How To Survive And Prosper During The Coming Recession
“Yesterday is not ours to recover, but tomorrow is ours to win or to lose.” – Lyndon B. Johnson (address to the nation, November 28, 1963)
In addition to following the news reports and pondering the moral and practical issues of fighting a war against terrorism, I’ve been keeping an eye on the businesses I know, trying to get a feeling for which way the commercial winds are blowing.
Two immediate trends are observable:
1. Customers are leery of advertising that attempts to capitalize on the situation.
2. Business owners are reluctant to spend money.
Sales themselves have been mixed. Some businesses have seen a sharp decline in responsiveness. Buying is sharply down. Others are doing “OK” and a few are getting better results than ever.
What’s working? What’s not? Why?
Most of the financial advisory services I know saw a sharp dip in buying this past week. Two notable exceptions: A newsletter that donated 100% of requested subscription revenues to the Red Cross. And an options advisory service that has had a very strong recent track record (including predicting Monday’s crash several weeks ago) and offered its customers a convincing way to make money despite all the bad news.
What else has been off? The real estate businesses I know were off for a few days but are now back on track. There were some cancellations for some of the conferences and seminars I’m involved in, but only about 10%. Air travel has been decimated — judging from the two flights I took in the last two days — but a business that takes Americans on tours of Latin America and the Caribbean was still booking reservations.
AWAI, the copywriting school I consult with, reports brisk sales. And ILP, which sells dream retirement properties on Nicaragua’s Pacific Coast, is still selling lots.
Every large business I work with is expecting sales to dip and is anticipating that by planning cost reductions. I know a few bankers and they are worried.
There’s not really enough here to form a reliable overall impression, but I don’t mind speculating on the evidence I do have.
I’m guessing that we will see a significant slowdown in production in response to a sharp decline in buying. This will mean layoffs, unemployment, etc. If we go to war in a big way — with a draft and a large infantry commitment — many of those unemployed men and women will be taken up by the military. This will put a bigger strain on a treasury that is already stretched tighter than a rubber band holding up an anvil.
Notwithstanding all of that, there may be some business activity that will do very well. Ground transportation will obviously pick up, at least for a while. I hear gas mask makers are already out of inventory. Businesses that sell second-income opportunities should do well. As should advisory businesses that help people cope with financial problems.
But what do I know? I’m looking at just a few small signs out of millions.
It’s natural and intelligent to speculate about the future. It’s foolish to think you can predict it.
So we’ve done some speculating. Do some of your own. Then imagine how you could move yourself and your business in that direction, if future events prove out your instincts.
How can you change yourself? How can you change your business?
[Ed. Note. Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]