Recession – Cost Cutting Exercise or Opportunity to Make Your Mark?

Not a long post today but it’s about a topic that I’ve discussed a lot of over the past six months so I decided today to put pen to paper on it just in case it can help any small to medium sized business owners out there.

Recession or any kind of slack economy is, in my opinion, a real chance for clever businesses to really lever themselves into an industry leading position. This is of course as long as they can keep cash flowing themselves!

The main reason I believe this, is that many of your competitors are cost cutting, thinking that’s the answer to the dreaded ‘R’ word. So while they are less prominent, you need to step up and take advantage. You’ll almost certainly be able to get better deals on marketing opportunities at these times too so make use of them. Get your name out there more than they are, and get ready to clean up on the business that is still looking for your products/services.

Another reason it’s a great time to ramp everything up is because some of your competitors will almost certainly disappear completely so make sure you’re ready to pick up some customers from those businesses that found things too difficult when they are looking for a new supplier.

A quick word of warning – recessions mean more new start-ups as people who are made redundant take the opportunity to set up new businesses, so just make sure your business is lean and ready to take opposition from younger, hungry companies. Just work out what differentiates you and be ready to tell everyone from the roof tops.

A slow economy is an opportunity for us entrepreneurs – work out how you can take advantage now :)

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  • http://workandplayblog.blogspot.com/ Jonathan

    Hi Al

    Interesting post, and I totally agree. I came across an article from Business Week magazine a few months ago which said that basically there are 2 strategies for a recession; you can either step up to the challenge (do something proactive) or step down (reduce costs and try to ride it our). It goes on to say the way to decide which strategy is right for your business is to ask 3 questions:
    - What’s the impact of investing in a ‘step up’ strategy?
    - Are temporary gains likely to become permanent, following the recovery?
    - What is the potential financial downside to a ‘Step down’ policy?

    My experience is that there are a lot of people following your advice. All the clients we’re talking to at the moment are launching new products or starting new businesses. I don’t know if that means there are ‘green shoots’ out there, but there are certainly quite a few positive businesses.

    • http://www.iambanksy.co.uk Banksy

      Thanks Jon,

      I really like the three bullet points you’ve added. I’m still not sure that reducing costs to ride it out is the right strategy but I guess that a lot has to do with which industry you’re in and what you can afford to do. Maybe its my personality but in my opinion, keeping costs tight is generally good business practice anyway, cutting services out that will help you attract more customers in the long term and help build your brand is the wrong way to go about things.

  • http://scottgould.me Scott Gould

    Al, good article.

    I always have considered the ‘go for it’ side of things in a recession – it is where the men are seperated from the boys, so to speak, and people can become successful as their competitors pull back on the budget.

    But I had never considered that this is indeed a time of prolific startups due to unemployment. You are one sharp thinker because I’ve never, ever considered that.

    I question, though, is how do you get people to see all this?

    • http://www.iambanksy.co.uk Banksy

      Not sure there is a way to get people to see it Scott other than trying to educate at every opportunity. Its upto passionate, forward thinkers like ourselves to spread that message, backing it up where possible with actual success stories and statistics so people don’t think we’re just selling to them.