We have been hearing and talking about the rhetoric of the recession for months. And by “we”, I mean the collective us: business leaders, the media, economists and the world.
Regardless of whether there is will be be a recession or if we are already in a recession, the economy is showing signs of slowing down, or, as The Economist In other words, “reality has caught up with rhetoric”.
Yet many of those who predict a recession for 2023 do so lightly. In “Top 10 Trends for 2023” by Tom Standage he predicts that “most economies will go into recession…. but the US recession should be relatively mild. Morgan Stanley said the United States could completely bypass a recession. Even Goldman Sachs now sees a lower probability of recession than expected.
But when the news headlines blaze with Jeff Bezos’ warning consumers to spend less, saying “things are slowing down”, most of us sit back and take notice. After all, Bezos is on a mission to sell us…well…everything, including those big-screen TVs he just told us not to buy.
Here is the problem:
You don’t have time to wait for all the experts to agree and tell us we’re in a recession. By the time there is a consensus among the brains and billionaires of the world, it will be obvious.
The real question is, what can we do in the face of the uncertainty of it all – now?
The good news: whether we are already in a recession, whether or not there is a recession, or whether there is no recession, or whether there is a hard landing or a soft landing, for the sake of business planning you can always find your growth target for 2023, regardless of the economic climate. Here are four tips that will help boost your business planning for the year ahead:
1. Don’t let the news dictate your moves
Some of today’s most successful businesses started during a recession: Mailchimp, Uber, Airbnb, Slack, Warby Parker, Venmo and many more.
Nate Bailey, President and Founder of Ideation, a Portland, OR based distributor, began his career in the industry during a recession. Because of this moment, Nate received a gift: courage, tenacity, hunger, ingenuity and above all, reckless optimism. It worked. In 2022, Ideation was recognized as one of Inc.’s fastest growing companies. 5000. (Nate will join us on stage at skucon to Las Vegas for a fireside chat about his experience).
As headlines of layoffs, salary freezes, and hiring freezes creep into your feed, heed this edict: “Don’t let the news dictate your decisions.”
To skucamp in Brooklyn in September, three of the industry’s top vendors joined commonsku co-founder and CEO Catherine Graham on stage to discuss the current state of the industry and their perspective on the future. The panel included David Nicholson, vice president of PCNA; Dan Pantano, president and CEO of alphabroder Prime; and Jonathan Isaacson, Chairman and CEO of Gemline.
During the interview, Jonathan Isaacson said, “There will be industries that will continue to do extremely well even in a downturn…with every downturn there are industries that are doing extremely well and there are parts of businesses that are doing very well. During the Covid, who bought? HOUR. Who hasn’t bought so many? Sales and Marketing. So if you’re selling to a trucking company and they can’t find truckers, what do they do? They turn to us to solve a problem. So the people who are going to do well no matter what time comes are those who understand that we are not selling products, we are solving problems. And that’s true on the supplier side and it’s true on the distributor side: there are always opportunities there.
Treat news headlines as suggestions, not commands. Yes, Jeff Bezos may be the richest man in the world, but remember that when he speaks publicly on a major news network, he’s speaking to his first audience (and maybe to its only audience): its investors.
“There are always opportunities there.”
2. Focus on industries
To Jonathan’s point: Many industries will thrive during an economic downturn.
Forbes just posted an article this detailed the industries you should invest in during a possible recession. We can draw inspiration from this list of industries to target as customers to develop in 2023 or prospects to approach. The Forbes list included health care, consumer staples, utilities, discount retailers (like Walmart and Costco), alcohol, maintenance and repair services, accounting services and payroll and transport. Other experts cited industries like personal care or small indulgences like candy, beer, wine, and the pet industry. The Bureau of Labor Statistics reported that during the 2007-2009 recession, the four industries that performed well were healthcare, government, technology, and education.
This is incredible news for our industry, because according to PPAIthe top 10 industries that buy promotions are healthcare, business services, retail, finance, manufacturing, education, food and beverage, technology, nonprofits, and construction.
Compare the lists of those who thrive in a recession and the best promotion buyers by sector, and you get seven out of 10. In other words, we are already well positioned to work with most sectors that are doing well during difficult times. Recession or not, focusing on these industries is simply a solid strategy for planning your business for 2023.
Action step: Focus in 2023 on customers who work in industries that perform well during tough times, build a list of prospects from those same industries, and focus on solving problems.
3. Keep top talent and keep hiring top talent
The talent war will not stop. Job growth may be slowing, but talented people can now work from anywhere and are more motivated to work for companies whose values, culture and mission match their personal passion.
The idea of doing the same with mass layoffs is tempting, but Bloomberg’s Stephen Mihm suggested that all these “Mass layoffs in big tech are a mistake of the old guard” citing a study that spanned more than three decades and found that CEOs “who pursued a strategy of mass layoffs were far more likely to end up receiving their own pink slip for their failed efforts.”
Bains, the global management consulting firm, put it this way: “Think of a recession like a sharp curve on a racing circuit (which is the best place to pass competitors, but requires more skill than The best drivers apply the brakes just before the curve (they eliminate extra costs), they turn hard towards the top of the curve (identify the short list of projects that will form the next business model), and they accelerate hard out of of the curve (spending and hiring before the markets rebound).
In our skucamp interview, Jonathan Isaacson talked about it in terms of control: focusing on what we can control and what we can’t control and he focused on our most important asset, people:
“I’m really only worried about one thing because the only thing we can control is the quality of the people we hire. Everything else depends on the quality of the people in the organization… Our ability to win or lose will singularly depend on our ability to hire the right people into the organization. You screw this up, everything will go to hell. We succeed, we win. »
Action step: Review your team. Analyze your strengths and weaknesses. Review your compensation structures and compensation plans. Be open to the fact that top talent can be acquired more easily during tough times than tough times and most importantly, be ready to hire when others are hiding. Recession or not, recruiting, hiring and keeping top talent is a solid business strategy.
4. Growth Plan — Substantial Growth
You’ve probably heard of the Post vs. Kellogg quoted in a famous New Yorker article entitled “Hanging Tough”, quote: “When the Depression hit, no one knew what would happen to consumer demand. The Post Office did what was predictable: it cut spending and cut advertising. But Kellogg doubled its advertising budget, aggressively branched out into radio advertising and strongly pushed its new cereal, Rice Krispies.By 1933, even as the economy was collapsing, Kellogg’s profits had risen nearly thirty percent and he had become what he remains today: the dominant player in the industry.”
“Fortune smiles on the bold” is a mantra that our CEO often repeats. Numerous studies show that those who invest more in marketing and in their business, growing up during hard times for simple reason you become survivalist, pirate, challenger mark. To quote the New Yorker article again, “Recessions create more opportunity for challengers, not less. When everyone advertises… It’s hard to separate from the pack. The article highlights the difference between “sinking the boat” (wrecking the business by making a bad bet) or “missing the boat” (missing a great opportunity). Recessions can be a great opportunity to get ahead of the competition, perhaps leading the pack for years to come.
Action step: Invest, invest, invest. Invest in marketing. Invest in your staff. Invest in technology. Invest in the ongoing training of your team. Invest in yourself. When others are pumping the brakes, push and pass by.
Uncertainty is the new normal. Kiss him
As a global pandemic descended upon us in 2020, many of us thought it was the beginning of the end. But instead, you thrived. And our industry, the branded merchandising medium itself, has grown in importance to brands. We were all – suddenly and rightly so – driven to solve customer problems through the product. Our industry has matured during the toughest season of our lives. If there’s one lesson we’ve learned collectively, it’s that the one thing we know for sure is that uncertainty is our new normal.
We could be in a recession. Or there could still be a recession, next month, next year, next week.
But it doesn’t have to be your recession.
This article originally appeared on commonsku and was made available through a reciprocal content partnership with Promo Marketing. sku is the work-anywhere platform that powers your connected workflow, enabling you to process more orders and dramatically increase your sales. To learn more or to start your free trial now, visit commonsku.com.
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