The New Economy: Disaster or Opportunity?

“Whether you think you can or can’t, you’re right.”
Henry Ford

Everything about the economy is bad these days. Unemployment is rising rapidly. The housing industry is in free fall. The automotive industry is collapsing. Experts believe that GDP may actually shrink this year. At the same time, consumers are being squeezed by rising credit card rates and dramatic losses in retirement fund accounts. For any business, these are uncertain times.

For many companies, the knee-jerk reaction to this situation is to slash budgets, lay off workers, and batten down the hatches. Too much risk. Way too much uncertainty. Unfortunately, these decisions are often misplaced or mistimed because they are made outside the context of a strategic plan. This is critical: in the absence of a defining strategy, any decision is potentially a good one – or a bad one. How can you really tell? The point is that many businesses tend to flounder in uncertain times because they lack any semblance of a plan to guide their decision-making.

The question, however, is whether or not there is opportunity in this current economic uncertainty. Invariably, the answer is yes, and the savvy business owner will seek to identify and capitalize on those opportunities. Case in point: when auto dealerships began to suffer from declining new car sales, some immediately revised their market strategies to capitalize on used car sales. Auto Data Corporation reports that, while new car sales were down 30 percent in January 2009, sales of pre-owned cars increased 10 percent. Some dealerships are revising their business models to initiate programs to aggressively acquire used cars, provide longer-term used-car warranties, and improve repair and maintenance services for customers.

Those businesses that see opportunity in uncertainty will invariably flourish.

Success, however, always begins with a plan.