Business is hurting across the globe. Supply chains have been disrupted. People are staying home. Many businesses that rely on traditional sources of revenue are not able to stay open. For solopreneurs, the pain can be even more acute.
Recessions traditionally impact small businesses disproportionately, as we saw in 2008, when they accounted for 45 percent of employment but 62 percent of jobs lost. And it’s even worse for businesses with under 10 employees or young businesses period. Solopreneurs almost always fall into one of these categories and often both. And this current downturn seems to be following a similar trend, with nearly 80 percent of small businesses negatively impacted. Fifty-four percent have dealt with slower sales. No matter your sector, you’re probably going to be dealing with fallout, but there is hope, and there are ways that solopreneurs can still thrive.
When a recession hits and money gets tight, many companies decide to cut back wherever they can. Marketing and advertising tend to get hit hard. But did you realize that you might actually be hurting yourself long-term by cutting back your spend?
As Moz founder Rand Fishkin notes, “Don’t use a sledgehammer, use a scalpel.” Businesses that lower ad spend during a recession tend to see sales fall 20 to 30 percent over the next two years.
Marketing and advertising are the low-hanging fruit if you’re going to tighten your belt, but do it with the mindset of pruning for new growth, not that of a drowning man clinging to a life preserver.
Some studies even suggest that a soft economy may be the best time for businesses to grow their market share. If you’re cutting back while your competitors are pushing ahead, you might lose out once the economy gets back on better footing.
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Solopreneurs with physical businesses are having a particularly hard time right now as everybody has to stay indoors, but some have been able to pivot by bringing their offering online — or as online as they can.
Kajabi’s “Let’s Build Together” campaign has been collecting stories from its users, and many of them deal with exactly this. For example, dog-training expert Connie Cleveland does 12 live events each year and hosts a two-day live workshop. That part of her business has completely collapsed, but after a recent event was cancelled, she reached out to everyone who had signed up and offered them a month of free membership for her online training business, The Obedience Road.
“I had a lot of people who took me up on that, which is great,” says Cleveland. “A month from now, they may drop off or they may not, but at least I got them into the membership site, where they’ll get to know me and what I offer.”
Restaurants that never offered carryout or online ordering are now doing full online rollouts. Physical trainers are doing seminars from their home gyms. The advantage of being a solopreneur is that you’re more nimble than most businesses. Take advantage of it.
You’ve probably heard of Warby Parker. The company that put direct-to-consumer eyeglasses on the map didn’t start in good economic times — it actually started during a recession.
Co-founder Dave Gilboa had to buy a new smartphone and a new pair of glasses around the same time and wondered why the glasses cost so much more than the phone. That thought coalesced into what became Warby Parker, and the rest is history, as they say.
Why did it succeed? The company provided a product people wanted at a cost below what anyone else could offer. No one to that point had been providing stylish eyeglasses for the price Warby Parker could. While money was tighter, this had a lot of appeal, and it proved resilient when the economy got back on track.
Companies like Coding Dojo, Stellari and Digital Ocean are pivoting to providing products and services that are required in present circumstances. Some fashion companies are repurposing material to create masks and other PPE, while other tech brands are providing support and free services for hard-hit businesses.
When money gets tight and customers are in short supply, you can build a loyal audience by providing real value and helping people. That’s true at any time, but doubly so now.
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Companies that throw themselves into helping their communities and genuinely aiding people will reap the benefits, whereas a tone-deaf or selfish response will turn them off. The most important thing is to focus on genuine, authentic help first. Be altruistic. The business benefits will follow. Even if it seems like you’re losing out in the short-term, you’ll build relationships, appreciation and customers that will last far beyond this moment.
That’s the biggest takeaway from this for solopreneurs: Find ways to stay in business, but make sure you’re providing a benefit that people can really use even while cooped up in their houses or dealing with sickness. This situation won’t last forever, but how you respond to it will resonate far into the future.