I hate complaining! You should know that right off the bat.
While I’m all for identifying problems, I can’t stand wallowing, whining, and commiserating. I don’t tolerate it well when my kids do it, and I don’t let my clients go down that path either.
By the same token, I’m also not a fan of putting on rose-colored glasses and just pretending that everything’s hunky dory as everything crashes down. Instead, I prefer to watch for opportunities along with those foreboding signs that often precede what could be considered a negative event or period.
I’m talking today about how you can make the most of a recession, not because I can predict the future, but because something tells me this should be on our radar as small business owners.
Murmurings about eight-year cycles in the markets, the upcoming US election, and the relative economic calm we’ve enjoyed lately, just have my (and many others’) senses prickling a little bit.
That’s why you need to consider how an economic downturn could affect your small business and what you can do about it ahead of time.
You can’t buy insurance against a recession, but you can tuck some money away. Three to six months savings could be the difference between being able to take advantage of a recession — or losing your shirt.
Yes, you heard that right: “Taking advantage of a recession” is not only possible, it’s what smart small business owners do to get ahead. If hard times are coming, then I want you to be prepared to reap the seeds you sow now, and potentially make more money and grow faster than you could during “good times”. Let’s talk about the ways you can do that…
1. Stock up.
First, in a recession, things get cheaper. If you’re saving for equipment or even new hires, you can’t do better than to time your spending to occur during a recession. Higher competition makes a recession a buyer’s market.
2. Acquire or Merge Business.
Second, you may be able to buy out a competitor you would never have a hope of buying during flush times. If you have your eye on acquiring another small business, economic downturns impel many creative mergers and acquisitions.
3. Enjoy Partnerships and Relationships
Third, lean economic times are wonderful periods of time to reap the benefits of those relationships you’ve built during flush years. All the networking you do and, hopefully, the goodwill you foster during good times, are certain to make a recession a time of growth and strength for you and your business.
The fact is, doors get knocked on a lot more during an economic nosedive because people are desperate for income, new or repeat business, partnerships, etc. When business is good for everyone as a result of a strong economy, folks don’t need to seek it out. It just comes walking in the door. During an economic downturn, everything changes. Suddenly people come out of the woodwork and come up with all kinds of creative ways to earn your business!
I encourage you to bolster your network at all times, especially during easier economic times. That means your vendors, potential partners and colleagues, and yes, even your competitors! Take the time to do it because those relationships will see you through the lean years. The extra effort you put into your relationships now could set the stage for a great partnership opportunity when a recession hits hard.
Remember that cash cushion I was talking about? Everything hinges on that three to six months of money in the bank. Save it for the buying opportunity a recession affords you. Don’t stop hiring, Don’t stop marketing. Pour your resources into growth when everyone else is shrinking back in fear.
When the recession hits, and everyone else zigs, you will be in a position to zag.
An economic nosedive can be wonderful for your small business because wealth is made during hard times. Good times are for sustaining the growth you work so hard for during a recession.
So next time you hear talk about a coming recession on the radio, a podcast, or at dinner with friends, don’t worry and shirk the idea. Instead, imagine how you’ll take advantage of the dip and emerge better, stronger, and wealthier than ever.