GlobalBX

Shaky Financial Times
Some news pundits have described our current dire economic circumstances – not literally, perhaps, but in similar tone – as if the Great Depression of the 1930s was paired with Europe’s suffering at the hands of the bubonic plague, plus an invasion of the Mongol Horde thrown in for good measure.  While few of us are riding high these days, nothing is ever as bleak the Wall Street Journal, Financial Times, or U.S. News & World Report makes it out to be.  Despite the seemingly never-ending stories of job layoffs, personal bankruptcies and home foreclosures, these can be exceptionally rewarding times for small business owners.

Darwin Was Right – About One Thing, Anyway
Although the theory Charles Darwin put forth regarding the extinction of species – he claimed it happened slowly over millennia – has been pretty much debunked by scientists identifying at least five Great Extinctions, each taking place quite suddenly, the scholarly evolutionist was correct about the survival of the fittest, at least as it concerns business.  In difficult financial times, money is tight at the consumer level.  People are especially tight-fisted when it comes to deciding where to spend their cash.  A company that trims unnecessary spending, provides superior customer service, refuses to cut back on product quality, and finds more efficient ways to operate, will stand to capture a solid share of the market.  Establishments that give off the stench of despair, alienate their employees, or continue to spend too much money on non-essentials, will probably fail to survive.  Make smart decisions and you will avoid becoming the modern-day equivalent of the dodo bird or the passenger pigeon.

Economic Downturns Actually Aid New Ventures
As counter-intuitive as the above statement may sound, there is solid evidence of an historical nature to back it up.  Thirty U.S. corporations comprise the Dow Jones Industrials, and fully 16 of them started up in the Great Depression (1929 – 1937) or during a period of extended recessionary stagnation.  These include Johnson & Johnson, General Electric, Alcoa, and Disney.  Take note of the following elements that help boost one’s prospects as a small-business owner in such challenging times:

• Big companies suffer economic setbacks – Major overhead costs are hard to trim, the same way it takes considerably longer to turn an ocean liner than it does a tugboat
• Customers are willing to let loyalties slide – In good times, it’s easy to live with the status quo; tough times call for extraordinary measures, and clients are always looking to save a buck, which is easier to do if your small business has a lower cost of doing business than that of the leaders of industry
• Advertising is cheaper – A full-page ad in the local newspaper is a lot harder to sell when companies are cutting back; more aggressive marketing lets you take advantage of lower prices and also stands out when everyone else is abandoning that point of attack
• Suppliers are hard-hit as well – If XYZ Wholesalers just lost one of their major clients, they’re probably willing to sell off excess inventory at very attractive prices; having cash on hand to take advantage of a bargain is usually more easily accomplished by small businesses.

War – The Greatest Disruption of Them All
Linguists continue to argue whether the old wives’ tale is true that the Chinese ideogram for “crisis” is made up of two characters: “opportunity” and “danger.”  That debate aside, the concept has great validity.  Few events cause greater disruption than war, and countless small enterprises have flourished because of items they created or circumstances they foresaw.  Canned food was invented during the U.S. Civil War, giving rise to Heinz, Armour, and Van Camp.  Miniaturized ICs (integrated circuits), designed as a reaction to the 1973 oil embargo, led to the development of the Walkman and ultimately the cell phone.  Surprised by the defeat of Napoleon at Waterloo and an early end to the war, a surplus of wool British Navy jackets were bought up by a tiny New York City clothier and redesigned for civilian use.  The rest of that story – it was Brooks Brothers who did it, all the way back in 1816.

The Man (or Woman) on the Street – Literally
Finally, one of the best ways a small business can flourish in bad economic times is by hiring exceptional workers at near-bargain-basement prices.  A laid-off IT worker who previously earned a six-figure salary monitoring a LAN (large-area network) would be a great addition to your small business as the person in charge of everything computer-oriented.  A high-power ad executive certainly knows the best way to bring more people into your chain of shoe-repair shops.  The head chef at the local four-star hotel that changed its restaurant from fine dining to buffet service would make a terrific supervisor of the three kitchens in your catering business.  What’s more, these people may have soured on working for Big Corporate America and would be glad to step off the treadmill and enjoy the close-knit camaraderie and laid-back environment of a small business that’s going somewhere.

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