Steve Wood of Success Enterprises Consulting Pty Ltd looks at what individuals can do should they find themselves in a recession and lose their jobs.
“Strategic Management Consulting to Achieve the Art of the Possible”™
Over the past few months the sub-prime mortgage fiasco in the USA has impacted Australia. We have seen the stock market drop, interest rates rise and rise, petrol prices rise, and the housing market taking a hammering.
And now they are retrenching me!
What can I do now?
For those who have no desire to start a business you should update your CV and get talking to as may people as possible about the next type of job role that you are looking for. You will have most success if you are very specific about the type of industry, company and job role that you are interested in. Talk to recruiters and talk to the companies that you wish to work for. Start doing that now, since you will be amazed how quickly your notice period will finish and you found yourself out in the big wide world.
For those intending on getting into business it will be important to do thorough research before starting a new business.
Use the notice period to think through your plan. Get some help if you need to. If you have a new product idea, it will be vital in the early days to manage your cash reserves and cash flow properly. Recession time means that your customers are likely to have less cash available (because of the interest rate rises) to spend on your products and services. So make sure that that you do your research to understand what it is that your product offers and why it is different and better than the alternatives. Then you need to understand your own expenses and take a very active interest in managing them.
Have a good hard look at yourself. What skills do you have and where do you know that you are weaker and will need some help. A Business Readiness Assessment will help you understand if you are ready to start a business or not. It is aimed at those considering going into business, but are unsure about what they do not know yet, and perhaps are not sure about what they will need to know and do to get going. As you work through the questions you will better understand whether you are ready to start your business yet, or whether there is more research that you need to do, or extra help that you need, or extra money that you need to save or borrow.
For example what is the real reason for starting a business? Is it because you lost your job, or actually have you been wanting to start a business for a while and this event is the push that you needed to get going? Then who are you going to bring into your team to help you? How much money do you need to get started? Do you have a budget worked out for the day to day running of the business? These are all things that you should have thought about.
In our view you should be spending some time thinking about and building your plan BEFORE committing large amounts of money to a new business venture. Take your time and do it right.
For those already in business, I would suggest that you need to do two things.
Keep your existing customers very happy so that they come back, again and again.
Look at the cost side of your business and aim to remove any unnecessary or wasteful practices that you see.
For those that have been in business a few years, but have not yet experienced a recession like the one that I experienced in the 1990’s and early 2003 in the UK, and in Australia around the same time, I would be considering in addition offering something special that will allow you to stand out. Perhaps developing a low feature, lower cost version of your standard product or offering different and special discounts for those customers that are willing to pay 100% up front or on time.
Final Thought
The economy is cyclical. We have had a good few years of continuous growth and prosperity. Now is the time that the cycle is slowing down. Success in business comes from being good at what you do and giving your clients what they want at a price that they are willing to pay time and time again. If you can not do that, then do not go into business. Get a job.
Steve Wood is a strategic management consultant at Success Enterprises Consulting Pty Ltd and a Vice President of the Institute of Management Consultants in Victoria.
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