Grow
in a Declining Market
By Barri
Carian
Are you feeling the pinch yet? Are you spending your time commiserating? Or are you taking advantage of the hidden opportunities to grow your business?
The fact is that there are incredible opportunities in a down market, especially for the entrepreneurial business. Even during the Depression, fortunes were made. Recessions are self-fulfilling prophecies. At the first hint of a slow-down, businesses start to worry. They lay people off and pull back their investments in new initiatives. Other businesses then react to hearing of the layoffs and pullbacks. They start to stockpile cash, too scared to carry out their plans for promotion and expansion. Fear and negativity rule! Once they decide things will get bad they do get bad.
On the other hand, during prosperous times everyone feels confident. They're promoting their business and investing aggressively. The problem is that, when everyone is spending money on marketing, it becomes more difficult to differentiate oneself from the competition. In slower times, only the smart entrepreneur is aggressively spending on promotion while the competition is tightening its belt. This creates a significant gap between their marketing investment and their results. In other words, in a recession, entrepreneurial businesses can succeed by adopting a contrarian view.
Brave entrepreneurs see a recession as an opportunity and take advantage of the contrarian flow. The reality is that their competition is retrenching. That means that what they do now to grow the business will have a much more significant impact. Anything they do is wholly differentiated, not marginally differentiated as in "hotter" economic times when everyone is spending on marketing and promotion.
A recession also brings another type of opportunity. When your clients have to cut back, it creates new needs you can step in to fill. Ask how you can serve them differently today. Listen for new opportunities. When your clients are cutting back, instead of having solved their problems, they have created new ones. New problems and challenges for your clients translate to new opportunities for you.
Ask what it is that your customers and competitors no longer have the resources to do. This may mean adding new ways of doing business. It requires a willingness to pursue a different strategy, perhaps new services or an enhanced product line. Thinking outside the box is a must in times like this.
A third opportunity in a recession lies in the area of attracting new talent. When lay-offs occur, highly skilled people enter the job market. Investing now can pay big dividends in the future.
Companies that have not maintained a healthy balance sheet, improved the efficiency of their processes, and regularly solicited customer and market feedback are going to find it difficult to take advantage of opportunities in a recession. They are either too cash strapped or are trying to expand on a faulty foundation. The time to do these things is in prosperous times, leaving them poised to take advantage of any market slowdown.
Pursuing all of the great opportunities that come with a recession doesn't mean you should spend indiscriminately. Wisely placed and targeted investments will propel a company past the competition.
Taking the contrarian view is not for the faint-hearted. It takes an accurate and thorough understanding of the market, competition and product viability. It also takes the confidence to move against conventional wisdom and the courage to stand alone.
Barri Carian is Principal of Carian Consulting, providing solutions for organizational growth to small and mid-size companies. She has helped numerous partnerships thrive through intervention coaching. Barri can be reached at (949) 640-2141.