I can pick winners and losers. As the Great Recession continues to stumble along, more and more businesses are finding that there is just no more fat to be cut. Many have pared back, cut down, reduced expenses to next to nothing, and are just holding on … hoping and wishing.
Bad news: These aren’t the ones who will survive. I have been watching businesses as they respond to today’s ridiculous economy. Here is what I am seeing:
The winners will be those who have all along kept right on investing in growth and innovation. They were doing it long before the recession hit, are doing it today, and will keep on doing it in the future, long after the recession is history.
They dedicate X percent of revenue to expanding into new markets, bringing on board new equipment, updating their marketing and sales techniques, investing in money-saving technology, adding new products and means of production. These are the companies that invest in themselves.
Many of them are prospering now – yes, right in the middle of the Great Recession — even while their competitors are closing their doors. Just as important, when the bad times end, they will be positioned to expand market share, partially because they are among the handful of survivors.
The losers are the ones who have looked only to cut back and hunker down. They cut back on training, cut back on product innovation, cut back on sales and marketing, cut back on inventory, cut back on staff. They have a hunker-in-the-bunker mentality.
These companies are just hoping the bad times end soon. In the meantime, they will shrink and weaken and, very possibly, close their doors. If they survive, they will be the struggling, out-of-date dinosaurs compared to their competitors who kept on investing and planning during the recession.
What you need to do: No one knows when the Great Recession will end. It doesn’t matter. There is always money to be made. So, climb out of the bunker and look for meaningful ways to strengthen your business. Don’t just keep paring it back and hoping for the best.
Is there a new process that will reduce production expenses by five percent or distribution costs by three percent? Is there a new product line that will fill a growing market niche and boost revenues by four percent? Is there a key potential employee who can help you update your thinking and tap into a new market or help you make the technological leap into the Twenty-first Century?
Good luck. These are tough times. Still, that’s no reason to sit back … or worse, bury your head in the sand.
As always, work hard, make money, have fun … and keep on investing in your business.
John R. Ingrisano
The Freestyle Entrepreneur
The Freestyle Entrepreneur – winner of the 2010 Top 35 Entrepreneur Blog awards from OnLine MBA. John Ingrisano The Freestyle Entrepreneur 209 Church Street Algoma, WI 54201 (920) 559-3722 www.TheFreestyleEntreprenuer.com
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