Kristin Luck
I launched my first business, OTX, in June of 2000. As it turns out, nearly the worst time to start a business, as in 2001 the “dot com” bubble burst. Fortunately, we had a diverse client base and a technology platform that was literally revolutionizing the way movie studios and CPG firms conducted research, and we not only survived the recession, we thrived. In 2003, OTX was ranked the fastest growing research company in the world. But it wasn’t just a strong product and good fortune.
The success that we had would not have been possible without doing all the things that position you for business growth – namely strategic planning and investing in the right sales and marketing activities. In essence, we were focused on rainmaking long before the drought came.
Wall Street’s biggest banks have been hinting that we are likely to have a recession (two down quarters) in the not-too-distant future. Whether or not a recession becomes a reality, the point is to prioritize the right activities now.
Here is where to focus:
PRIORITIZE SALES AND MARKETING
Sales and marketing activities and investments are important not just to hedge against a downturn, but because it is the right focus for every business. Investing your time, your energy, and your resources in acquiring a diverse base of clients, as well as growing and nurturing existing clients, ensures that when you do experience a soft quarter (or two) you can ride it out without going under. Yes, marketing is an investment, but the cost of doing nothing is far more onerous.
UNDERSTAND AND PLAY TO YOUR COMPETITIVE STRENGTHS
Defensibility is key. Too often I see businesses trying to be all things to all people to ensure they can serve a wide variety of clients without realizing that playing to your core strengths creates real competitive differentiation. When I work with early-stage firms, I’m often advising on fundraising where potential investors focus on one key question... "What is your competitive moat?"
The term “competitive moat” (popularized by Warren Buffett as an “economic moat”), refers to a business' ability to maintain competitive advantages in order to protect its long-term profits and market share from competing firms. A clearly defined competitive moat is as important for established companies as it is for early-stage firms. Click here for more insight into how to create your “competitive moat”.
MINIMIZE OVERHEAD COSTS BY CREATING STRONG PARTNERSHIPS
Advertising legend, Cindy Gallop, often talks about the benefits of “competitive collaboration”. Competitive collaboration offers opportunities for businesses to share solutions that help grow and build overall markets while putting the onus on each brand and business to identify its own inner values and philosophies that make it uniquely competitive, and therefore able to thrive in an environment where ‘a rising tide lifts all boats’.
No amount of late-game hustle can make up for a lack of preparation and planning.
The time to build your client base, establish your competitive moat and develop strong partnerships is ideally before you desperately need to do these things. Start making rain!