Black Friday 2008 has just barely come and gone, and already the pessimistic news for retailers is flowing in. Anecdotal evidence here in Orlando suggests that consumers are scaling back this year, due in part to what many fear could be a long and protracted recession.
It’s so bad, it seems, that even kids are sharing their economy woes with Santa, asking for things like a new job for Dad or money for Mom to buy the house back. (Sounds like Santa’s list is going to be a little tougher to fill this year.)
But is it really all doom-and-gloom? As a small business owner, should the current economic situation make you pull back, or should you use this as an opportunity to forge ahead? Consider this:
Of course, what matters to you is not whether we’re technically in a recession or not, but how your customers are behaving. If they’re scaling back you may feel you have no recourse but to do the same.
But perhaps a better course of action – for some businesses, at least – would be to scale UP. Perhaps this is an opportunity to reexamine your business, figure out what works and what doesn’t, and implement a plan that will allow you to grow even if we are in a recession.
Don’t think it’s wise to try to grow your business during a time of uncertainty? Here are a few reasons you might want to reconsider:
Competitors will quit. If your business has low barriers to entry and is relatively profitable, your competition may have drastically increased during the recent flush times. (Yes, I’m talking about you, realtors. But also any business that doesn’t require considerable capital – financial or otherwise – to start.) A downturn will almost definitely push some of them out of the market.
Your remaining competitors may scale back. Watch for signs that your competitors are cutting back on marketing. Don’t see them at the top of the Google results any more? Now may be your chance to supplant them and get the edge.
Customers behave differently. Earlier this year, an article in the Wall Street Journal noted that the number of consumers who had finalized summer-vacation plans for the year was less than half what it was in the preceding year. For a travel company or tourist destination, that means you need to adjust your messaging and maybe even your target market. Your industry may adjust in other ways, so you need to understand what makes your customers buy NOW, not what made them buy last year.
There are opportunities to try new things that don’t cost a lot. Not doing email marketing to keep existing customers? Maybe now’s the time to start; it’s inexpensive and effective, and you probably should’ve been doing it long ago. Social media offers another alternative for some businesses. Talk with a consultant or evaluate the options yourself to see if your customers are using social media and if there’s a way for you to engage with them there. (Don’t, however, jump in without a good analysis and a strategy.)
Businesses who set themselves up to thrive – recession or not – will be in the best position to succeed going forward. Isn’t that what you want for your business?