Are Recessions "good" for the Economy?
© David Newton
4/23/08
In Australia we are currently having a boom economy, but at the same time, we have a debt crisis looming. With one on 5 households running the risk of foreclosure due to higher interest rates.
It’s just like 1989 all over again - employment shows almost no slack, with many businesses finding it difficult if not impossible to hire new staff to meet demand. At the same time, we have people working extra jobs and moving towards part time small businesses to keep up the payments on their homes and credit cards.
I would call it a "Debt Recession" - as we have limited consumer demand due to the higher interest rates. At any rate, it sure is an unusual situation where we are hearing stories almost each day of how high levels of debt are making people homeless overnight and putting them out on the street.
Maybe a full on recession is what we "need" to clear out the economy and start the slate again? As Paul Keating said; "It was the recession we had to have" when asked about the punishing slide in Australia in the early 1990's. Why did we need it? Because it makes people come back to earth and do things properly again.
Increase your income circle or cut back costs?
There is only so much you can do to cut back on expenses. Some of the basics are useful and in order to feel some sense of liveability, we need some things to make us feel human while going to work and living. In reality, you can cut back about 20% on costs without affecting your status level. Beyond that, it will hurt you and your lifestyle.
Expand your income - the better solution
So, should you work an extra job?
I think not. Extra hours will only be taxing and make you tire in the process. You are far better off starting a part time business and aiming it to replace your regular job at some stage later down the track.
In fact a recession is a "good thing" especially for starting a new business. Here's why -
• New businesses will find it easier to get new staff
• Like the last recession, office space was cheap as there was a lot of space to rent and rates were lower
• Many middle managers went right into a new business of their own thus making their talent available to all
• Businesses marketing "business opportunities" had the highest sign up rates ever after the last recession hit
• After the dust settled from the last recession - the stock market picked up a couple of years later and by 1993 we've been on a boom ever since - if we had a recession - now - the pain won't last that long
Selling Business Opportunities
One thing I remember about reading the BRW back in 1992 was that thousands of people were joining everything from mlm companies to franchises on a 'mass scale' almost immediately after the last recession hit. This really impressed me to read such news. I don't really see the next recession being any different. People will do the same things again.
If you are selling business opportunities, then don't be slack. The next recession is just around the corner and you may miss out if you're not ready for it. There will be a tidal wave of people out there wanting to enter businesses and if you fail to recognize that fact, you could be last in line to profit from it.
What to do now . . .
• Work on your business opportunity to polish your offer and your systems now while it’s still early
• Create a test market for your opportunity so that when the recession hits - you'll be sure of what makes your business opportunity sell
• Make your offer available online – and – offline i.e. Have both an online sales pitch and a mail order version of the same thing
• Make it easy for people to buy your opportunity - one failing point most biz op sellers have is they don't have the ability to take credit cards or multiple payment methods - plainly they will leave 50% (or more) of their sales behind at the door if they do so
• Hold seminars and online tele conferences to promote your "biz-op product" - make yourself 'human' and available to others who have questions don't simply hide behind a mailbox and be an unknown marketing the end, people buy from people. Let them get to know you first.
More About the Seminar Marketing
One good way to market business opportunities is via holding free seminars. This fulfils a few sales necessities, i.e, it gives you a public face, your prospects see you up close and personal, plus they can buy at your seminar meetings.
Okay, you could view running a seminar the same way as how a "party plan meeting" works. It's almost the same outcome, customers remain confident to buy at the end of the meeting.
What’s more, you'll discover new prospects that turned up at your meetings who may have never purchased before.
Again why are recessions good?
I think the biggest point is that as the unemployment rate goes up; there are a lot of people with time on their hands. They don't have an ‘image crisis’ with going to a business opportunity meeting like they would have when things are going well. And most importantly, they have a more open mind to looking at ways to generate new income streams - something they lacked during the good times. Yeah, you could say the recession humbled them.
David Newton runs a successful web based business online. Learn more about what he does online at: www.DavesOnlineWorld.com - Have you ever wanted to make money via Speaking in Public? See this site:
www.SeminarSalesSecrets.com - to understand the full background of this article.
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