The expectation of economic recovery has investors breathing a sigh of relief, and the stock market (S&P 500) has rebounded 19 percent over the first three quarters of this year. Yet from an economist’s viewpoint, recovery means only that the economy has stopped contracting and is now growing, no matter how anemic the growth. It does not mean that business sales will soon recover to previous highs. Why? Because unemployment is likely to remain high for the next few years.
So how do you position your company if you are starting to see some stabilization in sales and renewed customer inquiries?
First, do a damage check. Are you still profitable? Are most of your savings intact? If so, now is the time to think about improving your competitive position. A March 2009 Harvard Business Review article, “Value-for-Money Strategies for Recessionary Times,” describes how, during the Great Depression, corporations like General Electric, Kellogg, and Procter & Gamble “outmaneuvered rivals to become leaders.” When the economic chips were down, these businesses stepped up, adjusted their strategy, and widened the gap between themselves and their competitors.
While each business needs to carefully examine its circumstances, those that have eschewed debt and are conservatively managed have been handed a golden opportunity. Here are some strategies that you should consider:
Strategically beef up your marketing efforts. Smaller and mid-sized businesses can capitalize on the restructuring of larger competitors. Restructuring often breeds organizational confusion, missed opportunities, and a decline in customer satisfaction. Their pain can be your gain.
Consider an acquisition or expansion. Loans are available at low rates if you have excellent credit. These are the times when the conservative businessperson with a strong organizational infrastructure has the greatest advantage. Just be sure that you are buying a business with solid revenues.
Make room for good people. The recession has dumped highly competent workers onto the job market and stymied talented young people. Bringing on a talented person or two, even if it’s initially part-time, can re-energize your business. Restructurings have made many talented employees unhappy. If your company looks like a safe harbor in the storm, you may get some terrific employees to jump from your competitor’s ship.
Work on improving key processes. Cross-training employees can improve processes because a new set of eyes is looking at what has become rote for someone else.
Visit with your clients or customers. Take them to lunch. Find out what they feel is “most important now.” There may be opportunities that you are missing.
Take advantage of local resources for networking. The Eugene- Springfield area has many fine programs. It will broaden your sense of local business opportunities.
While pessimism is understandable, some of the best opportunities arrive when the fewest people are ready to meet them. To fully embrace opportunity, you must look outward while most others are preoccupied with looking inward.