How To Take Advantage of a Bad Economy

Posted on | September 16, 2008 | No Comments

The stock market plunge over the last couple of days, the effective nationalization of the mortgage industry, the total destruction of companies we thought were indestructible, the unpredictability of the Fed (and the traders’ responses) have all led to a bit of hysteria.

People are scrambling!  If big names like Merrill, Lehman, Bear Stearns and AIG can fall, who’s immune?  If even those companies that manage to survive are making deep cuts, who’s job is safe?

We are officially living in an alternative economic universe.  If up is down and high is low, what else has changed?  How can we take advantage of this?

Clearly, there are no guaranteed, fool-proof answers, but here are a few pretty good suggestions.

Know what’s still working. There’s an assumption that everything is broken, that nothing will work in this economy.  True, nothing is working as it once did but there are a few corners of the economy still work camping out on.  For instance, here’s a list of the places where folks are still spending money.

Where people are still shopping:

• Gas Stations (Hate the cost and the politics but my car’s a junkie)
• Hobby, Toy and Games Stores (The “business of distraction”)
• Warehouse Clubs and Superstores (For much of America bulk still screams value)
• Beer, Wine and Liquor Stores (Even Amazon’s jumping on the booze cruise with their own online wine store)
• Luxury Retailers (High-end stuff for the super-rich never goes out of style)

Know the growth spots and how to capitalize. Knowing that health care, mining, education and government are the industries are still growth industries is about a fourth of the battle.  One-fourth is figuring out how you can take advantage of this knowledge, i.e. getting a degree or certificate in health care administration or medical transcription, looking for a job or starting a business in the mining or mining support industry or getting a teaching certificate so you can share your experience.

Outsourcing can come to a home office (or laptop) near you. Many businesses have had to lay off workers.  Many of you have been laid off.  But, if your former employers continues to function, they will still have to get the work done somehow.  Labor market stats show temp agencies and staffing firms are not getting this business (possibly because companies don’t want to pay the markup, and don’t really need help attracting candidates), so the work is up for grabs.  There are plenty of online sites set up to help you market your skills.  You can set up your own website, blog or online portfolio.  And, you can advertise and network locally.

Globalize your business. Hate to say it, but the days of setting up shop in India or China and getting cheap labor are done.  You can still contract with Indian or Chinese companies, and may still be able to find a good deal there.  But, if you’re not quite ready to offshore a division of your business, you can still take advantage of globalization by marketing and exporting your products to consumers in other countries.  There’s still demand for U.S. goods, and our prices are now relatively cheap (read: attractive).

Take advantage of the shakeup. While the big guys are selling themselves to the lowest bidder, figure out how you can fill in the gap.  That means leveraging social media to market your products, striking partnership deals that allow you to reach new consumers or markets and taking advantage of your community ties to keep your coffeehouse register ringing.  Whatever your product/service, remember that just because people can’t afford it doesn’t mean they don’t still want it or need it.

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