I received the following comment from reader David Oliver the other day. He made a really important point that I totally agree with.
“You know what I was thinking one day is how so many people need to develop their capacity to find the good/opportunity in situations. It’s really like developing a muscle. It takes practice, work and time.
People who don’t do well, always see the bad and the lack of opportunity (regardless of the economy).
People who do well, see the good and the opportunity.”
In the nearly 30 speeches I’ve given this year on profiting from this recession, there’s always a key moment where people in the audience get their “ah ha” moment.
This moment occurs when I help them notice the opportunities in their business that were “hiding” in plain sight.
Here is one example I use to make this point:
In an economy that is shrinking, where there are fewer customers who are spending less money, there is only ONE mathematically possible way to GROW your business. What is this approach?
Simple. Take business away from your competitors.
When you’re hungry, but the size of the pie is shrinking. You eat more by getting a bigger slice of the pie. It is the only way to grow in a shrinking economy.
Think about it. Most of your competitors have pulled back and are expecting to lose business. I say you don’t disappoint them!
They are doing less advertising, less marketing, and less selling.
They are cutting back on customer service to save money.
It costs less and less money to market your business as advertising rates have dropped like a rock.
Your competitor’s best customers that used to be impossible to lure away, are getting more dissatisfied with each passing month (e.g,, who has been really happy with their stock broker the past 12 months?)
This make is a lot easier to “steal” your competitor’s best customers.
Yet if you talk to most entrepreneurs and their salespeople, they spend all their time focusing on the severity of the recession — and virtually no time on finding and exploiting their competitor’s weaknesses.
They are ignoring this opportunity that is sitting in front of them “hiding” in plain sight.
My question to you is are you doing the same?
In a given week, how much time do spend thinking about how bad the economy is?
How much time do you spend on researching what customers want right now and what your competitors aren’t doing right?
The money in this economy is not being made by watching CNN.
It is being made by getting closer to the customer in your marketplace and figuring out how to crush your competitors.
5 thoughts on “How to Spot Business Opportunities in a Recession”
If we only had more money,we could buy more merchandise. We have a great customer service and clients but not enough money to buy merchandise. We have tapped all financial avenues. So, how do we get money?
If your business is fundamentally sound and you have strictly an inventory financing problem (e.g., you have customers, they buy, you’re just perpetually out of stock), the usual solutions are:
1) fire sale the slow moving products to free up cash to invest in inventory of better selling products,
2) get inventory financing (try http://www.prosper.com if your numbers are good but risk-adverse banks won’t touch you),
3) cut inventory levels of all products (so you have less cash in inventory) and re-order more frequently (Wal-mart for example re-orders their stock daily to minimize cash tied up in inventoyr)
Victor, Totally right on this point, you can’t lay down and pray for a better economy. You have to overlook the gloom and doom and make things happen in whatever segment of the industry you are in. The mantality has to be that you are the business and that people come to your business because of YOU. My motto is the more I market myself the more money I will earn. “Always be helping someone.”
I saw a presentation at the Silicon Valley American Marketing Association early this year that underscores your point – Companies that kept their marketing budgets the same or at a higher level during each of the recessions since 1970 significantly outperformed their competitors during the recessions and continued ahead for two to three years following the recession.
Talking about opportunities in a recession it is not just growing through competitors’ customers. Over the past two years, I have been lucky to work with researchers here in Japan. These people go where no man has gone before. They create whole new products for markets where there is no competition.
I happen to market globally, so I can always find a new and growing market.
With in a recession or boom times, there will always be great opportunities.
Ron in Tokyo