By Marc Sellouk, Founder and CEO of Flewber
Like many things in life, economic crises usually have two phases. The first phase is best visualized by the slow creeping of ivy on the back of the fence surrounding your yard. The indicators of future problems are there, but only sometimes visible to the naked eye, and so the long-term impact is all too often overlooked. This can, and often will, go on for years until one day you find yourself in the second phase where your fence appears to be suddenly covered in invasive vines, as are many of the trees and plants in your yard. The key to continuing to grow your business is not to be blinded by fear of the opportunities that can present themselves once you enter the “all at once” phase of an economic downturn.
Not long ago, our country was in the midst of a booming economy, with the occasional warning light. Until the catalyst, a virus that nobody saw coming, triggered a massive recession. The 1957 flu epidemic killed more than 80,000 Americans and ushered in the beginning of the 8-month Eisenhower recession. Also in 1957, Jay Pritzker bought the Hyatt House motel near the Los Angeles airport—all with the thought that business people would one day flock to hotels conveniently located near airports. As fate would have it, December 20, 1957 was also the first flight of the N708PA. The Boeing 707, later delivered to Pan Am, took to the skies for a 7-minute flight that day and the 707 family ruled it for decades.
Obviously most of us don’t have the tools of the Pritzkers or Boeing Corporation, but as entrepreneurs and leaders we should all be driven to succeed and grow our business in both good times and bad, which led me to my first Rule for growth brings a slowing economy:
Invest in marketing
Necessity is the mother of invention. Perhaps you recently shelved a marketing plan or postponed a product improvement or service expansion. Now is the time to take those plans out of the mothball and enter the market more aggressively. During a lethargic economy, most of your competitors will spend on marketing and product development. The companies that do the opposite have an increasingly better chance of emerging stronger from the downturn.
Maximize customer value
Maximizing customer value should be a core tenet of any business, but it’s critical in a bad economy. Too often companies focus solely on price as the only way to maximize value. The truth is, customers find value in many areas other than just price. You’ll find it in the buying process, in customer service, and in the general prioritization of service quality and product expertise. Even in bad times, your focus should always be on not only maintaining a positive brand perception and experience, but on expanding it further.
Prioritize partnerships whenever possible
The business world never stops moving at breakneck speed, even during an economic downturn. In fact, I would point out that the ability to be agile and fast is even more important in these times. Strategic partnerships should therefore always be at the forefront of your planning. Yes, we all start with the vision of organic growth leading to mergers and acquisitions being the next big thing in our market. But we live in a world where there are so many choices that give buyers so many options; a world where new ideas don’t stay new for long. Not only can the right alliance save you time and money, but it can put you on the path to faster, sustainable growth than you might have thought.
Always pay attention to the mood of your team
When you started your business, you hired people who would form a team. The people we hire may not be the most expensive assets on our balance sheets, but they are, in fact, our most valuable. In times of economic uncertainty, it’s understandable that your team feels like they’re waiting for the ax to fall. This constant drumbeat of uncertainty can lead to lost productivity and creativity just when you can’t afford to let either slack off. This is the time when it’s up to you to reassure your core team that you will stand by them, and they will stand by you.
Let the challenge drive you
Most people only see the perceived rewards of the corner office. What many don’t realize is that many executives lead a lonely existence of being first on and last off. It is often during this time of solitude that we do our best work and think most creatively, but we can also emphasize the path forward. In these times, embrace the challenges ahead by reflecting both on how you became the success you are and on companies like GM, Burger King, FedEx and Airbnb. Each of them started operations during a recession. Look where they are now and how many economic downturns they have come out of. It’s never easy, but if you let yourself be driven by the challenge, your business can emerge stronger from it too.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.