View From Afar: Recession Rethought

View From Afar: Recession Rethought

I remember when I was a kid living in the UK. Back then, we had a saying about the fragility of the economy there, that went something like this,

“When America sneezes, Britain catches the flu”.

Today, because of the intertwining of most major world economies today, when any economy gets “the flu” everybody “sneezes”. Israel (where I currently reside), because of its unique internal circumstances, tends to be more of a “hostage to fortune” than most. We are, at the moment, suffering one of the worst of economical slow downs in Israel’s economically-checkered history. This has dramatically affected every individual & every company from the top down, regardless of size.

The difficulty of trying to survive at times like this makes you examine every aspect of your business in a far deeper way than usual. Even the most efficiently run company can be streamlined if only because certain expenses or methods of working that made sense in times of plenty are not logical during times of famine. Most of the things I have found hold true for here. I don’t know about America or any other country, but a number of these points, I am sure, hold true “generally”.

I don’t hold myself up as a trained expert in these matters, only in the way we of more advanced years are experts because of having lived through events (such as recessions) a number times.

The first point took me a while to realize.

In the past, giving a better service and doing better work ensured me of getting a better price for my services. Furthermore, I was not willing to compete on price alone. Today, however, giving a better service and doing better work might win you the job over your competition, but only at the same price, as there is only a set amount in most client’s budget (usually, much smaller than before) allowing no extra money for “finesse”. When times are good it is possible to concentrate on one section of the market or one service and make a good living.

However, during tough times you have to cast your net over a “wider field”. Every
business concentrates on a different market and offers different services so each owner
has to decide for themselves what the logical additional areas of service they should enter. What is worth keeping in mind is that the easiest and cheapest added services are ones that utilize the same equipment and/or can be easily offered as add-ons to existing
clients.

[Editor’s Note: Several examples of added services are “leather care”, “ceramic
tile and grout care”, “hardwood floor care”, etc.] Another approach to increasing business is to make the payment easier.

On that basis, I have recently started accepting credit cards. This can be especially
useful for convincing a customer to take advantage of those added services.

Even at a time of deep recession, there are potential marketing areas in which the situation is either unchanged or sometimes even increasing.

For example, the insurance industry usually finds an increase in claims for various reasons and this can be a very lucrative area. “Cleaning for health” is another sector that can be relatively unaffected, as people suffering from asthma, allergies, etc. are very often willing to pay for relief from their complaints, regardless of the economy.

It might seem self evident to state that it is very important to “ride out” a recession.

Obviously, nobody wants to go out of business, but sometimes, you can feel… “Is it really worth carrying on for such reduced earnings?” Very often the answer is yes. Here is why. When a recession is over, there is usually a burst of business activity and “the pie” is shared amongst less businesses. Furthermore, given what you learned during the
“battle to survive”, your business is likely to be run on “tighter lines” and so become
more profitable.

Writing this article has been a self indulgence.

Like most of us, I have a lot of ideas that are scattered randomly and writing this piece
has forced me to “defrag” my mind by sorting these ideas into some kind of order. A
friend of mine who writes computer programs that teach children English as a second
language had to write a business plan. He told me that even though he has owned his company for many years, writing a business plan taught him a great deal about his business. You can download business plan programs from the internet. I think it would be an interesting exercise. Finally, a personal word of thanks to Mark Stanley. I know how difficult it has been for me sometimes to scribe my few lines here, so how he manages to fit in all that he does, I don’t know. I suspect he has found a way of stretching the day to 30 hours. Anyway, a sincere thanks you for giving me the chance to contribute my 10 cents.

Harvey Fish
Copyright 2003 Harvey Fish. All rights reserved. Used here by permission of Harvey Fish.

November 30, 2005 / by / in
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