Every dark cloud has a silver lining. Driven by the current pandemic, smart entrepreneurs of all ages are jumping into the fray with new ideas, new recovery strategies, and discarding outmoded business models. I see it most in the newest generation of entrepreneurs (Gen-Y), who were shocked out of entitlement into action by an economic downturn.
Donna Fenn, in her book from the last decade, “Upstarts! How GenY Entrepreneurs are Rocking the World of Business,” was one of the first to predict that Gen-Y would lead the charge, bounce back from the recession at that time, and be big winners. She describes a new generation of entrepreneurs that is highly collaborative, quick and alert when it comes to new technologies, and hell-bent on changing the world in general.
Upstarts! examines and analyses this entrepreneurial revolution to reveal critical lessons every Gen-Y entrepreneur and marketer must learn. But the insights I see from her book and elsewhere are equally applicable to startup founders of all ages, and businesses of all ages. Here are five key recovery strategies that both of us recommend to all of you:
- Pursue repeat business. It's far less expensive to nail down repeat business from your existing customers than it is to land new ones. Now is the time to reap the benefits of those good customer relationships that you've been cultivating. Viral marketing campaigns to lure new customers will cost you big money.
- Focus on your core competency. Examine every cost center in your business. Maybe it’s time to outsource that call center operation, or complex manufacturing setup. Look for operations that are hogging resources without generating significant revenue. With a concentrated point of focus, your company might be well positioned for growth this year.
- Snap up top talent. Past layoffs at big companies usually means more great employees on the market now for newer companies. Examine your pool of higher-paid contractors and freelancers. Now is the time to bring on board those people who would have been inaccessible in a better economy.
- Respond rapidly to market shifts. The pandemic has almost certainly had a profound impact on your customers: they may have altered their purchasing habits, or found themselves with entirely different needs. It's your opportunity to respond to those shifts. These are chances to broaden your product line, change distribution, offer new services.
- Look for hidden sources of revenue. Sometimes your best source of new revenue is right under your nose, like services revenue in support of your products. One entrepreneur in Fenn’s book had a proprietary technology to efficiently manage vendors which works so well that she is now marketing it to other companies for a transaction fee.
Most companies I know agree that the pandemic has taught them the art of laser-like focus, and compelled them to make better decisions, to become more frugal, and to initiate systems and procedures that will help position them make an economic recovery. Simply deciding to lay low and “tough it out” was never a winning strategy.
I agree with Fenn that a recession or pandemic is actually a good “wake-up call” for many in the new generation – it has forced them to face the reality of hard knocks. Similarly, it should be a wake-up call for the rest of us, or we will be overrun by young entrepreneurs with their burning desire to control their own destinies.
