So, the media keeps reminding us that the economy isn’t as good as it was a few years ago and just in case we haven’t felt that fact in our pocket book, Congress has different experts they routinely ask to discover the plight of the American people – then like weather forecasters, each expert shares their professional prediction of when it should all improve.  It reminds me of an economics professor I once had who used to tell the class, “Meteorologists and Economists – the only two professions you can have where you can be wrong more than half the time and keep your job!”

 

Now, let me jump on the bandwagon and remind you the economy isn’t as positive as it was a couple years ago and let me also share with you it isn’t as bad as history has shown us it could be.  Another important point everyone needs to remember, the field of economics is also commonly referred to as the, “dismal science.”  This isn’t to say, economists are manic depressives who never see a sunny day, however, go to the economics section of your local or online bookstore and you’ll see volumes of depressing topics – read these book and you’ll be left with the impression that soon the world will come to economic halt.  Some economists have even won the Noble Prize on their studies and predictions (predictions that have yet to come to fruition, yet they are still hailed as brilliant economists).  No, economists aren’t manic depressives who never see a sunny day – they see the sunny day, however, on those days they stand around and talk about the looming, impending storm that will be here any moment…

 

Okay, so you may be asking yourself, why have I used the two opening paragraphs of an article titled, “Your Success” to pick on the field of economics – I did it because I want you to start taking what they say with a grain of salt.  Economists do not control your business successes or failures – You do.  Yes, our economy has some real challenges before it – a contracting credit market, a declining dollar, lowered consumer confidence, and if you’re someone who loves politics, it’s an election year – that historically shakes things up.

 

Of course, these hurdles in themselves are not the real issue – the issue is how do you and your business react to these challenges?  Do you hunker down, put your head in the sand, and simply hope the storm will pass leaving you entirely intact?  Instead of just weather the storm, have you even considered using the present economic condition as a new opportunity? 

 

Let me give you 5 reasons you may be able to use this economic situation as an advantage (not listed in order of significance – just in order of thought.)

 

The Great Equalizer

Yes, I said (or wrote) using this present stagnation in the economy as an opportunity.  Economic stagnation presents interesting strategic scenarios to many industries.  It can disproportionately equalize the market.  How?  Whereas you may not be grossing as much revenue as you have in years past (you may even be losing money) your competitors are probably in the same shape – perhaps even worse shape.  If your competitors have a higher cost structure, their break-even point will be far higher than yours – meaning, their ability to ride out the storm will require far more work and may be far more limited – this is especially true in a contracting credit market (and flat equity market), an area many large business turn to raise funds when revenue is below expenses.

 

Regardless of your position on the business food chain, you need to examine methods to erode your competitor market share while improving your own long-term competitive advantage.  Example, perhaps you can secure new vendors your competitor has had locked up in exclusivity for the years – if your competitor is slow, so are their vendors.  Take a moment and think about the road blocks you’ve had in the past – the poor economy may have opened them up for you.

 

 

Move First – Move Fast

Now is not the time to play it safe.  Remember, business is a risk-reward scenario.  If you have a new product or service, introducing it slowly may be punishing in a slow economy.   Why?  Because your competitors (and even peripheral industries) are all looking for the newest widget that’ll help them succeed.  Introduce something new too slowly, and you may find that someone else has borrowed your idea and as the first, real-mover, they’re taking advantage of the market momentum.  If you can’t introduce something right, consider partnering up with a competitor or company that would mutually benefit from the arrangement.  It’s better to get some profit (and credit) from the endeavor than find yourself back in a market-neutral position where your competition hasn’t changed only the battlefield looks different.

 

 

Motivation

The attributes that motivated your customers two years ago isn’t the same as it is today.  Whatever you do, don’t say, “duh!”  I say this, because even though you and your peers have made the brilliant revelation that your customers aren’t doing as well today as they were a couple years ago – you haven’t changed anything in your business (from a customer perception) to facilitate the business process.

 

For example, furniture stores who use the, “Furniture Sale” use the same sale they’ve used even when things were great – do you remember your last sale?  Yeah, well, your customers do too and they don’t feel like attending this one…

 

You need to understand what motivates your customers – REALLY UNDERSTAND WHAT MOTIVATES THEM and build your sales machine around those motivating factors.  Note, motivation and “how did you hear about us?” are NOT the same thing.  People will part with their last dollar if it is something they feel fulfills a desire – and remember, DESIRES often trumps NEED.

 

People

It may be time to reshuffle the labor pool.  When the economy is humming like a well oiled machine the first area of your business that is affected– finding and retaining qualified employees.  When the economy is expanding it absorbs workers at an amazing pace – people relocate, wages and signing bonuses increase, and it’s typically the good employees that are the most mobile, leaving the bad ones to stick around like a fatty gut.

 

It’s time to make some adjustments.  This doesn’t mean laying off (or firing) your staff!  This means now is a great time to discuss your renewed expectations and start looking for people who can fulfill those expectations.  Often, if you have a new employee who is simply terrific – the bad ones will begin to come to the self-realization of how bad they really are (they’ll do it using a number of other excuses) and they’ll either leave or the contrast will finally give you the motivation to have them part ways with your company. 

 

Removing bad team members and securing new talent will help your business immediately and strengthen your future – remember though, when the economy starts to pick up you’ll need to work a little harder at keeping your new talent.

 

Location

Remember the first three rules in business – location, location, location.  Well, in tough economic conditions many businesses have to abandon their location.  Don’t think that just because a business failed in one location it means your business would fail there too – however, ALWAYS DO YOUR HOMEWORK!   Also, don’t move just for the sake of moving.

 

However, now may be a great time to expand – as commercial inventory increases, prices and terms become more and more negotiable.  Also, don’t just look at your business now; consider where your business will be in a year from now – in two years – five years.  Remember, as the economy recovers prime real estate will move FAST and with the increased velocity you’ll pay more, lose negotiating room, and chances are you may not even get the PERFECT location in a competitive market because someone beat you to the contract.

 

 

Closing Thoughts

Remember, upturns and downturns are a natural course in business.  You can’t truly enjoy the upswings unless you have something to compare it, and downturns do make the best comparrisons.  When a market becomes more challenging the worst option is doing nothing different.  Analysis paralysis is the equivalent of being asleep – except sleep is far more refreshing at the end of the day.  Business is an ever changing situation – it is most rewarding when there is more at risk, and right now, all of us, have a lot at stake.

 

Don’t focus on what you can lose; focus on what can be gained.  Always be thinking on ways to adapt, improve, and execute – doing so, will not only grow your business and improve your business successes in a challenged economy – it’ll catapult you to even larger successes when the economy is in its upswing.

 

~Richard Iddings

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