Business First of Louisville: Starting a Business : Business Advice

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In order to understand why a down market create so many opportunities for astartup company, you first need to understanr why a bull markeg makes it so difficult to succeed. In a bull the cost of everything As more capitalbecomes available, so does more competition. New startupsx spring up everywhere, competing for talent, marketing opportunities and At one time you were the only game intown - now you'vde got three guys pretending to do exactly what you do - all the whilwe increasing the cost of runninfg your business. Conversely, a bear market drivea the cost ofeverything downward.
Companiees go into a panic, losing sight of theirr growth goals and in some casez falling intobankruptcy altogether. The sudden drop in demanc forces the prices of everythingsharply downward, creatinbg a perfect storm for a well-prepareed company to create unprecedented gains. Before you get your offens e together, you need to get your defense linexd up and that means gettingy very leanvery quickly. The problem with coming off of a bull markey isthat we're not used to pullinb back. We're used to knowinbg that the next year will be even biggerr thanthe last, so we plan and spends accordingly. This time around, we've got to creates a very different plan.
This plan is about reducing marketing and all possible operating costs you have befored circumstances force such movesupon you. Make no mistake, this is goinf to suck. Nobody is ever excited about especially after agood run, but it's betted than sending the entire company home because you weren't ready to make changes. A healthy approach is to plan for a very long Assume you'll lose more sales than you can possibly Think of your business in terme of what it is your company can operate on and still keep the lights on. You can alwaysa add more resources if you need them butyou won't be able to make up for overshootintg your income forecasts.
Kickinyg butt in a down market isn'tg just about crawling up in a hole and waitintgfor spring. It's about gettinh lean so you can get focusedc onhunting again. Your competition may not reactt as quickly asyou did, which is greart news for you. Chances are their lack of planning is puttingb the company in atightf spot. Their senior management is more concernefd about making payroll than making Their foot soldiers are more worried abouyt whether or not they are goinvg to have jobs than whetheer their customers are as happy as theycan be. And that'sz where you swoop right in.
Therer is never a more cost effective time to attaci the competition and take over theit customers than in a down The cost of advertisintg plummets as the competitionpulls back. The challengse of getting media attention dwindles as fewer companiess are vyingfor attention. And the cost of wooingb customers drops as sales representativex go into adefensive tailspin. In some cases you may not even have to attackitheir customers. As your competition pullw back or goes outof business, you can let thei r customers come to you.
Try that in a bull