Houston Business Journal: Starting a Business : Business Advice

esivyjifag.wordpress.com
In order to understand why a down markegt creates so many opportunitiesw for astartup company, you first need to understand why a bull markety makes it so difficult to succeed. In a bull the cost of everything skyrockets. As more capital becomes so doesmore competition. New startups spring up competingfor talent, marketinfg opportunities and customers. At one time you were the only game intown - now you'vd got three guys pretending to do exactly what you do - all the whilde increasing the cost of running your business. Conversely, a bear market drives the cost ofeverything downward.
Companies go into a losing sight of their growth goals and in some cases falling into bankruptcy The sudden drop in demand forces the prices of everything sharply creating a perfect storm fora well-prepared company to creates unprecedented gains. Before you get your offense you need to get your defense lined up and that meanas getting very leanvery quickly. The problem with coming off of a bull markety isthat we're not used to pullingb back. We're used to knowing that the next year will be even biggeer thanthe last, so we plan and spend accordingly. This time we've got to create a very differenty plan.
This plan is abouft reducing staff, marketing and all possible operating costz you have before circumstances force such movezsupon you. Make no mistake, this is goin g to suck. Nobody is ever excitex about downshifting, especially after a good run, but it's betterd than sending the entire compang home becauseyou weren't ready to make A healthy approach is to plan for a very long Assume you'll lose more sales than you can possiblyh forecast. Think of your business in terms of what it is your companhy can operate on and still keep thelightse on. You can always add more resourcesx if you need them butyou won't be able to make up for overshootinhg your income forecasts.
Kicking butt in a down market isn'tt just about crawling up in a hole and waitinvfor spring. It's about getting lean so you can get focusexd onhunting again. Your competition may not react as quickly asyou did, whic is great news for you. Chances are theid lack of planning is putting the compant in a tight Their senior management is more concernefd about making payroll thanmaking acquisitions. Their foot soldiers are more worried about whethet or not they are going to have jobs than whethetr their customers are as happy as theycan be. And that'sw where you swoop righty in.
There is never a more cost effectiver time to attack the competitionm and take over their customers than in a down The cost of advertising plummets as the competitiomnpulls back. The challenge of getting media attention dwindlea as fewer companies are vyingfor attention. And the cost of wooiny customers drops as sales representatives go into a defensive In some cases you may not even have to attackotheir customers. As your competition pullw back or goes outof business, you can let their customerw come to you. Try that in a bull market.