Conventional “wisdom” says that when an economic storm comes in, you’re supposed to hunker down and ride the thing out.
I hate conventional wisdom.
By definition, conventional wisdom is what everyone agrees is the right thing to do. Conventional “wisdom” is really just another way of saying the thinking of the average person.
Well the average business in a recession shrinks. A number of average businesses are supposed to fail in a major recession.
I don’t know about you, but following in the footsteps of an average business kinda stinks don’t you think?
While hunkering down is the most popular reaction to an economic storm, let me suggest a far less popular (but much more profitable) alternative.
When a storm rolls in, rather than running for cover here’s what I suggest:
Get out into the storm and start selling umbrellas!
Sell extra food supplies, batteries, flash lights, rain ponchos, spare water bottles, backup power generators, and all kinds of other stuff.
There is money to be made in any economy–good or bad.
There are always winners. And there are always losers… always!
In this worst economic crisis since the Great Depression, our economy will shrink by about 5%. While this is 5 times bigger than the tiny 1% shrinkages of our last two recession, purely on math basis 95% of economic spending still remains.
So instead of $14,000,000,000,000 in spending we had a year ago, this year we “only” have $13,300,000,000,000. That’s 13.3 trillion for those who go dizzy trying to count all those zeros.
Even after the recession shrinks our economy, we will have an economy that’s still larger than that of China, Japan, United Kingdom, and Germany (the next 4 biggest economies)…COMBINED.
How much of that 13.3 trillion pie do you really need to make your goals for the year?
Forget about riding out this economic storm. Be bold. Get some courage. And get out there are sell stuff to those who want to ride out the storm. That’s where the money is made.
Examples:
- Sales of dvd rental services like Net Flix is up 23% versus last year.
- Sales of romance novels, science fiction, and fantasy are all up versus last year
- Sales of brew it yourself coffee beans are up 5% from last year
- Sales of seeds (like the kind you plant in the ground to grow your own vegetables) are up 25%
Notice the theme?
People who can’t face economic reality hide in fantasy and escapism… thus fueling the sales and profits of those who can.
Sure fewer people are paying for $4 Starbucks lattes, but it doesn’t mean they’ve stopped drinking coffee does it? They just make it at home. Money is being made in coffee right now.
Can’t afford to buy groceries, take advantage of all that dirt in your backyard and grow your own. But you gotta buy seeds. Guess what, someone is smart enough to be selling them right when you want them.
In a recession, money doesn’t disappear, it just gets spent differently. (Write that line down)
Duh, go follow the money!
It ain’t rocket science.
That’s my thought for the day.
On a personal note, I’m heading out to the airport later today to fly to New Orleans (ironic given my choice of topics for today’s email). I’ll be giving a speech at the Fortune Magazine Small Business Sales & Marketing Summit. Conventional wisdom says you’re not “supposed” to grow your business in a recession. Well, so much for conventional wisdom.
If you’ll be attending, be sure to stop by and say hi. I’ll be sitting at the speakers table for most of the event.