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Why You Shouldn't Be Afraid of The Economic Crisis

If you’re paying attention to the media you know that we’re are headlong into some hard economic times. Banks are failing, investment firms are in financial trouble and the housing markets across the nation are suffering.

Things are so bad here in Michigan, the state with the worst economy in the nation, that General Motors is talking about buying Chrysler – the Big Three become the Big Two.

So are these such terrible time economically? For some, yes. For others, and I’m not talking about the extremely wealthy, no. But that’s not how it’s being talked about. If you just pay attention to all the Henny Pennys writing for newspapers, magazine and the web and listen to their banter on TV and radio, our economic sky is falling.

Now I’m not going to say that the U.S. economy is all good and well. Truthfully, it hasn’t been for at least two, maybe three or four, decades. At least since the early 70’s we’ve been loaning out our future and falsely inflating our economy. Just look at how housing prices and the cost of goods has risen since 1980. All this goes to say that we are, collectively, in an economic crisis here in the U.S.

But does that mean you are facing an economic crisis? Is your business suffering in the same way that Lehman Brothers or Washington Mutual Bank have? I don’t think so. These institutions are part of the reason the economy is where it is. You, on the other hand, are the reason there’s some soundness in the economy.

You see, small businesses are the backbone of the U.S. economy now. Can we compete with Walmart, Ford or Pepsi – no. But we don’t need to either.

I have a number of close friends that work for large corporations. Most of them are scared they’ll loose their job because of the economic conditions. But the other side of the coin is that I have a large number friends who are self-employed or own small businesses who are doing quite well – and plan to continue that way.

The difference? When you work for a large corporation you’re at the whim of Board and Shareholder decisions. These companies need to make huge sums of money to meet their massive expenses – including your salary and benefits. Ultimately, you have almost no control over any part of that how the company chooses to use it’s resources.

It’s in economic times like these that the small business owner and those who are self-employed have an advantage. The first advantage is that your revenue needs and the size of your expenses are much, much smaller than large corporations. Second, and perhaps most importantly, you have the flexibility to change strategies to fit the economic times. And third, you have direct control over the decisions and direction of your company.

Being self-employed or running a small business gives you advantages just not possible for larger corporations. Hence, if you’re smart, you can actually grow your business in times like these. Here’s a few suggestions on how:

  • Redefine and refine your niche market
    Even in great economic times, refining your niche can be the key to a lackluster business and an explosive one. Get clear on what problems you really solve for people with your products and services and make sure you’re offering them to the people who KNOW they want them.
  • Position yourself correctly
    Positioning is simple – what does your market believe you do. You can have the best products and services in the world and have a niche all to yourself. But if you can’t clearly communicate to that niche what you can actually do for them, in ways they understand and want, then you’ll likely find yourself struggling.
  • Spend less money and more time on marketing
    If you need to cut back on expenses, consider reducing your ad dollars. But only do this if you have a plan to replace what you’re spending in dollars with what you’ll be spending in time. For instance, word-of-mouth marketing is far more powerful than any ad, and can cost very little. Start with your current and past customers.
  • Look for opportunities
    There are opportunities for business all around you. By opening your mind – along with your eyes and ears – to new possibilities, you can reach into new markets or segments of your niche in ways that can make your more successful. Remember, being small, you can often turn on a dime.
  • Ask for referrals
    I mentioned above that word-of-mouth marketing is one of the most powerful forms of marketing you’ll ever use. So massage it along a bit by asking your most satisfied customer to refer you other people they know you can help. A good start is to ‘coach’ them a bit in how to share their story of working with you to the friends and colleagues they feel could benefit from working with you.
  • Give something away for free
    I don’t mean give away your services, I mean create something of value – a report, a workbook, an audio series, etc – and pass it around. It’s a great way to find yourself in front of new people who your materials can help. And if you knock their socks off with what’s giving for free you’ll have them thinking, “If (s)he gives that much for free, what will I get when I’m paying them?”
  • Get some help
    Sometimes the best money you’ll ever spend is contracting with someone who can help you make your business more solvent in times like these. Often a fresh perspective from someone who can help guide your ship can make all the difference between success and closing.

These are but a few ideas for growing your small business in tough economic times. Just remember, there are other folks out there that are doing just fine too. Some of them are looking for your solution to their problem. They just don’t know it yet. Help them learn it.

But please, don’t get lost in the media storm of fear. What they’re mostly talking about is corporations. Sure, it trickles down to all of us at some point. Yet it’s possible to come out ahead when times get tough. The biggest thing you need to do is tighten up the reigns a bit and focus on even greater clarity. And if you’re like most don’t expect to do it alone. Get help.

So tell me, how is the economy affecting your business? Is it hurting or helping – and why do you think it’s the case? More importantly, what do are you doing about it?

Let’s talk…

(note:  image from  brentbat on  Flickr,   some rights reserved)

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Comments

  1. Katie Radisson says:

    Were there is adversity there is opportunity so there’s plenty of opportunity just now :)

    Katie

  2. Maybe we needn’t be any more afraid now than at any other time; however, it’s naive to believe that small business can survive as before if big business does not. The state of the global economy dictates cash flow all around. If your customers are not making any money, neither will you.

    What we really need to do is redefine “success.” All the current popular talk of manifesting riches doesn’t serve us in the long run if money becomes worthless, and in truth, money is worthless! It’s just a symbol. The things that make us truly successful are not quantifiable in cash terms. I think we need to focus on our health, our families, inner peace, and all the rest of the things that we thought we wanted money for, i.e. happiness and security. Cash flow won’t give us those things. Staying happy, productive, and available will.

    The best we can do is to keep doing our best – in any economy! Let clients and prospective clients know you’re available and in service to them; face your fears and meet them with understanding; take care of your body, mind and spirit.

    Dawud, the suggestions you give here for the self-employed are good ones and they apply for all time.

  3. Katie,
    So true. It’s all in how you choose to deal with the adversity.

    Carol,
    Don’t you think people define success for themselves already? My own definition for success spans much larger than what’s in my bank account.

    And I’m curious about your perspective on how small business can’t survive. Short of a full economic collapse – for which we’d have a lot more things to worry about than making money – companies will survive this period of adjustment. And that’s what it is, I think. The dollar is way inflated, as are the markets and house prices. So an adjustment period is inevitable.

    But this is where small businesses can thrive. But it’s necessary to do more than just let your audience know you’re around. You need to clearly communicate how you can solve their specific problems. Moreover, to grow your business you need to meet them in the problems they are actively looking for answers for.

    Most business owners go about this backward – they find what they do and they try to communicate it to the people they think are interested. Yet another way is to understand the specific problems the people in your niche know they want to solve and attach your service to that. Small difference can lead to big results.

  4. Hi Dawud!.

    Companies are a bit scared to bloat up their staff, but if you have the skills they need many are seriously considering hiring consultants or workfor hire.

    I have been extremely lucky to have found work with two companies doing what I love – social media. Best part – they want me to stay home and work. Cheaper for them and seriously cheaper for me.

    But enough about me..

    Your advice is sound. Seth Godin just posted his two cents on this topic.

    Now is not the time to be scared or feed of the the fear that is being fed to us via the media.

    Now is the time for the ooportunist, the inventor and the inovator to fill in the cracks that the big companies are leaving behind.

  5. Laura Roeder says:

    “But only do this if you have a plan to replace what you’re spending in dollars with what you’ll be spending in time”

    I love this! Everyone knows that it’s not smart to cut back on marketing when you need more business, but if you have to cut the budget you have to cut the budget. I love that you offered an alternative. I think speaking and offering ebooks and reports are both great ways to get clients, and if you do both you have hit your market both offline and online.

  6. I’ve always felt this way about business, working for someone, especially a large corporation, is not very secure.

    That’s why I’ve chosen to take the route I am. At least one of the reasons.

    Thanks for the list, I’m implementing some as we speak!

  7. Great post ! Thanks for the suggestions. They are brilliant. Hope to see your update soon.

  8. Dawud, I’ve always done well in recessions… I’m a writer and I’m old enough to have lived through several.

    When I really think about it, I’m convinced it’s my own attitude rather than anything else (unless it’s the way I hold my mouth ;) )

    Sure there’s a lot of fear in the air, but I don’t have to buy into it. I can remember my true source, which isn’t my clients, but that thing I sometimes call God or the Divine or Source with a big S.

    The other suggestions work too.

    Thanks,

    Anne Wayman, now blogging at http://www.aboutfreelancewriting.com

  9. Great post and comments! Being successful and advancing your business during this potential recession is all about keeping a positive mental attitude, communicating your value, and getting your message out in front of the people that need to hear it.

    This viewpoint is very common across the blogosphere, especially in the niches of small business and SMM. It’s too bad that the major media aren’t listening.

  10. NIcely done. And a good time for all to think about some of the issues that you’ve raised here.

  11. Oops, all my comments got weirdly removed above except the last one. So I repeat:

    Peoples’ definition of success is scaring them these days – that’s what I’m hearing daily in my practice.

    You have written extensively about those others things that make you successful. Now would be a great time to reiterate.

    I never said small business can’t survive. I said it can’t survive as before. Those are important words. If you’d been a New Yorker in the aftermath of 9-11 you’d know exactly what I mean. Many freelancers I knew went out of business; when there’s no work, there’s no work.

    We’re in an adjustment period, yes, my point exactly – and that’s especially true for us small business types. What if the new economy means we have to be happy with less? Lower our prices, or accept barter? Broaden our niche? What would be so terrible if we didn’t survive as before, but thrived in a different way? Thus my emphasis on redefining success. It’s not all about the money anymore; it can’t be.

  12. Great stuff, Dawud! The large companies laying off thousands is what makes the news. I have read quite a few articles and surveys stating that small businesses are the backbone and still moving forward in this crisis. This is a great list of suggestions. Here is one of the surveys we wrote about a month ago: http://www.paysimple.com/blog/are-small-businesses-more-resilient/58.

  13. Great advice.

    On the upside, the economy has always been cyclical. A few months ago I was listening to a top economic analyst talk about the bad economy. He said that no matter who was president the economy would hit bottom early next year (2009) and then start making a slow recovery. Hopefully the recovery will be faster then what he said it would be, but still it’s going to get better eventually (unless the government interferes too much).

    We should definitely not get caught up in all the fear.

  14. Lovely post a great pleasure reading it.

  15. Excellent post. To me, economic crisis also means opportunities for a lot of us trying to get into certain types of niche.

  16. It is the testing time and we all have to make efforts to come out of this economic crisis. Yes big corporation find difficulty in such situations as the cost of every thing increases as the production level decreases to cover the cost the corporations opt the option of reducing the staff. Therefore self -employed people are on benefit side but i think they are always on benefit side whether conditions are good or adverse.

  17. Dawud,

    Honestly, I always looked the economic crisis as a new turnaround here, and I knew the economy will back on track one day in the near future…

    By the way, at least we still can enjoys a cheaper gas prices in this economy slump :)

  18. With Obama winning, i feel a lot better.. hopefully change can happen so this economy can change for the better.

  19. For those who work from home online, this is a time of many opportunities to provide others valuable information so that they too can begin to earning some kind of income online.

  20. Economics is the main part of the industries, and every one have to aware of the economics.

  21. My link is to my article list not necessarily an article in particular . That said I am doing what you mentioned and that is trying to position writings to help during economy crunch.

    We had economic downturn this last year working on our VOIP project, building up our ISP in AZ.

    The economic crisis has actually helped in some ways because Biz’s want to save 25-40% off their phone services. It is no longer just a nice savings it is a GLARING NEED TO SAVE.

    Thanks goodness we were able to already have the advertising ready to mail and a couple of volunteers to followup by phone. It is helping. Slow.

    We couldn’t’ afford to do a lot in advertising but you are right about doing more hands on marketing.

    I just wish I could convince all partners that putting money in now will pay itself off in a month or two. But we need to save and marketing seems to be most obvious place to do it.

    You write such great articles.. just wanted to let you know.

  22. Hi all,

    Happened upon this blog and found the conversation interesting.

    Why?

    Because it is current news.

    We are all affected by the state of the economy in the USA. Worldwide.

    Some more so than others. I work in a small auto repair shop in Northern NJ and have seen our business actually improve.

    I guess people are thinking “repair” rather then “buy” or “lease.”

    So, I’m thinking that if your business helps people through these tough economic times, you may very well prosper.

    I also have a little side business that has started to take off.

    i don’t know if any of you are familiar with Dr. Kevin Hogan but … well … anyway, he presented an article in his newsletter about having a side business in addition to regular employment.

    I think you’d really enjoy reading this article. He looks at the income and net worth statistics from 2007 as reported by
    “Uncle Snoopy Nosed Sam” (his term – LOL) and expounds on who is really ahead of the game.

    I think all you entreprenuers here would get a lift from this article.

    Hopefully, Dawud will allow the link to go through. Anyway – here it is

    http://www.ratraceexitstrategy.com/Greatest_Net_Worth.html

    Enjoy and know that all entreprenurial endeavor is a stepping stone to other entreprenurial endeavor. Opportunity after opportunity after opportunity.

  23. John Henn says:

    Mind blowing posts a pleasure to read.

  24. This is so enlightening. I have a small internet cafe and I must admit that the competition here is killing me.And I am on the brink of closing it but with your post, I might consider giving it a second chance.

  25. Olaf Neuigkeit says:

    I like your outlook on the “crisis”. The economic crisis doesn’t take small businesses into consideration, and is good news in some ways for small business owners. The news is only talking about these big corporations and investors. It is an unfortunate situation, but the backbone, as you said, is still in place, and I don’t see the economy falling too far, we just need to all have a little bit of confidence in the market.

  26. Tom Lindstrom says:

    Good post Dawud!
    The severe worldwide financial crisis is affecting everyone in some way or another.Now is the best time to get self employed, an internet based business would be the best option.

    You will have a huge worldwide market and by selling digital products, services or your own digital products you can work from your home with only a computer and internet access.

  27. Great post, an inspiring but realistic post.

  28. Lovely post but it is good.

  29. Great blog post; sometimes we just need some positive thinking to make things better. Psychology is half of the battle.

  30. Businesses that offer smaller services and products — the ones that are affordable — are going to be the ones that do the best through the economic crisis. People are going to stray away from major expenses. But, on the other hand, people and businesses still need, use, and want the little stuff.
    Small businesses are cropping up everywhere. What is needed are small businesses to help the small businesses. Sounds corny, but small businesses need writers and gophers and so on. This allows the business owners to focus more on the tasks at hand.

  31. This post is wonderfull. I like it. :)

  32. The Drunken Blogger says:

    you touches a very interesting issue,we need to reassert ourselves now that we are experiencing economic slowdown and i think your advice will somehow helps in pursuing a new direction on how to make more income

  33. It’s very interesting as I have thought about several of these points you have shared in the last few weeks and have actually put them into action on a few of my websites. I think that the redefining and refining of your niche market is probably the most important in these times.

  34. I seriously hope the economy turns around quickly with the election complete.

  35. I think in this crisis, a lot of people are taking some extra efforts to find other source of income besides their primary income, this situation could bring a lot of opportunities to small business entrepreneurs, this is actually the perfect time to catapult our business sky high.

    Best Regards,
    Sam

  36. One niche market that is growing considerably is SEO. Something to definetly to look into! Big market

  37. You are absolutely right…
    It is all about your attitude and home business owners or WAH’s are in the right place. We have an opportunity to focus on service. In a time when customer service is turning technical the WAH business owner can provide a the service that many people crave these days.

  38. First time Fathers says:

    I read your post and read the people who commented on it. I think it’s very helpful

  39. Brett Gian says:

    Financial crisis is not only a problem but also it is necessary thing of capitalist system. What will you do being afraid by the economic crisis? If you really want to solve the problem then you would have to analysis all the aspects of financial crisis. After this will find the answer of that question.

    Thanks
    http://mortgageprocess.wordpress.com/

  40. I just hope that Obama’s administration can help to ease the crisis, it’s not gonna be over in 1-2 years but let’s see.

  41. By far the most important point you’ve mentioned there in my opinion is “Position yourself correctly” – you can even have a reall bad website and do really well as long as you connect with your niche. You need to get into the mideset of those people who are going to be visiting and do what works for them. That’s why more success tends to come from sites where the webmaster is interested and experienced in the subject the website is about

  42. This is great post Dwaud. My Hubby and I are working to market VOIP in ISP biz. The economy is good for savings adn for selling OUR product, but businesses are so cash strapped it is hard to come up with 300 just to save a potentional 4,000 in 3 years. Car dealers, retailers and specialty stores have been taking it on the chin for months.

    I wrote an article about developing a sales approach linked into my Name entry I would love your opinion.

    I totally agree with your point o spending less money and MORE TIME on marketing. Time is money though, I noticed our main competition is putting their feet on the ground with flyer in hand, door to door. They hired a few sales people and fancied up the brochures and I know that they are struggling financially too. They must have hand a government loan!

    AT any rate I digress, I just wanted to applaud you for the second time on this insightful blog post.

  43. The current economic conditions may have negatively affected most inductries. however at the same time new opportunities are created. Businesses in poor economic conditions are looking for new ways to do business and cut costs. As such there is a demand for new innovative services that can achieve this. Web design and online marleting companies for example seem to be doing well.

  44. It’s honestly going to take other’s coming together and being helpful to one another. If you ask me…. Credit Cards are the culprits to the brainwashing thought that you can’t survive in America unless you have credit. Well what about those who choose not to have credit or as I say owe money to the “mob” where’s our kudos for being frugal and not spending outside our indiv. means.

  45. Open Up your mind and let the sun shining..:) Very nice post, thanks. Obama : yes we can..!

  46. business ideas says:

    Undoubtedly, there will be many people that profit from the current crisis. These “outside-the-box thinkers will succeed because they refuse to give in to the hopelessness that is so prevalent during an economic crisis.

    Finding the proverbial “silver lining” in an otherwise gloomy situation takes a different mindset.

  47. that is quite comforting to hear… since i am a little bit ‘paranoid’ about the current financial crisis… :(

  48. I think I can I think I can I think I can — (I love you more choo choo)

    I work at a small printing and mailing business in Birminham Alabama. 22 employees.

    We are affected, but it’s not detrimental.

  49. It’s like my mother was telling me. If you’ve got your shit in the market and you’re not touching it, you won’t have a problem. It’s the retirees that were counting on the market RIGHT NOW that are getting their asses kicked. I don’t need the money I have invested, so I’ll just sit and wait and eventually it has to turn in my favor.

  50. companies are a bit scared to bloat up their staff, but if you have the skills they need many are seriously considering hiring consultants or work for hire I have been extremely lucky to have found work with two companies doing what I love – social media. Best part – they want me to stay home and work. Cheaper for them and seriously cheaper for me.

  51. Excellent post ! Thanks for the suggestions. They were absolutely wonderful. Hope to see the update real soon.

  52. Great post! I’ve been looking for modification of loan, forbearance or refinancing and you’ve really helped out. Thanks!

  53. Auto Mechanic Karl says:

    I read your post and read the people who commented on it. I think it’s very helpful

  54. In addition to a finely defined niche market, a finely defined marketing plan is in order. When I give myself a daily list of 10 things to do to promote my business, it saves me from indecision and distraction. I want to know what path I am heading on, and what destination I am shooting for. Some of the things from my stockbroker days – 300 dials per day, and ask for the order. Close 7 times. Send information several times prior to presenting a sales opportunity. Build a relationship, not a sale. A sale buys once. A relationship buys again and again.

  55. Penny Gould says:

    Hi Dawud,
    I found myself grateful to you the other day. I’ve enjoyed reading your blog and soaked in some good advice to give small businesses the other day. At the last minute I was asked to represent the construction division of Caltrans (we build the roads and bridges in California) at a Small Business Fair. Our goal was to recruit Small Businesses to do business with the State of California. Our governor has mandated that 25% of all purchases made by the State be made with Small Businesses. After showing them how to register and get certified, we talked about their websites, getting listed in DMOZ and Yahoo Local etc, putting their website address on their business cards and on their trucks, and then how to give something away for free to meet people. For a lot of the construction companies I suggested they make a safety topic presentation at the big contractor’s sites to get to know them and hopefully be invited to be subcontractors. I picked up a lot from the teleseminar I took with you recently, it really helped me be useful to small businesses in California!
    Thanks!

  56. Crisis will be gone. Online business was help global economic. That’s our opinion.

  57. This is really good advice. I’ve recently started promoting my writing as if it were a small-business, and I’ve done surprisingly well, despite the economic downturn.

  58. Web Design says:

    Interesting post. Recession is still showing its effects and more in Europe now.
    Some good advice in this article. Thanks!

  59. With the economic crisis in full swing, more and more people are getting into the small business arena, many times due to the loss of their corporate job(s). I have also heard a lot of talk between my friends and family about buying locally and from small businesses. I think it is a trend that will continue. Twice in the last week, I have heard friends tell me about hand made items they have bought on etsy.com, a site where handmade items are sold. This is the time to get in the arena if you ever wanted to make/sell your stuff OR just become a small business owner.

  60. Car Hire UK says:

    It may well be a tough time but this is when real entrepreneurs can shine.

    By managaing their businesses and keeping costs to a minimum, it’s still very possible to be profitable.

  61. Some businesses are thriving in this economy because of they way they are marketing themselves and the products they offer. Items that save a customer money seem to be selling faster.

  62. You know it’s funny because I’ve done a lot of research comparing the differences of selling on Ebay vs. Amazon. I found that even though Ebay is known for offering the best deals, Amazon is growing because people enjoy their platform. Amazon has also gained the reputation of quality merchandise, even though they’re selling many of the same products Ebay does. I believe more and more that people will pay for quality, if a company makes the effort to stand above their competitors.

  63. This is so enlightening. I have a small internet cafe and I must admit that the competition here is killing me.And I am on the brink of closing it but with your posts, I might consider giving it a second chance.

  64. You make some really good points in this post, I think a good starting point for those with lower budgets is to work out what they can do for themselves on the marketing side and then hire the professionals for other aspects that they don’t have the expertise for. Many of our clients start by having us build a fantastic website and marketing the site themselves through facebook & twitter. Then subsequently when the budget allows they outsource this to us also

Trackbacks

  1. BDiC | Social Media - Build Community - Increase Business Profits says:

    […] the arrow to hear a welcome messageDawud Miracle has a terrific column this week on Why You Shouldn’t Be Afraid of The Economic Crisis. In fact, he points to several key strategies for growing your business in a time of economic […]

  2. […] Why You Shouldn’t Be Afraid of The Economic Crisis by Dawud Miracle… Small businesses may have some advantages over large corporations during these trying times. Dawud explains why and even offers some suggestions on growing a small business despite what is going on with the economy. […]

  3. […] Miracle lives in Michigan, and he tells us why we shouldn’t fear the economic situation. Every detail in his article is […]

  4. […] Why You Shouldn’t Be Afraid of The Economic Crisis by Dawud Miracle… Small businesses may have some advantages over large corporations during these trying times. Dawud explains why and even offers some suggestions on growing a small business despite what is going on with the economy. […]

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