Here’s an encouraging fact: the people who survived the boom-bust economic cycles dating back to the 1930s are the same people responsible for building some of the most recognisable corporations of the world today. How can you emulate their example by staying the entrepreneurship course despite the current global economic gloom?
Taking the treacherous high road
Distinguished entrepreneurs like Richard Branson, Bill Gates and Raymond Ackerman are high road dreamers. They conceived audacious visions and then set out to achieve them. Their businesses have seen more than one recession and survived the fallout.
In a downturn, the biggest risk you face is the temptation to succumb to economic pressures and abandon your ship. The moment you gravitate to the low road, it’s hard to come back up to the high stakes game that
entrepreneurs with grit revel in every day. The road you have chosen as an entrepreneur is treacherous; your tenacity, perseverance, love and passion for what you do will keep you on track without suffering burnout.
In for the long haul
Here are a few tips on becoming unburnable in recession times.
1. Adopt an ‘investing’ and not ‘consuming’ mindset
Remind yourself that you are not in a salaried job; you are building a business. As a buyer of time, every 30 days you look forward to investing in your audacious goal rather than earning a salary to consume. The
‘recession’ word is a scourge for consumers; for entrepreneurs it regulates the rate at which you can afford to grow your business in an environment of subdued demand.
Your business assets will earn you less profit in a recession; that is granted for most recession-prone businesses. However, assets built cheaply during a recession will give you a higher return in a brighter economic climate in the future.
2. You are in it for the long haul, recession is just a hump in the road
The larger your entrepreneurial goal, the more time you need to invest in it. Just as the best-matured wines carry a price premium or the best-structured investment portfolios earn the most compounded value, so too does your business need a long-range perspective to prosper. Focus on investing in your business rather than seeking options to divest or exit altogether, because the recession mood is everywhere.
My favourite thought is that a hundred rand invested in a growing business in a downturn is equivalent to a thousand rands worth of investment in boom times. When fear grips your competition, you only need a little effort to be noticed. In a boom economy, the cost of exposure is much more. In the current climate, take as little profit out as you can; instead build a solid platform to benefit from the upturn when the economy turns.
3. Eliminate debt from your business
If demand is slow for your business in recessionary times, why are you so hell-bent on financing its operations? What you need is to tighten your working capital needs during a poor business cycle. If you are a small business, ask suppliers what things ‘truly’ cost before signing up for expensive credit agreements that could be avoided by utilising short-term savings.
4. Don’t live your past, live your business
Most entrepreneurs are former fulltime employees. Big leases and large mortgages were well and good to have then. They are an unwelcome distraction in your early entrepreneurial life. The real issue with a recession is not the challenges it imports into your life, but rather what it found you struggling with when it hit. The real thrill of starting your own business is to see it grow with minimal debt.
5. Finally, recession or not, as an entrepreneur, you must dig deep
Your business needs more than capital investment to grow. Emotional wellbeing, positive energy and clarity of thought are as important as the technical tools you brandish. During a recession, generate ideas and think creatively about your business and its long-term competitiveness.
With a clear mind and enough curiosity, there are a lot of opportunities to thrive, even in the current climate – so just do it.