I have probably had a hundred conversations with small business owners about the economy over the last two months. It is amazing how we become conditioned to think and feel as the majority does. Small business owners as a group are very concerned about the economy. I have begun to ask very specific questions when I hear their concern.
Is your current business suffering right now?
“No, but I am sure it will soon.”
Why do you think your business will be impacted?
“People in general are spending less money. Personal and business budgets are being tightened up.”
Do you have the majority of the market share for you products or services?
“Well, no, we are just a small business with a very small slice of the pie.”
Okay, so if a small business owner is a small slice of the pie and the overall pie shrinks is there any opportunity left?
I really think so and here is my logic.
1. If the economy is doing poorly then the major players in each industry will have the biggest impact because there is a shrinking “pie” and they already have most of the “pie”. Therefore, their sales are shrinking.
2. This causes layoffs and a slowdown in investment into the business.
3. With less staff and less investment, the major competitors may be hunkering down and not showing extra service or innovation to their target market.
4. This leaves opportunities for small businesses to :
a. Hire experienced people who have been laid off –maybe at a good price too!
b. Create points of difference from major competitors by showing customers/clients how they are investing in the industry and enhancing their products and service.
c. Take advantage of cost savings in equipment, software, real estate, etc. as these vendors are discounting product to turn their inventory.
d. To penetrate the market through marketing as the “advertising noise” from the majority of the industry is much quieter right now. It is time to step up and get noticed.
In a small business, gaining 1% or 2% from major competitors could be a tenfold or more growth in our business. We don’t have a 70% market share with a bunch of small guys to go steal extra sales from. We have less than 1% market share with a whole pie to go after, even if the pie is only 8” now instead of 10”. There is still significant business out there.
I am not happy that our economy is in its’ present condition, however, I have learned to try to always see the cup as half full. One of my favorite scripture verses is Romans 8:28,
And we know that in all things God works for the good of those who love him, who have been called according to his purpose.
Over the next couple of weeks I will share more details on what we need to do to make the most of this time of recession. As the verse above suggests, the first step is to pray and seek God’s path for your business. Check back for more information on how Small Business can thrive in 2009.