There’s a lot of economic doom and gloom in the news these days; Unless you’re living in a cave somewhere, you’ve heard about the housing market, the unemployment rate and the rising price of groceries and gas.
For many business owners, it’s frightening. The fortune-teller economists are predicting even more “belt tightening” as the year goes on, and if you let it, all the crummy forecasts might scare you into doing something totally rash. Like nothing at all.
It’s pretty common, actually. When the leading economic indicators start heading south, many business owners go into immediate survival mode. Stop, drop and roll! Duck and cover!
The natural tendency is to adopt a siege mentality and hunker down until “things get better.” So they pull the plug on marketing and branding. Then P.R and charitable giving. Then training and customer service initiatives. They stop doing the things that helped them succeed in the first place.
It’s a strategy of inaction, and it never works. Not in the long run.
Studies of life and death survival struggles prove that action is the antidote for despair. You see it in cancer patients, in soldiers, castaways, mountaineers and disaster victims. Those who let despair take over, sit down and die. Survivors, on the other hand, take action.
Determination and a disciplined, almost clinical approach seem to be the secret. Survivors don’t place blame, make excuses or wallow in self pity. They accept their current circumstances and start working on a solution immediately by setting small, achievable goals. They don’t waste a lot of energy running around in circles, doing things that won’t get them to the goal.
For a climber in the Andes, it meant extricating himself from a crevasse and literally dragging his starving body and shattered leg 10 miles down a glacier. All the way back to camp. For one hiker in the canyonlands of Utah, it meant amputating his own arm with his pocket knife.
Makes surviving a recession seem like a cake walk.
Make no mistake about it, a significant economic downturn can be fatal to a small business. But businesses fail all the time, regardless of what the economy is doing.
The fact is, if you have a clearly defined strategy, and the discipline to stick with it, there’s no reason you can’t do much more than just survive a recession. You can thrive. You can gain ground on the competition. You launch new products and improve your entire operation. The history of American commerce if full of war stories that prove the point.
Post and Kellog’s were battling head-to-head in the breakfast cereal category when the Great Depression hit. W.C. Kellogg plowed ahead, doubled his advertising budget and even introduced the world’s first vitamin-enriched product cereal. Post cut back and Kellogg’s has been the market leader ever since. (Kellogg also cut hours in his plant for three of his shifts and added a fourth, just to spread his payroll among more workers. But that’s another story.)
But forget about the 1930’s. Here are some things you can do, right now, to survive the perfect, economic storm.
1. Use downtime to your advantage. Most managers have so many fires to put out they never get around to long-term strategic thinking. If things are slow, do it! Clarify your objectives and fine-tune your elevator pitch. Revisit your value proposition. Make sure you can communicate your strategy clearly and succinctly. (Few CEOs can.)
2. Get your bearings and refocus your efforts. In the woods, the last thing you want to do is wander around in circles. Same thing in business. Don’t waste precious energy and money chasing business that doesn’t really fit your model. (see item #1)
3. Renegoiate your media contracts. When it comes to print ad space and broadcast spots, you should be able to get a lot more for your money right now. So play hardball. Insist that your advertising salespeople work up innovative new schedules.
4. Get creative. Brainstorm new strategic alliances, sponsorship opportunities or marketing initiatives. Look for ways to leverage your existing partnerships. Do something! And keep this in mind: When times are tough even small initiatives can have a big impact. Because everyone else is sitting around waiting for the rescue helicopters.
5. Recycle one of your favorite, old ad campaigns. A lot of people kill campaigns way too soon, before the public has ever been thoroughly exposed to the messages. So instead of creating a whole new campaign, go through your archives and dust off the advertising that’s worked for you in the past.
6. Spend a little extra time listening to your best customers. Forget about you, and find out what their problems are. Then help devise a solution.
7. Take extra care of your people. They’re reading all the bad news in the paper too, and it’s unsettling. So step up, and be a leader. As the CEO, you have to be an optimist. Because nobody follows a pessimist.
1 thought on “How to survive when the economy tanks.”
Thank you so much, there aren’t enough posts on this… keep up the good work