I have a close friend who has a successful business that has benefited from the growth in the economy over the last 12 years. He’s gone from strength to strength, hired a bigger team, and now has multiple revenue lines. Back in 2006, his original core business was tough. He carried a lot of inventory, with thin margins, and lots of face time. He had a fire in his belly and never stopped thinking about his customers, his business, his craft, and his growing family at home.
In 2007 things were getting frothy and a little nutty with all the money flying around. Easy credit, adjustable-rate mortgages…we all remember the deal. A lot of competitors started showing up. They were b-players and low quality, but there was a lot of work to around so everyone was feeding from the same trough. Everyone was surviving, but over time everyone’s margins got even thinner. Then the credit crunch hit in 2008 and things slowed down very quickly. The market softened and everyone was left carrying a lot of inventory with no buyers. In 2009 and 2010 the competitors closed shop, left town or just quietly walked away.
In booms times, things margins and A+ customer service didn’t matter, but when things got tight it was a different story. His company weathered the recession and survived because he delivered a high-quality product and was match fit when the real test arrived. Once the dust had settled and things slowly started to show signs up life again he was there to clean up. He hired the best people, consolidated some of the survivors and continued to build.
It’s weird to think that the recession was the launching pad.
Stay match fit and run scared.