Find The Income Streams In An Economic Downturn

September 19th, 2009 by admin

Where Do You Find The Income Streams In An Economic Downturn?

As countries across the world struggle to re-balance their economies, entrepreneurs are reeling having to make tough and tougher decisions to stay alive in business. Many are being forced out of business and yet many more entrepreneurs are tethering on doing a balancing act to stay in the game. But some savvy business owners are churning hefty profits even in these tough times.

The marketing arena has evolved and changed both online and offline. Though the core aspects of business do not change much; product, categories and industries which once generated the streams of income have changed. Many business owners do not respond well to change especially rapid change, so it is no mystery why many are getting left behind in a constantly evolving business arena and a prolonged economic downturn.

Online entrepreneurs are racing to get in the game, whether it is to bring in a supplemental second income or to replace a lost income stream. But marketing online is no picnic in these times either. The game here is fast pace, swiftly changing and many times has a steep learning curve. Marketers find that curve very, very slippery and their profits take a beating! Online marketers are reeling from rapid technological evolution and those who are not too savvy are getting left behind or simply stagnated.

There’s money to be made…

There’s money to be made in an economic downturn as new doors of opportunity open, no doubt about it, however, 2009 will demand a more savvy entrepreneur with solid marketing skills and sharp decision making ability. Business owners who churn a profit in the final quarter this year will be those who are quick on the draw. It is survival of the fittest in this economic climate.

Below are a few quick notes to help you find the streams where money is flowing instead of standing still and waiting for the stream to diverge and come towards you or running helter-skelter in chase of fly by night operations:

1) Demand: Demand changes and shifts significantly in a downturn. Consumers reallocate their spending into different products and sometimes industry. You can’t really force people on what to buy; you can only entice people to buy from you. But first, you need to know what they are demanding. So the gist of the story here is to do your due diligence and work on establishing what it is that consumers are demanding today in 2009.

2) Core Skills: Do become a student of business, especially for new entrepreneurs. No one is born a great marketer! Marketing and entrepreneurship are skills, which have to be learned. Like any other discipline it takes some time and experience to get good at it. So roll up your sleeves and be ready to learn. You should be able to draw up a simple business/marketing plan. You should be able to decide on which marketing strategies you will implement. You should be able to decide on marketing tactics to achieve your projections. You should be able to tweak and fine tune to improve revenue and profits. These are the basics of business and they will not change. This is the core.

3) Shifting Streams: So while we’ll see a drop in spending in some product and service categories, there are parallel categories where spending is up. Victor Cheng in his book ‘The Recession Proof Business’ sited the example; that while we may see a steep drop of new car sales, we will see a significant rise in spending in car repairs and services, which prolong the life of an existing vehicle. It makes perfect economic sense. People are reallocating where they spend their dollars. You will be able to identify these new income streams if you stay alert. Hence, you the entrepreneur need to be operating with a hawk’s eye view of what’s taking place around you in the economy. And don’t wait for others to tell you what to do. You do your own homework and research.

4) Speed Of Adapting: Many entrepreneurs are doing what they know best, and that is waiting, standing and hoping to ride out the tornado of a damp economy or a recession as it is called. While this may work with mild downturns, this strategy can be detrimental in a longer draw out economic squeeze. Running at a loss for many months can dry up the well and entrepreneurs will simply run out of resources to stay alive in business without enough revenue coming in. So not only are you, the entrepreneur looking for the new emerging income streams but you have to flex your entrepreneurial muscles into action quickly and adapt to change swiftly. Time is of the essence!

5) Diversification: Entrepreneurs who are adapting quickly also must recognize that diversification can be an outstanding strategy to keep cash flow positive and timely. When times are good and consumers have a reasonable amount of disposable income, entrepreneurs focusing on one niche market can churn enough profits to live lavishly well. In unpredictable times when consumers are re-directing their dollars, entrepreneurs who are ready to diversify and grab a bigger market share with new niches, will reap bigger profits.

So overall, we know for a fact, that despite an economic downturn money is still being earned and money is still being spent within the economy. Entrepreneurs should ask themselves the following questions:
1) What goods and services is the money being spent on?
2) How quickly can I get consumers to buy those from me?

And for those who are able to answer and act in a timely manner, this could make the difference between, pulling in solid profits from several streams or folding up shop and going home in this economic downturn.