Savvy entrepreneurs know that a recession is a time of change and a chance to retrench. While others take refuge from the storm, these entrepreneurs stand firm and meet the recession head on, confident in their products or services. In fact, many large, successful corporations including Burger King and Hewlett Packard entered the marketplace during turbulent times. These companies recognized a change in consumer needs and responded accordingly.
Here’s how you can spot an opportunity and act on it during a recession:
1. Monitor the market. Recession means repossessions, lay-offs, and businesses closing up shop. Intelligent and proactive investors know to build something positive out of the bad circumstance around them.
2. Spot opportunities. A recession may change people’s spending habits, but it doesn’t stop spending. Customers are more cautious, but if you demonstrate value and tap into their needs, the money is there. Consider a recession the rallying cry of innovation.
3. Meet the needs of your customers. Tailor your products and services to your customers’ needs, and you’re well on your way. The most successful products are those that are created out of market research and fulfill a need.
4. Think creatively. Brainstorm for creative ways that products or services might help people survive the recession. For instance, if people are not traveling or dining out as often, they might enjoy a home-delivered product or something that creates a feeling of luxury at home. Everyone loves an affordable treat!
5. Diversify your services and products. Rather than cutting costs, focus on earning more money. While competitors are cutting back on their offerings, you can step in to fill the gap and reach out to markets that were previously out of your reach. Visiting tradeshows or reading trade magazine beyond your industry can help you come up with ideas.
6. Move quickly. To take advantage of opportunities, you’ll need the flexibility to adapt to change and the willingness to take risks. Try out a bold new idea, but put a time limit on your trial period and then evaluate whether you should adjust or continue.
7. Market value-for-money. Even in a recession, people still need the essentials like food, clothes, repair services, and household goods. Highlight the money-saving, stress-reducing potential of your products or services, and you can be the solution your customers’ need.
8. Start new ventures. Starting a business during a recession requires creativity and discipline. But while your competitors are struggling to cover their employee salaries, lease, and other expenses, you’ll be a lean, mean selling machine with much lower overhead.
9. Expand your business. Buying a business is a complicated process, but it can also be worthwhile when you consider the economies of scale. If a competitor goes bust, instead of buying a dead duck, bid for the customer base.
Remember that customers and their needs still exist, even during a recession. This is your chance to better fill those needs and build a successful business in the process. Once the economy improves, you’ll be in a better position than competitors who have been waiting out the storm.
© 2009 Ali International, LLC
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