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So Mervyn King, the Governor of the Bank of England has pronounced the âniceâ decade over. Apparently we can now look forward to global trading uncertainty, the spiralling prices of natural resources, increases in home repossessions, and the massive restriction of credit.
Meanwhile politicians on both sides of the pond seem to be nasal gazing, wondering about their own individual political futures.
Is all this worrying you?
The neurotic will point out that the complete collapse of world economics is the least of our problems as weâre all going to be blown up by terrorists in any case. Of course if that doomsday scenario doesnât hold true then the storms, tsunamis, droughts, plagues or famines that weâre all promised will certainly get you.
So against this less than cheery backdrop, is anybody going to believe that right now is a great time to be starting, or building, a business as an entrepreneur?
Letâs identify with the typical entrepreneur. Entrepreneurs â whether they run a small business from a back bedroom or a far bigger operation â have taken the risks of waving goodbye to the monthly pay packet in return for chasing their dreams. They have invested their time and money. These are the 1% of people who will take on anything to be successful and always find a way to reach their goals. So surely these are people who live and breathe business; who would eat Gordon Gekko for breakfast; who control their own destiny?
Amazingly this is normally far from the case. Most small and medium sized businesses out there dawdle. They are run precariously by the delusional dreams of their creators who have little grasp of the fundamentals of growing a business. This means that these people come over all a bit rabbit-in-the-headlights when thereâs talk of a faltering economy. Itâs what happens to people when they are scared of anything â they freeze. They donât know what to do or where to turn, and wonder which direction their burrow is in.
You see there is a lack of understanding of macro economics. Iâm not suggesting these people should start studying Keynes, but there seems to be panic over the immediate, rather than a structured approach to dealing with the cycle.
Ultimately any downturn, dip or recession in the economic cycle is the collective behaviour of a human condition. We generally know that prudence makes sense but as we clamour for the next level and get cleverer in what we do, so we become less cautious. Our valuations of assets rise as we try to increase our wealth and we become hunters as opposed to hoarders. Suddenly we start to see that some of this behaviour is unsustainable, casualties occur and we all go running back to caution.
But itâs not actually the âcycleâ that it is labelled. Each stagnation of the economy is not the same. Apart from the fact that there are different triggers for each dip, the world in the early eighties was not the same as it was in the early nineties. That period in turn seems a world away from where we are now. In 1990 mobile phones were still the size of small house brick and the internet was barely more than a twinkle in Sir Tim Berners-Leeâs eye. A green car was any car painted in said hue, and China was a place where communists with lots of children went everywhere by bike. This means that the way we work and live our lives is different each time. So our needs, wants and aspirations are different too, and thus the opportunities for businesses to satisfy those needs is different.
The downturn does not mean the end of the world. It doesnât mean that nobody is spending money and it certainly doesnât mark the end of capitalism. Successful, millionaire entrepreneurs have made it through recessions. Recessions have made millionaires.
And this is the point. Not everyone is going to lose their home. Not everyone is broke. Not everybody is going to lose their job. In fact these things will thankfully only happen to a small percentage of the population. Although things will be tighter for a larger percentage of people, we still need to contextualise all of this.
The billionaire Joe Lewis has just lost Â£500m in the collapse of the American bank Bear Stearns. Half a billion pounds â a third of his wealth. But do you think heâs shopping at Lidl to save a bit here and there? Do you imagine he wonât still be enjoying the life that he has earned in his home in the Bahamas?
And this is why I believe that this is a great time to be an entrepreneur right now. There are plenty of opportunities and your competition is writing itself off. With these five strategies, entrepreneurs can use the next year or so not just to survive but to thrive. To put in place the growth fundamentals that will put them into the top 1% of that 1%. And that really will be nice. Whatever Mr King reckons.
1, Donât believe everything you hear
Every section of media it seems is full of stories about the economy. You turn on the telly to watch the news and find a special report on the âstruggles of ordinary peopleâ losing their homes. You read the celebrity goss (sic) and it tells you of cancelled summer balls.
Entrepreneurs need to immunise themselves from this. They need to understand that this is a period of the game, and a period that brings opportunities. Many opportunities. One of those opportunities will be that your competitors may already be mentally succumbing to these stories. This is your chance to capitalise.
Of course things are going to be different, but then it has always been that way in business. Many of your peers and competitors will be telling you things are tough but this is normally little more than a good excuse for their inaction, and one they never felt they could use when things were, well, âniceâ.
2, Get good at marketing
During better economic times, fantastic marketing is the one thing that separates the star businesses from the dawdlers. In tougher times it separates the survivors from those that will perish. Itâs as simple as that. Getting good at marketing is no longer an option, it is a necessity.
There are many ways of doing this. Most small businesses donât realise that there are actually many ways of doing this which are either free of very, very cheap. Most businesses in this country â of any size â still donât actually have a web strategy that works. They might have a very pretty website, but does it actually provide them with a constant source of income?
Learning these skills and testing them, measuring them and trying to improve them can thoroughly change most businesses. Establishing a multi-strand marketing strategy is perhaps the closest thing there is to a silver key to business success.
3, Hold on to your customers
Marketing is not just about the chase for new customers. It is about all the methods you can use to win and keep customers. Unless your business is worthless in what it does, your existing customers are the people most likely to buy from you again, or recommend you. They have trusted you once, you have delivered for them, and you should do everything in your power to keep these relationships.
You should write to them, phone them, email them, put something on for them. Donât be held back by thoughts of âthis doesnât happen in my industryâ. An Indian restaurant in St Albans, Hertfordshire calls all its customers who havenât visited for a while. Theyâre always very busy and have very loyal customers. Simple stuff just works.
4, Joint venture
Your base of customers makes up a lot of the goodwill value of your business. Whilst you should be doing everything you can to remarket this, there is another level to which you can take this idea. Joint ventures can be done in many ways, and can be set up quite informally. (Letâs leave well alone any legal connotations of the term). Basically the premise is either: a, to find an additional product or offering to sell to your customers, or b, to find a way to sell your product to the customer base of another company.
Think of complimentary products or services and who supplies them. Go and sell the concept to these people. This is a fantastic way to enhance your own offering, or even better gain instant access to the customer base and the goodwill of your partner.
A simple yet highly effective strategy, and one which many of the large corporate businesses are increasingly using.
This may be text-book stuff but it is a huge and often under-used advantage that smaller businesses have. All businesses need to adapt at all times. Changes in consumer taste, technology, laws, as well as the economy dictate that. Yet many small companies freeze when the economy stalls. The leaders of many small and medium sized businesses regress instead of diversify. They cut back marketing instead of using it as their lifeline.
The smaller the business, the easier it is to change course, try new things or add new products. Donât abandon this advantage â your larger competitors are completely unable to move as fast as you. If the problem is that you are struggling to think of how exactly to diversify then try either asking your customers, looking at how they are behaving, or simply just try offering them something different. Donât take unnecessary risks â just keep trying things and see how they go.
For further inofrmation visit Jon Dean’s Marketing website.