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Playing To The Recession's Strengths

Marc Tracy bizbox.slate.com

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June 25, 2009

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When we advise you to take advantage of the recession, and play to its "strengths," as it were, we should note that it's not really as though you have a choice. You don't live in a world where the economy is booming and consumers are spending freely. It's not "try to play to the recession" vs. "try to maintain business as usual". The only alternative to the first option, rather, is quite possibly to go out of business.

Which is not to say there aren't very real ways to let the recession improve your business. When we talk about the recession actually being good for small businesses and likely to lead to an increase in entrepreneurship, we're not kidding. Big think has a sweet post on this subject. "The recession is a fantastic time to strengthen your business—and ultimately be more successful," the author writes. "However, to make use of the recession, we must embrace the new set of restraints and other challenges that come with it. Rather than just tolerate these dire times, we must run with them."

Basically, the recession affords you the invaluable opportunity to slim down and renew your focus. It also--and this is something we've pointed out before--creates a much lower cost of failure (because success is not nearly as big as it is during boom times), creating a more conducive environment to the sort of smart risk-taking that really strengthens businesses in the long run. In sum, the recession will force you to do the sorts of things that will both get you through it and then leave your business healthier and stronger than ever when the recession ends--leaving you well-situated to enjoy massive success once things pick up again.

Meanwhile, if you want more specific recession-business clues, whom better to talk to than Wal-Mart? The New York Times does, and the results are intriguing. You already knew cheap was in. But more specifically, being at home is in, as vacations are currently prohibitively expensive (luggage sales are down; sales of nice flat-screen TVs are, believe it or not, up; popcorn poppers are selling through the roof). You knew new cars are down; but repairs, and items such as spare tires, are, correspondingly, up. (Indeed, we've noted before that many industries that are thought of as "recession-proof" tend to be dominated by small businesses.) Another fun fact: despite lower consumer spending, sales of vitamins are way up--because the cost of missing a day of work just got a lot higher, as did the cost of going to the doctor and having to buy truly expensive medicine.

Which is not to say you should immediately change whatever your business is to a discount-health-food-store-that-also-sells-car-paint. It is to say that you should be thinking along these lines. Consumers are acting differently than usual, but they are also acting fairly rationally. Mere common sense should lead you to some pretty accurate conclusions about their likely behavior.

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