A Rising Economy Floats All Boats – Be Ready if There’s a Storm
by Larry Slusser on January 15th, 2008
You have probably heard the saying “a rising economy floats all boats.” The business metaphor of course refers to the fact that when business is good, even marginal business owners make money.
There is another saying that is not quite G rated enough to share in earnest, but it relates to the fact that you don’t find out the color and style of swimming trunks those around you are wearing (or not wearing as the case may be) until the tide goes out. The point being that when the economy goes south, those in business can be exposed.
It is possible for a marginal business owner to do really well in a strong economy. Conversely, it is possible for a strong business owner to do poorly in a weak economy. How can you ride the wave (so to speak) and make good money in a good economy, and still make enough money in a not so great economy?
The 3 things you as a business owner can do to help insulate your business from a down economy:
The first thing you need to know to succeed in any economy is your business. That may seem oversimplified, but you need to be the expert on your business. How is your industry doing? How does it do in different economic conditions? Is it seasonal at all? Dependent on the interest rate? The price of gas? The cost of shipping? If you don’t know the answer to these questions, you need to get to know them soon.
The second thing you must know if you are going to succeed in any economy is your customers. What do your customers want? Are their needs changing? How is their business doing? How do the factors hitting your business affect them and their business (if they are in business)? If you’re in retail, what are your customers’ buying habits and patterns? Is it seasonal? How does marketing affect their purchases?
Again, if you have no idea about the answers to these questions you need to spend more time thinking and studying your business. There are people so busy working in their business, they don’t spend any time or effort working on their business. You have to make time to study your industry, your business, and your customers. If you don’t, who will?
The third thing you can do to becoming resilient in any economy is to create your own economy. Yes, create your economy. Develop such a loyal following through superior customer service that customers will buy no matter what. Have a product or service that is so valuable, your customers will purchase it and keep purchasing it no matter how bad the economy or how great the competition gets.
While no business is ever fully insulated in a tough economy, by following these three steps, you can at least get the point where you don’t feel so exposed when the tide does go out…..