This is a newsletter article from the June 2010 edition my monthly email newsletter. If you like it and aren’t signed up, simply fill in the form to the right or at the bottom of this post to join.
Has The Light At The End Of The Unemployment Tunnel Come Back On Yet?
Have you heard the phrase ‘due to cost cutting, the light at the end of the tunnel has been switched off’? The past year has seen an unprecedented amount of changes to the global economy, and an international recession has left many of us feeling disheartened about our finances, and concerned for the future. Unemployment is on the rise, and this leaves people feeling unsettled and insecure.
I get emails every day from people who have been laid-off after years of service and are starting anew.
The days when people had a trade and a job for life seem to have passed, and many of my clients have been made redundant, laid off because companies are struggling to meet their debts and make enough profit to keep going.
Regardless of what industry you are in, and what your field of expertise is, you will have no doubt been affected by the global financial crisis. No industry perhaps feels the crunch as much as the small business owner.
How recession affects us as self-employed workers
As soon as the economy begins to look bleak, people immediately start to find ways of economizing. It stands to reason that trades which operate as a niche are affected by this change in financial circumstances.
Anyone who operates in a field which is viewed as a luxury, rather than a necessity, will feel the pinch as their new and potential customers tighten their budgets and dispense with all purchasing that isn’t necessary.
Very few businesses thrive in recession, and for those of us who have just started out as small business owners trying to make a living online, it can be tough to stay positive.
The services we offer are no longer as appealing when people are struggling to pay their domestic bills, and the projected financial growth we anticipated may need a serious rethink in times like these.
All doom and gloom?
Despite this, it is still possible to make a great living by working for yourself. Ironically, as the economy took a downturn, there were more small businesses being set up than ever before.
This is due to two things – firstly, the number of people being laid off meant that we were looking for new opportunities, and less jobs led to an upsurge in the creation of new businesses. Secondly, people are seeking ways of sharing their knowledge and providing services at a time when resources are cheaper and potential staff are of a better caliber than they have ever been before.
How to turn redundancy in to a positive experience
Being laid off can be really tough to deal with. Some people lose confidence in themselves and take the redundancy personally, while others feel insecure about the future and struggle to know what to do next.
Having said that, it’s amazing how many people I know that have seized on the redundancy as an opportunity to leave behind a trade they had fallen in to by mistake, and decide to do something they feel passionate about. While it may not seem like it at the time, being forced to make a new career choice can be a truly liberating and positive experience.
The main thing to remember is you need a sense of perspective when redundancy hits. In times of recession, companies panic and cut costs. There is usually no way this decision can be personal to you.
You only have to look around to see that sometimes the best people in an organization are the first to go, as the likelihood is their talent and ability brings them a good wage. A good wage makes them expensive to keep, so companies are cutting out management to save as much money with as few casualties as possible.
An upturn in the economy is ahead
Anyone who watches the news with any regularity will have sensed the recent shift towards a more stable economic market. People are emerging from the shock of recession and spending again, albeit a bit less liberally than they were before.
It is a better time than ever before to identify gaps in the market, think about what your passion is for, and work out how you can make a living doing something you love.
How we survive cost cutting as small business owners
One of the worst parts of running your own business is hearing clients come to you and say “I need to achieve x,y,z, but I can’t afford it. Can you help?” This puts us in a tricky position. On the one hand, we instinctively want to support people we know and provide services for reduced costs. On the other, we need money to survive the economic downturn.
We can deal with this situation in a number of ways. The first, strangely, is to put our prices up for new customers, while helping our existing clients at a reduced rate. This means when we land a new job, we can mitigate our discount by pulling in a higher salary.
This may sound a bit Robin Hood, but there are still organizations out there with capital to spend, and they may as well spend it on you.
Another way to get through is to barter. The chances are, everyone who comes to you asking for discounts runs a business and has a trade. When money is short, why not start exchanging goods and services, rather than cash? If you know someone who writes, swap marketing help for technical guidance. If you know a mechanic, help them out in return for getting your car serviced.
This really does work in the same way as paying with ‘real’ money, and you stand to forge great relationships that will last long after the economy has recovered!
Staying positive in the face of slow business growth
It may be tough to remain calm and confident in the midst of redundancy, or keep faith when you are running your small business and trying to make an income, but it is possible to not only survive, but thrive in times of economic downturn. Stay honorable, stay accessible, and stay positive, and the light at the end of the tunnel will soon be switched back on.