If you follow the financial news at all, you can’t avoid the talk about an impending recession. But for small- and mid-sized businesses, the news doesn’t have to be all bad. Companies like Uber and Airbnb (and PEX), launched during the great recession of 2008-2009. Motorola and Dairy Queen launched during the last century’s Great Depression.
Here are 21 ways that these companies used those downturns to become leaders. And what you can learn from them.
- Your Flexibility is Your Edge: You’re smaller. You can move quickly. If the changing marketplace presents an opportunity, you can seize it faster than your larger competitors can circulate a pitch deck.
- You Can Move into New Businesses: You know what you do best and where the opportunities lie. You can create new products or services and seize and profit from those markets before anyone even knows they exist.
- Abandoned Markets Are for the Taking: When your larger competitors cut back, they often have to abandon businesses that don’t contribute enough to their bottom lines. But those businesses can still make a difference in yours. Move in and take it.
- Turn Core Strengths into Key Advantages: What does your business do better than others? Use the downturn to develop and strengthen it. You can emerge from the downturn as a leader nobody can beat.
- While the Competition Sleeps…: Your competitors may be more focused on finance than growth during a downturn. Leaving markets wide open for you to conquer. When they scale back, you can push forward.
- Lifelong Customers for the Taking: If you turn up the volume on customer service when everyone else is turning it down, customers will notice. And when there’s more money around, they’ll send more of it your way.
- Remember, Quality Is King: Ever notice how costs go up and quality goes down when the economy sours? That’s a chance to zig when everyone else zags. Invest in quality now, you’ll be stronger and more competitive when things turn around.
- New Pivot-ability: A hockey legend once said, he doesn’t focus on where the puck is, but where it will be. If you see your industry going in another direction, you can reallocate resources and get there first.
- Capitalize On the Need for Value: Penguin books launched during the great depression, making authors like Agatha Christie and Ernest Hemmingway affordable to the masses. During tough times, there’s a need for value in every industry. Find yours.
- Innovation Knocks: Few people remember that Apple launched the (then) iconic iPod and Google became a verb during the early 20th century’s dot-com crash. Companies that innovate when times are tough often become leaders when times get good.
- Find a New Niche: Large companies have to focus on the largest of mass markets to make a difference. That leaves openings in small, specialized niches. Products and services that meet these needs can be profitable if serviced. Take those opportunities.
- More Advertising for Less Money: Advertising is one of the first cuts companies make in a recession. That means you can spend less money and get more exposure. People who learn about you when times are tough will know about you when times are good.
- Your Staff Can Become More Loyal: Studies show that employees who feel appreciated perform better than those who don’t. If you invest in benefits, training, and culture when everyone’s cutting back, you’ll build the best, hardest-working staff in your industry.
- There’s a Bigger Talent Pool to Draw On: Companies don’t just trim fat during a downturn. There’s often a lot of underutilized muscle on the market. Now you can attract that talent, build a diverse workforce, and put their strengths to work for you.
- Sustainability can Be Another Advantage: Again, a lot of companies are just trying to stay afloat. If you can establish and promote your sustainable practices, while competing on quality and value, you gain another advantage over your competitors.
- Lower Costs, Higher ROI: Generally speaking, when business is tough, the buyer is in the driver’s seat. Recessions are good times to negotiate leases, make capital purchases… and cut deals on all your needs
- New Financial Discipline: Nobody expects you to overspend during a downturn. If anything, people will understand cost cutting. Take the opportunity to prioritize cash management and make smarter resource allocation and investment decisions.
- Time to Refine: When times are good, you’re too busy running your business to find what’s working and what’s not. When things slow down, you can look at your strategies and operations. You can more easily find areas for improvement and make changes.
- Productivity is On Sale: During a downturn, every vendor wants to deal. You may now be able to afford those new tools or technologies you’ve been wanting to bring into your business. And you’ll also have the time to implement the processes.
- Your Community Wants You to Succeed: If you’re a local business and you support the local community, the local community will support you. Be a good neighbor and your customers will be good neighbors, too.
- Let’s Make a Deal: When times are good, everyone wants to go it alone. When times get tough, mergers, acquisitions, and strategic partnerships get easier to negotiate and consummate. Synergies born from necessity now can pay off in profits later on.
Of course, you don’t have to wait for a downturn to gain better control of costs, cash management, and expenses. From real-time expense management to built-in spending limits, PEX helps position you for long-term success in any economic climate. Request a demo today.
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