Recession And Your Business
During recessions, depressions and economic crises, some of the biggest fortunes have been built. (In fact, if you consider that fact that basically everyone is doing worse than they did a year ago now, and than you look at the world’s 7 richest people, you find that their net worth actually skyrocketed in 2008).
But it’s not only that the rich get richer. Actually, the people with the right business mindset get richer.
And one thing all of them share is that they understood: This situation is temporarily. The crisis is temporarily. Yes, there might be a couple of hard years, but after that, things are gonna get better, people are gonna spend more money again, people are gonna buy houses and invest again. A crisis is just a temporary condition.
Many of the big companies in the world like IBM got big during a recession, because they acted differently from most other companies. Most companies start cutting budgets when a recession looms. They stop marketing, they cut research & development budgets. They save money in every corner. The belt tightened faster.
But those companies that come out of a recession as a winner are those that do exactly the opposite: companies that put their money in RnD, marketing and hiring great people. Because if you think about it: it’s a lot cheaper to advertise during a recession. Publishers are desperate for advertisers and willing to discount.
All the products that are low quality get’s swiped away. Because when everybody has a lot of money to spend, you can get through with delivering mediocre quality. But if money is tight, they really want to experience that they got value for their money, and if they don’t, they’re not gonna come back to you and might even refund the products.
If you’re a small business owner, then there are three things you should do:
a reality check: face the situation as it is. Don’t go into a “think positive and everything is gonna be fine, I can manifest success” mode. If the numbers tell you it’s gonna get ugly, be prepared for it, not surprised when it strikes. Look at things that you don’t feel comfortably looking at. Face reality brutally. Don’t put a soft rosy cocoon around yourself.
Diversify
Create multiple streams of income and don’t just rely on one product, one advertisement, on one customer only. Because if that one leg breaks, there’s nothing left for you. So if you sell an ebook where you are selling to stamp collectors, then you want to get out a second ebook that you sell to coin collectors and another one to watch collectors and so on. Diversify.
Downtime
Use your downtime, make the best use of it. This is when you don’t have work, when you don’t have things to do because you don’t have clients, no business to take care of. Use this time to educate yourself. Use this time to prepare yourself when things get going again. Remember: the crisis will pass, it’s just a temporarily state. (That doesn’t mean that everything will be fine and rosy, but if you prepare yourself for the moment people start spending money again, you can get back into business very fast). Example: research a new niche. Learn about marketing. Learn about how to find the best freelancers to do technical work for you. Use downtime to aquire skills of value to you and your business. Because this time is cheaper than if you are busy and successful already, because when you are busy, taking time to study will be “more expensive” because you lose revenue if you don’t take care of business. But if you don’t have something to do anyway, then your time is “cheap”, and you should use cheap time to improve yourself.
Categories: Living Profitable
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