How to survive and thrive in a recession

Seems like every time you turn on the radio or TV or pick up a newspaper — there’s more bad economic news. Europe is a basket case, the USA is in trouble and China is slowing down! All of which means ultimate gloom and doom for Australia - right?

It’s difficult not to get caught up in the negativity but we need to put it in perspective. Firstly, Australia is not in recession and we really are in a much better position than most other countries to weather the storm. And even if we do slip into recession, it won’t be the first time and I’m sure, it won’t be the last.

In fact, Australia has had several major recessions in recent times. In October 1987, the stock market actually dropped by 22.6 percent in one day, which was actually larger than the collapse of 1929! Then, there was the “recession we had to have” in 1990, courtesy, Paul Keating. Not only did we have a recession but the mortgage rate was 17 per cent and many loans to businesses were well in excess of 20 per cent interest. You might wonder how on earth any business survived that but we did. Trust me — I was there!

Having been in business for a long time, I got to thinking about previous recessions and what we did to survive them. At the height of the 1987 stock market collapse, I started Australia’s first successful small business magazine, Australian Small Business Review. It not only survived the worst recession since the Great Depression, it went on to be a great success and eventually, it was bought out by a large publisher.

Was that because I was particularly smart? I don’t think so. It was probably more because I was too naive to realise there was a recession on and it really wasn’t a good time to start a new venture.

Fact is, most well managed business will survive a recession and the smart ones will even thrive. The main thing we have to fear, is fear itself. I’m reminded of a wise old story that did the rounds of the last recession (and probably the one before that!). It’s worth repeating:

A man lived by the side of the road and sold hot dogs. He was hard of hearing so he had no radio. He had trouble with his eyes so he read no newspaper, nor did he watch TV. But, he sold great hot dogs. He put a sign up on the highway telling how great they were. He stood by the side of the road and cried, “Hey, You, want to buy a great hot dog?” And people came and they bought.

So, he increased his meat and bun order. He bought a bigger stove to take care of his trade. Then, one day his son came home from University to help him. His son said, “Dad, haven’t you heard the news about the recession? The economy is really bad. The unemployment situation is terrible. The energy situation is worse.”

Whereupon the hot dog man thought, “Well my son’s been to University. He reads the newspapers and listens to the radio, he ought to know.”

So the father cut down on his meat and bun order. He took down his advertising signs. He no longer bothered to stand by the side of the road and yell, “Wanna buy my hot dogs?” And his hot dog sales fell almost over night.

“You’re right son,” The hot dog man said to his boy. “We certainly are in the middle of a bad recession!”

THREE TIPS TO RECESSION PROOF YOUR BUSINESS

1. TRAIN or RETRAIN

Become more of an expert in your field. Knowledge really is power. Learn new skills — expand your areas of expertise. If you employ staff, consider enrolling them in courses or sending them on seminars. The more you learn – the more you earn!

2. EXPLORE NEW MARKETS

In every tough market there lies opportunity. Study new market opportunities, new products or services, especially those that bloom in tough times. Remember, a lot of business do better in a recession than they do in normal times.

3. PEP UP YOUR ONLINE MARKETING

As things tighten up, more people go online to shop. Lots of online companies are doing really well. Maybe it’s time to look more closely at your online activities. Upgrade your website, provide a regular newsletter, write articles, start a blog, use email marketing to stay in touch with your clients.

Make sure you deal with companies that are in a strong financial position to weather any downturn. Stay positive and mix with positive people — not gloom and doomsters— they only pull you down. It’s important to remember — tough times never last — tough people do!

Let’s all stay positive — and please contact me if I can help.

Peter Thorpe