I don’t have to remind you that our economy is in a completely different place from where it was two years ago. We’re currently dealing with a recession, which if nothing is done quickly about, could move into a depression stage.
The current recession is not unique to the Liberia and Nigeria which seem to be the current two West African countries deal with the phenomena. Many other countries go through such period all the time.
As a business owner, you’ve begun to already feel the impact of the current recession. Depending on the market you serve, you may be experience slower sales; which will translate into lower profits. When these begin to happen, as they likely have for you, there are two routes that you could choose to take.
You could join the band wagon of people who are focused on how bad the economy is, and continue to whine all you can, or you can be like the many entrepreneurs who have become wealthy during the other recessions and depressions in history.
Since we take cues from the United States in much that we do, let me call your attentions to the fact that more Americans became millionaires during the great depression of the 1920s than at any point in the U.S Economy before the rise of the internet.
This means that all is not lost; and for the high performing entrepreneur, this is actually a time you when you could double, triple, or even gradruple your business.
Over the last fiew weeks, I’ve been researching ho many of these people becomea millionaires duing such tough times, I’ve identified some strategies that helped them. Any smart business owner in a coutry going through a recession can learn from these strategies, and position themselves for even greater success.
Strategy One: Spend More:
At first glance, the idea of spending more money during a recession may appear counter-intuitive. The common advice you hear during such times is to conserve as much as you can; and for an ordinary consumer, that is true. But for what it worth, that advice may be too general to be applicable for you as a business owner if you’re going to thrive.
Here’s what I mean:
There are really only two ways you could go about spending money: Invest or Consume.
When you consume, you’re taking money out of your bank account to be used on something that’s NOT going to put that money back. So when it comes to consumptive spending during a recession, you want to limit that to the bare minimum. There are a number of things you can do help reduce your consumptive spending.
The type of spending you will need to do more of however, is investing. When it comes to investments, they are productive. They have the potential of increasing your business’ cash flow and bottom line. Investments put more money back into your bank account.
As a smart business owner or manager, you should be thinking about how you can invest more in to your business such that it provides the greatest returns on the investments. This is especially true during down economies.
Sometimes, investing more in to your business will mean that the business may even have to borrow money from external sources as a far cheaper price.
So what are some of the great areas for investing in a business during tough economic time?
I suggest you start with Marketing.
By ramping up your marketing, you’re taking advantage of an opportunity to gain more market share.
During a recession, businesses become more value conscious. They begin to pay more attention to quality. During recessions, consumers become more conscious of value for money.
So let’s assume you sell a great quality product, it will serve you best to invest more in marketing so you can highlight the quality of your product. It will be even more helpful for you to invest in Educative Marketing – a form of marketing which focuses on educating your customers on the best ways to solve their problems, and why your product or service is the best solution.
The real pleasure you get from increasing spending on marketing during a recession comes after the recession, when the economy starts to boom again.
Because of the work you would have done during your marketing, customers will see your products as the best choice out there. Period.
Now, you have to bear in mind that I’m operating under the assumption that you actually do have a great product or service.
Let me share with you the most basic example I could find so as to make this more practical.
Let’s say you sell disposable diapers for babies. Now, you know that when it comes to these disposable diapers, mothers are concerned about two things: Comfort on the babies’ skin, and the ability to absorb wetness for longer period of times.
In the diapers market, there are bigger, more established brands that may or may not be more expensive. If your lesser-known brand can also boast of the quality and comfort, you could launch a marketing campaign targeting mothers by saying something like this in your message:
XXXXYYYY diapers keep your baby comfortable and dry for up to 10 hours. Get a pack of 40 pcs today for only $8.00.
A simple message like that can begin to get you more sales almost immediately, and guess what? If your product does as claimed, you will be have happy new customers who will gladly send you referrals long after the economy has recovered.
Can you begin to see how increasing investments in your marketing during a recession like the one going on in Nigeria and Liberia, can help transform your business?
If you need help uncovering the specific marketing approaches to take during these times, you can get in touch with me, and I’d be more than happy to help you create something spectacular.
Strategy TWO: Invest in Your People
The next most important place you’d want to invest in your business is in the development of your staff.
Even during good economies, many business owners mistakenly consider training to be an expense. Nothing could be further from the truth.
Training, or other forms of capacity building, is one of the best investments you can make in your business.
I guess the reason many people don’t see it as such is because they have no idea how to calculate the return on training investments. Here’s an article I wrote a while back that teaches you exactly how you can calculate return on training investment.
So when most businesses are cutting back on investing in their employees during an economic downturn, wise business owners are doing just the opposite. Those that thrive go beyond just training, and actively look for innovative ways to reward the efforts of their people and to keep them inspired and passionate about coming through the downturn shining.
And the funny thing is, these investments don’t need to cost a lot of money either. In fact, the most effective investments cost nothing more than a little time and some thought.