Thriving In a Dying Economy: Your Small Business Can Do It
It’s official: Everyone agrees that the last 10 years have been an economic nightmare. People everywhere are tightening their belts and stocking up expecting the worst over the next few years. And the worst may come, if the folks in Washington don’t get their act together. But all this is big picture. Let’s shift the focus to our own businesses. How much can we do to hedge against the future when we are still struggling to make it through today, right? The truth is, there is a lot of opportunity in a down economy. Here’s why.
The trick is to tighten procedures and lay a strong foundation for your company. If you can push forward with all your might now, when the economy opens back up (which it will eventually), you’ll be king of your industry.
For example, Coca-Cola did this to great effect during their humble beginnings. They were not always the staple brand that they are today. Coca-Cola began as a simple medication that a pharmacist created. It took decades for it to take hold, but the real break came during the decades of the 1920s and 1930s — some of the darkest economic times on record.
Coca-cola didn’t do anything particularly different. They just kept trucking onwards, relying heavily on advertising when their competitors were cutting costs because of the depression. They worked hard to reach out and grab customers and establish their brand. By the end of the depression, not only were they king of the soft drink world, they were practically the only contender for the title left. They grew steadily, and have continued on that trend ever since.
In light of this, there are a few things to take to heart:
First, a down economy is the most important time to push your business and grow.
Many small businesses fail simply because the founder doesn’t have the energy and/or structure to keep driving forward. Much like when I’m at the gym sweating it out on the cross-trainer — the pain doesn’t last forever. But if you push through the tough spots, you’ll eventually reach a point where you are lean, healthy, and stronger than those who quit.
Everyone else gave up and went home, but you stuck it out, and because of that you’re reaping the massive rewards: all the customers of everyone who went home.
Second, a systematic approach to business is vital to success.
You’re at a point in time, where if you can make a system that makes your business grow slowly in a down economy, when the economy turn around, you’ll grow quickly. This is trial by fire for your business model.
I always recommend reading The E-Myth: Revisited to learn more about how to tackle creating a solid foundation for your business.
Third, Your Competition is Fragile
They don’t have the strength they once had to fend you off. Your advertising can carry farther than it once did. Your competitors are fighting against clients who won’t pay or want out of contracts, they don’t notice the little guy who is growing up and chipping away at their business. Even if they do notice, there isn’t much they can do about it.
The beauty of recurring revenue is that you have less to worry about. While standard IT companies are searching for new contracts in an economy that has few to offer, the contracts that you get are indefinite in length. Your business is growing, their business is surviving (maybe 😉 ).
Fourth, Customers Need You
As IT businesses lapse or are embattled by the economy, their customers are firing them but still require IT service. We live in an IT driven world, and so the need is always there for those who are smart (read: persistent) enough to find it and grab it.
There is also opportunity to buy businesses out for their customer portfolio and employees if you have capital to invest.
Finally, Inexpensive Talent is at Hand
More people are out of work now than even during the Great Depression. There are tens of thousands of people graduating from colleges across the nation, only to move home because they cannot find work.
If you’re growing at this time, you can snag talent for less than the going rate. As always, any salary is preferable to no salary. So you have an opportunity to invest in the growth of your company at a lower cost, with better people.
You are working with a unique and highly profitable business model in a time where you have a chance to make a huge difference in the success of your company. Plan smart and work hard and you might find yourself the next Coca-Cola of the IT Services industry. Throw your hands up now and you’ll be giving up the chance of a lifetime.
Dan Kolansky is director of sales and marketing for Virtual Administrator, which helps IT organizations identify and seize recurring revenue. Virtual Administrator provides training and resources for MSPs to establish programs in remote management, backup and constant data protection, SonicWall networking, helpdesk and hosted Exchange services. Monthly guest blogs such as this one are part of MSPmentor’s annual platinum sponsorship.