Opportunity in Crisis
By Brad Sugars
How to See the World Like Successful Business People Do
We’ve all been following the news lately and yes … the world in economic turmoil. But unlike the journalists and the naysayers, great business people are looking for opportunity in the midst of the crisis, and many are finding it.
My prediction? More money will be made coming out of this meltdown than was made in the boom.
How can I say this with any confidence?
Because the business cycle is exactly that – a cycle. And like the seasons, as sure as spring follows winter, growth will emerge from the current chaos.
There is no doubt some part of the world are in economic fall and winter. Yet other parts are in economic spring and summer. That’s the reality of today’s globalization. It’s also the opportunity globalization offers. If you are in a region that is hurting, look at the markets that are prospering and ask yourself how you can be part of them. If you are in a market that is booming, you may be able to look at a slow market to pick-up a variety of quality assets at a discount – anything ranging from capital equipment to real estate.
For those in the economic fall and winter, now is the time to regroup, reorganize, plan and prepare your fields for spring.
For those in spring and summer, the past few months have demonstrated what can happen when the boom times end – so look to streamline your expenses, prune the extras and learn to run “lean and mean.” That way, it won’t be such a shock to your company’s systems when the slowdown comes along.
It also helps to take a look at what “smart” money is doing. Warren Buffet, the greatest investor of all time, is looking to buy, and in fact, picked up the US-based Goldman Sachs during the height of the credit crunch on exceptionally great terms – namely his.
Buffet has made a career out of “being fearful when others are greedy, and greedy when others are fearful.” Think about that for a moment, and it can guide you the next time any market – be it real estate, commodities or stocks – gets overly frothy or too cool.
That said, some common sense should also apply – especially when it relates to new technologies replacing old ways of doing things, as I doubt those still holding shares of horse and buggy firms have done as well as those who bought into automobiles.
The reality is that good business people move with markets and shift their perspectives when events in those markets change. The other reality is that a large number of the economies that are in economic summer are still based in agriculture and manufacturing – a shift that economies now in economic winter transitioned out of decades ago.
The bottom-line is that those still emerging economies offer incredible opportunity for experienced business people, because it is in those basic industries that the world’s greatest fortunes have always been made.
But let’s say the idea of going global is simply too big to fathom right now. What are the opportunities in your own “backyard?” Or right “under your nose?”
First, examine your existing product or service in terms of the current marketplace. Is it time to scrap it for something new your customers want or something to which you can add value? In this economy, you are going to have to sell your way into prosperity, and you should do it with the best products and services possible to compete against everyone else who will be cutting their prices.
Next, look at your marketing. In spring and summer, you can sell on themes like “greed” and “desire.” In fall and winter, you need to focus on “fear” and “needs.”
Third, track your cash flow very carefully. Eliminate extras. And focus on top-line growth. Again, strong sales will the key to prosperity.
Finally, focus on keeping your existing customers. It is always more expensive to buy new customers than to sell to an existing customer base, and far less profitable short term. So go out and talk to your customers, find out what they want to buy and sell it to them. Not at a discount, but as an added value to what you already do.
The financial world may be in turmoil, but it is certainly not coming to an end. So ignore those who say the “sky is falling” and learn from those who have actually made money in good times and in bad so you can see through the media clutter and still make a profit.
Your financial winter will be less bitter – and your financial spring will be a lot more green – if you do.
This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.
