going to go away. So take the deal and minimize the pain.” (@00:11:32) — Brian Beaulieu

“My definition is a company that is constantly adapting, constantly looking for internal and external disruptors and capitalizing on them. If you’re not constantly adapting to the changes around you, then you are constantly losing ground to somebody else.” (@00:22:13) — Brian Beaulieu

“We’ve actually seen a slight improvement in multiples. A little bit of that as a function of the fact that the volume of transactions are down. So those companies that do come to market are likely really high quality companies, and that’s captivating a lot of interest.” (@00:37:39) — Jeff Buettner

“Every business owner can tell an amazing story of where they’ve been, where they are, and where they want to go. And then we say prove it. And then it’s bubble charts and PowerPoints, and it’s like, well, we can’t underwrite a PowerPoint.” (@00:51:15) — Ryan Tansom

About This Episode

Brian Beaulieu is CEO and chief economist at ITR Economics, one of the longest-running independent economic forecasting firms in the country, and co-author of Prosperity in the Age of Decline and Make Your Move. Jeff Buettner is a managing director at ButcherJoseph & Co., a middle-market investment bank that runs third-party sales, internal buyouts, and ESOP transactions. This is the quarterly economic and M&A update Ryan runs with both firms, split into two segments (macro first with Brian, then deal and capital markets with Jeff). The format is built to give privately-held owners a timely read on the economy and the M&A market in language that ties straight back to their own annual planning.

Resources Mentioned

  • ITR Economics — Brian’s forecasting firm.
  • ButcherJoseph & Co. — Jeff’s investment bank, third-party sales, internal buyouts, and ESOPs.
  • Prosperity in the Age of Decline by Alan & Brian Beaulieu — Referenced for the framing on the 2030 outlook.
  • Make Your Move — Referenced for the tactical playbook on pricing and balance sheet battles during a downturn.
  • ITR Dec 12 Webinar: The Great Depression 2030 (by age cohort) — Promo code ARONA10 mentioned for listeners.
  • Intentional Growth Starter Kit — Free access to the three-statement projection, target equity valuation framework, and financial scorecard.

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