Many economic gurus are speaking the R word. . . recession. According to them, various economic indicators seem to show that a recession is on its way, if not here already. It’s been years since our last recession. For the most part, the economy has been strong and business has been good for many years. However, the fact is, that the global economy goes through cycles and even if we don’t see a full blown recession – business is slowing for many people. Unfortunately, every time it takes a downturn, the fallout is felt strongly by salespeople, business owners, and professionals alike. According to the AEA, over 50% of all businesses close down within two years of opening their doors. This number is known to increase dramatically during a recession.
Successful business professionals learn from the past. For many of us, this will not be our first recession. So, what did we learn from previous economic downturns? In the early 90’s, right in the middle of a nasty recession, I was at a business mixer in Connecticut where I was meeting many local business professionals. It seemed that everyone was feeling the crunch from the slow economy. Throughout the entire event, the favorite topic of discussion was how bad the economy was and how things were getting worse. The whole affair was depressing because nearly everyone was obsessed with the problems of the economy and its impact on their businesses.
I was introduced to one of the many real-estate agents attending. Given the decrease in property values in the state, I was leery of asking this gentleman the standard How’s business? question. I didn’t want to hear yet another variation of how bad business was. He shared with me, though, that he was having a great year. Naturally, I was surprised and asked, you did say you were in real estate, didn’t you?
We are in Connecticut… aren’t we?
Yes, he said with a slight grin.
And you’re having a good year? I asked.
I’m actually having my best year ever! he said.
Your best year! I said in amazement. After thinking for a moment I asked him, Is this your first year in real estate?
No, he replied with a laugh, I’ve been in real estate for almost ten years.
I asked him how he was doing so well, given the conditions of the economy and the stiff competition. He reached into his pocket and pulled out a blue and white badge:
Participate in the Recession!
That’s correct, he said. While most of my competitors are crying the blues about how bad business is, I’m out drumming up a ton of business networking with my contacts and generating referrals. Considering what he said, I looked around the room and listened in on people for a while as they were complaining about how bad business was. While nearly all were commiserating with one another, I concluded that very few were actually networking and working on seeking new business. As a result, very little business was actually being accomplished.
If you want to do well in business, you must understand that it does absolutely no good to complain to people about tough times. When you complain about how bad business is – half the people you tell don’t care and the other half are glad that you’re worse off than they are.
While you cannot control the economy or your competition, you can control your response to the economy. Referrals can keep your business alive and well during an economic downturn.
During the last recession, I watched thousands of business people grow and prosper. They were successful because they consciously made the decision to refuse to participate in the recession. The did so by developing their networking skills and learning how to build their business through word of mouth.
You can do the same during a slow economy by:
- Diversifying your networks. You need breadth and depth. Participate in different kinds of groups.
- Don’t be a cave-dweller. Be visible, put yourself in play, get out and meet people at business events.
- Learn how to work the meetings you attend. It’s not called net-sit, or net-eat, it’s called Net-WORK. Learn networking systems and techniques that apply to the different kinds of organizations you attend.
- Prepare effective introductions and presentations to give to other business people at networking events and meetings.
- Develop your Contact Spheres – these are a groups of business professionals who have a symbiotic or compatible, non-competitive relationship with you.
- Learn effective techniques to ask for referrals from your clients and people you know. For example, the who do you know who technique. . . Ask your referral sources, who do you know who needs ____________.
- Offer incentives for people to refer you (it may be as simple as recognition).
- Most importantly, understand that networking and building your business through word of mouth is more about farming than it is about hunting. It’s about building relationships with other business people.
Don’t let a bad economy be your excuse for failure. Instead, make it your opportunity to succeed. It’s not what you know, or who you know, it’s how well you know people that counts. In a tough economy, it’s your social capital that has value. Make good use of it and you will thrive while others struggle.
About the Author:
Called the Father of Modern Networking by CNN, Dr. Ivan Misner is a New York Times bestselling author. He is the Founder and Chairman of BNI (www.bni.com), the world’s largest business networking organization. His latest book, Masters of Sales, can be viewed at www.MastersBooks.com. Dr. Misner is also the Senior Partner for the Referral Institute, an international referral training company (www.referralinstitute.com). He can be reached at firstname.lastname@example.org.