Popular Posts

Sunday, 7 November 2010

Recession? It's Time to Diversify!

With all the doom and gloom mongers, especially in the media, telling us that we are in the worst recession since the dawn of time, and the only way forward is to cut costs and sack people and so on, it could be that some potential entrepreneurs may be feeling just a little uncertain about the future.

Consider the actual position.   Sure, the economy has contracted and the dreaded cuts are coming from the public sector, but in actual fact, the contraction is no more that around 8% which to a simple soul like me says that there is still 92% of the economy to go for.

More's the point, the cuts are not going to be immediate and the majority will be coming in the next two to  three years during which time, it is more than likely that the private sector will start to expand again and take up the slack.

As far as the SME sector is concerned, frankly what difference does it make that the available market is, for example, £500million or £460million when your turnover is just £2 or £3 million?   Market penetration for most SMEs is minuscule and realistically can almost be ignored.

It all comes down to an attitude of mind.   If we believe all the naysayers on the Today programme (have you enjoyed the freedom from that this week?) then it will be all about retrenchment.   By far, the best approach is to take a good look at what your business is doing and ask yourself whether there is a case for diversification to achieve growth in some other direction.  Walt Sutton calls it "discovering the rivers of cash" and that is one of the most important functions of the leader.

Ideally, of course, we should go for expansion in existing products into existing markets but that may not be easy in the current environment.  The next best approach is to introduce new products into your existing market where you are known and have credibility.   Innovation is the key here.

More difficult is expanding your business with your existing products into new markets and that is more difficult where you are unknown and have to create an image and a presence.  Finally, of course, there is the new products into new markets and that is in effect, starting a new business.

None of these are impossible but each new approach will require a concerted and concentrated effort to achieve success.   In the end, attitude will be the decider.

Finally one or two positive examples.  If you are looking for a good idea, consider what everyone wants and is consumable, that is, is a regular purchase.  A young woman recently started a new business selling tights (regular purchase) on the web and is now turning over in excess of £1million.

In the recession of the 1970s, two business started and are still in business.  One was called Microsoft and the other was called Apple.

It's all about attitude, remember.  As Henry Ford said: "If you say you can or you say you can't, you're always right"

For more information visit www.maa-uk.co.uk
To contact us, email to ivan.goldberg@maa-uk.co.uk

1 comment:

David Adams said...

Recessions

Why do we keep on keeping on,
in the midst of such pressure,
when business is no good for no reason,
when the Fed does something
and interest rates do something
and somebody’s notion of consumer confidence does something
and the dogs won’t eat the dog food?

What keeps us working late at night
and going back every morning,
living on coffee and waiting for things to bottom out,
crunching numbers as if some answer
lay buried in a computer
and not out among the people who
suddenly and for no reason
are leaving their money in their pockets
and the products on the shelves?

Why don’t we just say screw it
instead of trying again,
instead of meandering into somebody’s office
with half an idea,
hoping he’ll have the other half,
hoping, what sometimes happens will happen,
that thing, that click, that moment


when two or three of us
gathered together or hanging out
get hit by something we’ve never tried
but know we can make work the first time?

Could that be it,
that we do all the dull stuff
just for those times
when a revelation rises among us
like something borning,
a new life, another hope
like something not visible catching the sun,
like a prayer answered?

James A Autry b1933
Author, Poet, Lecturer, Management Consultant