6 ways to weather an economic downturn
Unless you have been living under a rock you will realise that Australia is in the grip of an economic downturn. Yet according to a Flying Solo poll, most of us see negative talk on the business outlook as ‘boring’ or nothing to worry about.
A significant minority of 28% in fact did admit to being worried about the economic downturn. I am one of them.
I was surprised at the poll’s results and wondered why more of us aren’t concerned about market forces that might curtail our livelihoods. Through talking to other soloists and reviewing what business commentators are saying about the economic downturn, I concluded that it’s because we are yet to feel its full effects.
As business confidence wobbles, capital is harder to come by and consumers stop spending. The companies we do business with start looking inwards. For soloists, that can mean projects are put on hold and opportunities are thinner on the ground.
Soloists I talked to for this article commented that given the uncertain economic outlook, prospects are becoming commitment-shy. Personally, I find I’m less concerned about what other proposal consultants are up to than I am about the idea that prospects may simply stop seeking outside help.
A wise business mentor once told me ‘the best job security is the security you create for yourself’. I think this is true in any economic environment. With a softening in the jobs market, and with listed companies facing a ‘horror reporting season’ (see note), now isn’t a marvellous time to seek solace in the arms of a corporation. Just in case you are contemplating chickening out in favour of a day job.
So what is the answer for solo businesses?
"A wise business mentor once told me ‘the best job security is the security you create for yourself’."
I think it’s planning. If we establish defensive measures now, we will be ready if and when this wobble turns into a full-on slump. Here are a few ways to weather-proof your business against the looming clouds of an economic downturn.
Want more articles like this? Check out the performance section.
1. Review your target markets
Geoff Kelly, a leader influence consultant I spoke to, believes that not enough of us “spend enough time targeting the right niche”. Kelly has shifted his focus from small-to-medium clients to those “more medium” sized. The risk-averse could consider government clients, if the offer suits, as government will always pay its bills.
2. Adjust to short-term thinking
Expect prospects to be tight with time and cash and don’t take it personally. Try improving something they already have or do, rather than selling something completely new. Accept smaller projects.
3. Adapt your offering to what customers want now
Talk to your customers and find out how the economic downturn is affecting their business. Come up with ideas, products or services that will solve the new set of problems. Always be relevant.
4. Be smart about keeping your customers
Turn that long-term handshake agreement into a monthly retainer for regular work. Incentivise repeat business by offering extras without devaluing your core offer.
5. Widen your new business net
Sharpen up your market presence – revamp your website, or get one; revisit your customers for testimonials; talk up the value customers get from you as opposed to competitors. Shelve brand-building in favour of marketing campaigns that get an immediate return. Ask existing customers to refer new ones. Think about how you could do business with customers based interstate or overseas.
6. Know and respect your value
Shawn Price, an independent career management consultant, points out that we ‘independents’ can be attractive in an economic downturn because we can offer more expertise, more flexibility and a lower risk and level of commitment than full-time employees.
Flying Solo is a huge community of savvy business owners and every one of us needs to find our way through this. So let’s see what we can come up with. Post your comments and ideas and let’s weather this economic downturn together.
Note: The Australian, Fears grow as corporates face a horror reporting season, Lisa Macnamara, August 2 2008