The Recession and Your Business
If you spend too much time reading the news, it would be easy to get depressed. I don’t have cable, but I do read the top online news stories. It seems like every single one of them is about how bad the economy is, why we must have a bailout, and how unemployment is increasing.
Gas is expensive. Mortgages are collapsing. Inflation is sure to rise.
It seems everything is doom and gloom.
Yes, people are hurting. The economy goes through cycles and too many have expected growth to last forever without any hiccups along the way.
How is this going to affect your online business?
Depending on what you sell, it may not affect you at all….or it possibly could increase your profits.
John Jantsch wrote a great post on his blog about how Small Business is the Economic Bailout.
While large businesses have cut 170,000 jobs in the last six months, small businesses have created 200,000 new jobs.
The vast majority of my readers are in the small business category. So those bleak financial pictures you’re been seeing don’t apply to you. Sure you may have a little more trouble if your online business model relies on borrowing cheap capital, but again the majority of my readers don’t take out large business loans to keep their internet business moving.
A few quick points:
1. Price Competition – When money is in short supply, you start looking for ways to save while living the same basic lifestyle. This means you turn to lower cost solutions. In many cases, that’s exactly what the internet provides. With the lower overhead of online businesses you’re going to see many of them start pointing to their lower costs compared to local stores.
2. Unreliable Jobs – If jobs become less reliable, people are more likely to turn to the internet for home based work. This means all those of you who sell something related to work at home or producing a positive ROI for small businesses are in a good position. In bad periods, business opportunities increase instead of decreasing.
3. Affluent Marketplace – Customers who purchase online are more affluent on average than those offline. It’s a good time to ask yourself though whether you’re selling to those with or without money. Take a look at this blog article: Recession Proofing the Affluent Market. Their advice is to add savings and value instead of cutting rates (good advice).
Basically, it’s going to be your choice as a small business whether you decide to participate in the recession or not.
You might find sales of some of your products decreasing. OK. Move with it. Wherever sales are decreasing, you’ll be able to find somewhere else where sales are increasing.
I have a product where sales have been declining over the past two months. So what? I have others where sales are booming.
This just gives you another reason not to base your entire business off of one product or service. If you’re in the position where you see some of your sales decreasing, ask yourself, “What are people buying?” People may not be buying what you’re selling, but they are buying something. Get in front of that hungry market.
If you’re in competitive advertising markets you might even get a nice little secondary effect. If your competitors start worrying about a recession (and decide to participate in it), they’ll cut back on their advertising…giving you lower cost advertising sources!
All in all, now is not the time to cut back.
It’s simply time to examine all the aspects of your business.
- How can you produce more leads at lower cost?
- Are you following up with your customers at every step in the process?
- Where can you add value and other additional sales to your funnel?
- What else are your customers buying?
- What is your competition doing that you could model?
- Enterpreneur or Employee
- 3 Marketing Lessons From Building a Pool
- 3 Characteristics of Winners
- I am Not Ashamed of the Gospel
- Successful and Failed Experiments
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14 Responses to “The Recession and Your Business”
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Great post. I will read your posts frequently. Added you to the RSS reader.
I made a few affiliate sales immediately after the gas prices shoot it the other day
Terry – thanks for the link and yes, I agree, we can talk ourselves into this if we want. I know that there are some businesses that are directly impacted by access to money, stock markets and the LIBOR, but one of the natural advantages that small businesses possess is the ability to change course very easily. Opportunity awaits in every kind of market.
Excellent article. I too have subscribed
Terry – Home business doesn’ t need large amount investing so it is easy to around in the bear market. But it is hard to know how to invest the right products to the right market. I think Terry is the our mentor.
Chris
Terry, thanks very much for the great post. Good bullets and right to the point. I appreciate it.
I think this downturn represents a giant OPPORTUNITY!
Many small businesses are not already doing very basic marketing — they do not know about and/or are not taking advantage of low-cost, no-cost marketing methods. They are currently losing money by not fixing their marketing blind spots and marketing leaks. They have not optimized their marketing — and they don’t know how.
The people who read Terry’s blog DO know how to do those things. If you help small businesses get through this economic crisis by using those mrktng methods, you can help them tremendously — and be paid to do so (justifiably)!
Thus, this is a golden opportunity to help — and to profit from the fiscal mess.
– TW
When everything is doom and gloom, when there is talk of a recession or depression at every turn, when it seems that there is absolutely no light at the end of the tunnel,…perhaps this is the turning point. One year on, looking back, we might see that right now is the low point of the crisis.
Just thinking out loud.
Great article!
The thinking resonates fully with what I wrote in 11 Compelling Reasons for Starting Your Own Business, which embraces small business and home business as the way to defy economic downturns and achieve freedom in life.
With every bad situation, there is always an opportunity. Thanks God we have Jesus that is our provider that is not affected by the world economy.
John Tan
This is a great post. You are spot on. You can choose to participate in a recession or not. It’s amazing that, with an online business, you have that choice. Not to mention all the benefits that go along with it. Jobs nowadays really volatile when it comes to stability. It’s important, especially at this time, that your job isn’t your only source of income. People really do have choices. Again, great post.
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Terry,
I think you hit the mark here. I am a website business broker and I have the opportunity to speak with a lot of people daily. The interenet has a lot more insulation against economic downturns for the reasons you mentioned. In addition, people buy more online so they don’t have to spend on gas, there is more selection and the owner of the site draws from a national and sometimes international market instead of a local or regional. I am finding investors buying internet businesses because they want stable cash flow rather than volatile real estate and Stock market fluctuations that they have no control over.
There are enormous opportunities online that have greater global reach so most businesses can actually continue to prosper and thrive even in theese economic times.
David Fairley
President, websiteproperties.com
Great article. And you are right, I am noticing all these fliers around campus at ASU and around malls for people to have a “great opportunity making six figures” working at home. That is becoming more and more popular.