Finding a Recession Proof Business
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Finding a business that can endure today's economic recession can be
tricky. People are tightening their belts more today than in the past
fifty years. We are seeing businesses close down, CEO's being replaced,
and some rather substantial cost-cutting measures, including salaries
and employment. So you have to ask yourself what companies are
thriving? Which ones are going to make it and which ones won't?
No, I am not an economist, but it has been my experience that whenever
belt's are tightened, people start to think of themselves first and
others second. In other words we start to focus on our basic human
needs and worry less about luxury items. Let's consider the effect the
recession is having in a few key human-centric areas:
Food: Eating out at restaurants is diminishing, particularly the high
priced establishments. In my area of Florida alone, over 35 restaurants
have closed their doors recently. Not surprising, people are more
inclined to cook at home, which means boom-times for value priced
items. For example, I understand sales of Hormel's SPAM product are way
up. With this in mind, I wonder when the Food Channel will replace some
of their gourmet shows with a show featuring something like, "Cooking
on a budget."
Health: Drugs are still doing fine, but people are more inclined to buy
generic as opposed to name brands. We will probably see a sharp decline
in cosmetic or elective surgery, but we will still need to replace
hips, hearts, knees, and other vital parts of our bodies. I have a
friend who manufactures titanium hips and knees. He tells me business
couldn't be better.
Transportation: As we all know, new car sales are way down which means
people are trying to extend the lives of their current vehicles. This
means companies selling auto parts should be prospering, as well as
independent mechanics offering competitive prices. The airlines will
always be viewed as a necessary evil but for any of them to succeed,
they have to streamline their operations.
Communications: I think cell phones will hold steady, but look for
people to change or eliminate their land lines. I have also seen a lot
of people cut down on the pay channels on television, as well as their
Housing: Like the automotive industry, sales have stagnated which means
people are trying to make do with what they have. And like the
automotive after-market, look for the sale of home improvement items to
increase, particularly those products designed to save energy and
money. This should be boom times for basic hardware stores.
Education: Private schools will be hurt by the recession as people will
be more inclined to send their kids to affordable public schools. This
includes state universities over private colleges.
In a nutshell, the companies that will succeed are those that address
the basic needs of the human being with no frills attached. Luxury
items, such as electronics will struggle in the meantime.
But success will also require companies to manage smarter than what
they have been doing. They have to think faster to seize opportunities,
be more organized and disciplined in their operations, and be more
adaptive to change. In other words I think you'll see a "no frills"
management style emerge as companies fight to survive. Those companies
with bloated bureaucracies and micromanagers will have to be cut down
to size in order to manage smarter.
So, what company is recession-proof? That which addresses basic human
needs and is managed so the company can turn on a dime without missing
Such is my Pet Peeve of the Week.
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About the Author
Tim Bryce is the Managing Director of M.
Bryce & Associates (MBA) of Palm Harbor, Florida and
has over 30 years of experience in the management consulting field. He
can be reached at email@example.com
Copyright © 2009 by Tim Bryce. All rights reserved.
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Article Published/Sorted/Amended on Scopulus 2009-04-10 23:31:46 in Business Articles