Feb. 28, 2020
All the signs of a perfect storm for a recession are coming together. The stock market has fallen 3,000+ points this week and is now in "correction" territory--Wall Street's softer term for the crap is hitting the fan. A significant stock market decline is usually an advance indicator of an impending recession, based on history. Couple that with the coronavirus, which is starting to impact economic activity. As more people in the U.S. become infected, this will affect travel and activity and lost business in a whole range of sectors, and people will cocoon themselves at home over fear of getting exposed.
Industries that will suffer if the coronavirus gets worse... any activity that involves a large public crowd, such as movie theaters, festivals, concerts, sporting events, cruises, casinos, plus: restaurants, seminars, multi-level distributors, department stores, air travel, travel agencies, vacation resorts...
Industries that will suffer in ANY recession... car & truck sales, real estate/housing sales, home appliances, eating out, spas, vacation travel, luxury goods...
Industries that will benefit... makers of face masks (3M), sanitation services that clean and sanitize office and commercial buildings, doomsday prepper services & supplies, Instacart/grocery and meal home delivery services, any virtual/online service that delivers its product/service online or by phone or Skype, telemedicine, Netflix movie steaming services, coaching by phone, mail order companies...
In my view, recession this year is almost a certainty. So, what does that mean for companies? What should you do and what can you do?
First, prepare. Cut any unnecessary costs and staff. Follow up on all leads and prospects, and treat current clients very well. Make sure that your website is up to date, functioning properly, and capturing leads. A check of your SEO is in order, to maximize traffic and conversions. Check public comments about your company on Yelp and other forums, and address any negatives or problems.
Another thing to do is to beef up your digital capabilities--delivering your services virtually, via phone coaching, Skype, email, chat, and other online vehicles. Beef up your social media accounts and make sure your Facebook and Instagram accounts are up to date and include "calls to action" and have ways for consumers to connect with you. Do more posts that add value. Consumers will want to access your service from home, rather than in person. Do you have an online/virtual program now? If not, create one, and price it less than an in-person program.
This may also be a good time to squirrel away some cash and earnings to use as a cushion to weather the recession.
Slack time during a recession is a good time to also update and refine one's email leads database, make more outgoing phone calls, do some deep market research, evaluate franchise operations, form more joint partnerships with companies/services that enhance your service, and to develop some new products and services (diversify) that can be launched.
Think about your local competition. Will any of them be likely to go out of business during the recession? If so, how can you capture their customers?
The recession is coming-- prepare for it! It can be a time of opportunity as well.
Note: John LaRosa, MBA, Marketdata's President & Research Director, an independent analyst of a wide variety of service and healthcare industries and markets for 40 years, is available for consulting and coaching. He can help with business plans, competitor analyses, market potential estimates, new product development, strategy, and more.
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