What do these companies have in common? Hyatt, Burger King, IHOP, Fed EX, HP, Microsoft, CNN, MTV, Sports Illustrated, GE. All were founded during a recession or the depression!
Out of adversity comes greatness. In America’s history, the greatest period of ingenuity and inventions came out of living through tough times. And back then no one got bailouts.
FACT or FICTION? The Small Business market shrinks during recession. FICTION!
We’ve all read that small businesses are the backbone of the U.S. economy and are what will drive our economy in the years to come. The logical assumption is that the small business market will shrink during recession times. In fact, the opposite is true. These are the types of misconceptions that marketers to small businesses must expose in boardrooms and budget meetings to be successful during a recession.
During downturn economies, not only does the net number of small businesses grow, but the number of start-ups actually increases vs. previous years. The result of corporations downsizing is a catalyst for many to fulfill their dreams of being self sufficient. This serves as a launching pad for the nation’s aspiring entrepreneurs. Where do all of the sharp, well trained executives go when their firms make massive layoffs or cease to exist? Many of them start their own business. Historically, the number of new businesses spikes as recessions get deeper.
Not only does the small business market offer continued growth during a recession, it also offers relative stability.
When you compare consumer spending to growth of new small businesses, year over year, changes in the small business growth rate are less than a third of the drops seen in discretionary consumer spending. So what does this mean? It means that small business people who don’t focus on doom and gloom but learn how to make lemonade out of lemons not only survive but thrive in tough times. They make smarter decisions in their marketing efforts, but they don’t stop marketing. So do your own belt tightening and make sure you have the best team possible and then invest in their education. In short, you must lead. In tough times, people need leaders to define the direction or path and to help them recognize that the future is brighter on the other side. Here’s a quote from John D. Rockefeller…
“These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again.”