The global economy is taking a nosedive, but what should you do about it?
We’ve all seen and heard the news: the economy is fucked. At least, it is getting that way. As people begin to panic, worrying about their future, they seem to be losing sight of what really matters: your own personal economy. Worry less about the global economy and more about your own personal economy. If everyone does that, then the global economy might stand a chance of recovering.
The economy is currently taking a nosedive. While some economic forecasters are being dangerously optimistic, the vast majority would suggest that this is only the beginning of a decline.
With all the talk online about the potential ramifications of the upcoming recession, it can be easy to get sucked into the fear. Fear that it is all coming crashing down and that your business is in danger.
Things haven’t, and won’t, change much for you
Those fears are legitimate, your business is always in danger. That’s always been the case. In your heart, you know this already.
Building the business you have has been a difficult journey. It would be somewhat of an understatement to say that it has been strenuous, wouldn’t you agree?
But, you muddled through, and you are still standing. That is, in itself, an incredible feat. Or, more accurately, you are incredible because only you got you and your business this far.
Things will get tougher. My opening statement was not meant to dismiss the danger of the impending crash; that danger is very real. But the only thing that you have any control over is your own personal economy.
What is your personal economy?
You might be wondering what on earth I am talking about when I say personal economy…
Your personal economy includes things like income, assets, savings, and debt. It is more than that, though; it is your spending and credit habits. Examining your personal economy is an important first step toward understanding and controlling it. Most of us only have a vague idea of the state of our personal economy. After all, it can be scary to look deeply into our own lives. When you lay everything out, you get to see where you are bleeding money, where you could be spending more effectively, and where you could cut back.
Figure out the state of your personal economy right now
Take an inventory of all your incoming and outgoing expenses, credit agreements and debt, and all sources of income. Laying it out will show you where you currently stand and offer insight into where you are headed.
How much of your debt can you clear? How much can you reduce your outgoings by? Could you consolidate your debt to get a better rate? If you continue as you are, can you sustain it? And so on. These questions give you a high-level oversight of your current spending, spending habits, and ability to manage your finances.
Are you using that paid subscription?
Now that you’ve laid it all out to see, look at where you can cut costs. Have a look at your outgoings. Of all of those things, what could you live without? Are you paying for memberships and subscriptions that aren’t being used?
I did an analysis of my own personal economy recently and found that I was paying for subscriptions to far too many streaming services, news services, and a few other things. I dropped quite a few of them and only kept the ones in regular use. This alone has saved me around £60 per month. I know that doesn’t sound like much, which is because it isn’t, but £60 per month over the course of a year amounts to £720. Again, that may not sound much, but it is a significant amount of money to be spending on services that haven’t been used for 6+ months.
People are often surprised by how many of these £5 – £15 subscriptions they forget they even have. Individually they amount to next to nothing, but when you add them all up, it’s a different story altogether.
There are potential savings to be had in your supply chain
What about your suppliers? Is there a cheaper alternative? And if so, does it still provide the level of service that you need? And if it does, what is stopping you from changing supplier?
There could be many things stopping you from changing suppliers, but a most pressing matter for many of us as small business owners is loyalty. We have built relationships with these suppliers, so we could weather the storm with them and see where it leads us. If that is the case, then think about whether it’s possible to renegotiate the terms of the deal you have with that supplier to mitigate some of the danger. It doesn’t necessarily mean that you can haggle them down in price, but you may be able to change the terms of payment and delivery to help you manage the costs associated with using that supplier.
The thing is, loyalty is a brilliant trait to have when you are relatively comfortable, but your survival matters more. The safety and security of your business, and yourself, are far more important than your want to be loyal. That loyalty won’t be reciprocated when you hit rock bottom. I’m not suggesting that loyalty is not important; I am merely pointing out that you need to look out for yourself first, which is the very thing your suppliers will be doing for themselves.
Cost cutting is only ever a short-term measure
So that’s something you could look at to cut costs. It’s not much, I agree, but it’s something. However, it will only get you so far and is, at best, a temporary measure and only forms a small part of what will be required to keep your head above water.
The other side of that coin is looking at ways to increase your income. Whenever I need to generate some extra income, the first thing I always do is contact my previous clients. I ask them how they’re doing and if there’s anything I can help them with or if they know anybody that could do with my help.
Referrals and repeat customers are worth their weight in gold
I’ve managed to get a lot of referrals and repeat customers that way, so I really cannot recommend it enough. Don’t overthink or complicate it, there’s no need to wow these people. They’ve already been wowed enough to work with you the first time. Just a simple message to reinitiate contact with them with a simple, direct question. Is there anything I can help you with? Or, do you know anybody that could use my help?
You might think that’s bullshit, but your existing and previous customers are a potential goldmine. They offer you a shortcut to increasing your income. That’s one of the many reasons I spend so much time discussing the importance of building and maintaining relationships in your business.
Find a new target, aim, and fire
Something else worth looking at to increase your income is to think about your target market. Specifically, is there a potential new target market for your existing product or service? Is there another group of people who experience the problem that you solve and are looking for a solution? If so, create content specifically for those people and start reaching out to as many of them as possible.
If you are unsure whether there’s a new target market out there, then the first place you should look is at your competitors. Who do they serve? Are they the same group of people as you? As well as your competitors, look at businesses offering products or services that are different but complementary to yours. There will likely be a lot of cross-over, which provides you with a brand new target market to reach.
That is a really simple way to generate more income each and every month.
Stop, and collaborate
Something else worth looking at is joint ventures. Is there anybody out there that offers something that complements what you offer? One of the businesses I own is a copywriting business, which you can find here: http://www.thecopyadventure.com/
Occasionally I will partner up with videographers, graphic designers, and so on. To create services and, more importantly, to share the opportunities created through the power of our combined audiences.
Joint ventures and collaborations go beyond just audience sharing. They also show your audience that you are thinking about them and considering their needs. Joint ventures open up new income avenues to explore.
Affiliates and referrals
As a business owner, you have a service or product to sell, a solution for the customer to implement. What if I told you that you could increase the value of your offers through affiliate and referral schemes?
Let’s say, for the sake of an example, that you offer a web design and development service. Your customer needs a website, but they also need to market the website. You’re a tech guy/gal/other, not a marketer. You could reach out to some marketing firms and negotiate a commission for every referral you send their way. You get a nice commission without any extra work, the other business gets a new customer, and your client gets exactly what they need. While I hate the phrase “win-win scenario,” it really does apply in this instance. Seems pretty obvious when it’s laid out in black and white, eh?
I have previously written about how to get more referrals, you can find that article here: https://mybizacademy.co.uk/referrals-made-easy-easy-to-get-easy-to-give-part-1
That’s enough to get the wheels turning, now go and implement
So those are some straightforward and easy-to-implement ways to increase your income and reduce your outgoings.
The most important thing to remember as time goes by is that you will weather this storm. You have been through the wringer already, and you survived. When the economic shitstorm begins to subside, you will be left standing, just like you always have, with your head held high.
Now is not the time to panic. Despite what media and governments seem to want you to do, now is the time to knuckle down and get on with some work. Start building relationships, creating new customers, and nurturing current and previous customers. Double Down and get grafting. Your work ethic and thoughtful intelligence will see you through the hard times. The resiliency you have from the experiences you’ve faced will give you the strength to keep going.