The CEO Refresher Websites for Professionals
Take control of your online presence
with your own professional website!
  Gradient
       
   

Trouncing the Recession like an Upstart!
by Donna Fenn

 
   
 
   

Small business owners are typically an optimistic lot, even in the face of dismal economic conditions. But a recent American Express OPEN Small Business Monitor survey found that GenY entrepreneurs are more optimistic than most. "More than three-quarters (80%) of these entrepreneurs have a significantly more positive outlook on business prospects versus GenX and business owners overall (each 55%), and Baby Boomers (52%)," the survey noted. GenY business owners were most likely to be hiring and making capital investments, and least likely to have cash flow issues and to be "stressed out" about the economy.

Those findings didn't surprise me in the least. Last spring, as I was wrapping up my book, Upstarts!: How GenY Entrepreneurs are Rocking the World of Business (McGraw-Hill, 2009), I decided to do a short survey of the 150 young entrepreneurs I had interviewed. Among other things, I wanted to know how they were surviving the recession. Here's what I found among the respondents: 20% said the recession had actually been good for their companies; 32% said they had felt very little impact; 44% said revenues would be lower in 2009 but that their companies were stable; and only 5% said they had taken a big hit and were barely hanging on.

When I followed up with some of them directly, it became clear that many entrepreneurs in this generation actually welcomed tough economic times. They said that the recession was teaching them the art of laser-like focus, and compelling them to make better decisions, to become more frugal, and to initiate systems and procedures that would help position them for economic recovery. Here are a few recession-trouncing strategies from Upstarts! that you can apply to your own company:

Pursue repeat business. It's far less expensive to nail down repeat business from your existing customers than it is to land new ones. Now is the time to reap the benefits of those good customer relationships that you've been cultivating over the past few months. At Undercurrent, a Manhattan-based digital marketing firm, co-founders Aaron Dignan and Josh Spear offer their young employees three levels of quarterly perks, depending on how many repeat business deals they manage to rustle up as a team. Three deals might earn everyone a Friday afternoon at the movies; six or nine deals could mean massages for all or a shopping spree at nearby Whole Foods. New rewards are offered every quarter to keep things interesting. The program keeps employees motivated and Undercurrent on the radar screens of important clients.

Focus on your core competency. Robert Weber's company, W3i in Sartell, MN, markets third party computer applications and has been growing 53% a year. W3i continues to post significant gains this year because, Weber says, he had the foresight to eliminate divisions of the company that were hogging resources without generating significant revenue. He shut down a lead generation business and sold a mobile applications business "we never really figured out how to integrate into our main company." With a single point of focus -- "to be market leader in applications distribution" -- Weber says the company is well positioned for growth this year.

Snap up top talent. Layoffs at big companies mean that there's a surplus of great employees on the market now. Recently, Joel Holland, the CEO ofFootage Firm, a Reston, VA company that sells stock video footage, put out the word that he wanted to hire a new head of web development and a top sales person. "I was shocked to get applications from executives who, in a better economic time, never would have taken my call, let alone responded to a job posting," he says. "I hired a rock star web developer, and I'm in talks with a former hot shot at a major online media company to take the sales lead." He's also hired a part-time CFO, and picked up numerous talented freelancers -- people who would have been inaccessible in a better economy.

Respond rapidly to market shifts. The economy is almost certainly having a profound impact on your customers: they may have altered their purchasing habit, or found themselves with entirely different needs. It's your job to respond to those shifts. Adelaide Lancaster and Amy Abrams, co-founders of Manhattan-based In Good Company Workplaces (IGC), run a membership organization that provides women business owners with shared office space. Previously, their clients were mostly mature, established business owners. But Lancaster notes that the recession has created more "entrepreneurs of necessity" and she's seeing more opportunity for IGC among startups. So the company, which also offers consulting and educational programs to its members, has "begun to offer more start up oriented programs and an accountability group for folks that were more used to working in a structured environment and need help adjusting to working on their own," says Lancaster. She and Abrams are also partnering with professional organizations that have traditionally catered to corporate women, but are now filled with people who have lost jobs and are considering starting companies.

Look for hidden sources of revenue. Sometimes your best source of new revenue is right under your nose. That's what Talia Mashiach, the CEO ofEved Services in Chicago, has discovered. Mashiach's company partners with hotels to provide their corporate clients with access to all the outside independent vendors they need to organize an event (such as florists, videographers, entertainment, transportation, etc.). Her competitive edge is the proprietary technology she developed to manage those vendors efficiently. The system works so well that Mashiach is now marketing it to other companies. "They'll use our technology platform and pay us a transaction fee," she explains. Also included in the package is access to an award-winning corporate university that Mashiach created for her own staff called Eved University. It's not the revenue model what she had in mind when she first developed the technology, but it's one that she now expects will spur significant growth for her company.


       
   
 
       
   

The Author

Upstarts!

Donna Fenn, author of Upstarts!: How GenY Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit from Their Success and Alpha Dogs: How Your Small Business Can Become a Leader of the Pack, is a contributing writer at Inc. magazine. An expert on small business trends and entrepreneurship for more than 20 years, she is also a community leader on Work.com, a featured expert on SBTV.com, and a blogger on Inc.com. She lives in Pelham, NY, with her husband, Guian Heintzen, and is the proud mom of two GenYers.

For more information please visit www.upstartsrock.com

 
       
   
 
       
   
Many more articles in Creativity & Innovation in The CEO Refresher Archives
 
       
   
 
       
   
The CEO Refresher
 
       
   

Copyright 2009 by Donna Fenn. All rights reserved.

Current Issue - Archives - CEO Links - News - Conferences - Recommended Reading

Refresher Publications