Recession got you down? The mere mention can trigger everything from despondence to apathy. However, as much as a downturn in the economy puts an end to economic exuberance, it can also be full of opportunity. Careers and companies can boom in any economy.
Photo by Public Domain Photos via Flickr
In fact, some famous companies got their starts during economic downturns.
- Revlon got started during the Dirty Thirties, when the founders realized that people still wanted to look good, even if they had less money.
- Hyatt started during the 1957 Eisenhower recession by focusing on modest hotels, not premium digs.
- On the heels of the same recession, two franchisees of a fast food chain purchased their parent company and repositioned it as Burger King.
- And FedEx, launched with an innovative hub distribution model at the time of the 70s oil crisis, once made payroll via the founder’s blackjack winnings — and went on to boom during airline cargo deregulations.
Companies started during recessions often start from a position of strength, because they are used to bootstrapping purchases and managing finicky clients.
In a recession, opportunities emerge because:
- Companies re-evaluate their decisions. In a bid to cut costs, add value or reduce risks, many companies begin reviewing their business models, partners, customers and processes. As they make adjustments, they may let some providers and employees go — and then hire in better alternatives. If you can make a bid to be a better value solution provider — as a supplier of products and services or as an employee — you can benefit from the change in direction.
- Customers look to save money and get more value from purchases. In a bad economy, people look for cheaper solutions and better value alternatives. As people shift their purchase decisions, they make substitutions. Consider how the early 90s grunge trend led yuppies to stop spending at wine bars — and instead buy $4 lattes. If you reposition to meet emerging needs, you can build your company or your career.
- People repair products. When times are tough, consumers look to fix things. They start replacing the heels on shoes, fixing appliances and souping up their cars. They also start making better use of customer service and support, rather than simply replacing what they have.
- As people become more conservative, it’s easier to be an outlier. When the economy is going strong, lots of people change their jobs, take business risks and jump on board the bandwagon. Everybody wants in on a good opportunity. But when the economy starts to sink, people become more conservative. So, if you strike out on your own in a business or aim to make waves at work, you can make big waves just by making small moves. Even starting up a side business or making a lateral job move can make you look like a real change agent — and put you in line for better paying work.
- Contracting and freelancing opportunities broaden. To tighten their belts, many companies shy away from hiring full-time employees. Instead, they bring on freelancers, consultants and temporary workers, especially those who can hit the ground running. They may bring in hired guns to help them find their way out of a problem — such as customer retention or cost reduction — and then send them on their way. That means there’s an opportunity for people who can get a quick read on a situation and offer real help.
Navigating a recession or bad economy is by no means easy. But repositioning your company or career and looking for opportunities can hold you in good stead. A downturn for one company may be a time of riches for another. Look around and think about how you can make the best of a down economy.
Andréa Coutu has grown Trustmode Marketing from a freelance business to a strategic management consulting firm with multiple contractors. She blogs about her 15 years of entrepreneurship and consulting experience at Consultant Journal and has written an ebook on fees and pay for independent consultants.