Is now a good time to be investing in Marketing Activity?
Some argue that an economic downturn is the ideal time to start a new business or to invest further in developing growth. Evidence illustrates this fact with the likes of Nike becoming market leaders in their sector through aggressive marketing activity during the 90’s recession and still remaining at the top of their game. This at a time when its competitors were slashing their budgets.
Yet this approach should only be taken if your activity is well thought out and the following factors are considered:
Increased Effort. Staying a float with smaller resources and income can be that much more difficult, so plan for worst case scenario in terms of break even and identify whether your time and capital can support this.
A solid concept.
If you’re going to start a business during a downturn, you should have a business concept that is well-suited for a downturn.
The right business model. Just as you need a concept that is well-suited for a downturn, your business model also needs to be viable in the current business environment.
The ability to execute.
Execution plays a huge role in the success or failure of any new business. When the economy is not so good, it usually takes a highly-savvy and/or experienced operator to execute the launch of a successful new business as markets are less forgiving and mistakes far more costly. The net effect is that your margin for error is much, much smaller.
Saving others money.
As individuals and businesses look to cut costs, products and services that provide a clear and compelling means to reduce expenses have the potential to gain traction.
Taking advantage of markets that have been over punished.
A recession may provide an opportunity to enter out-of-favour markets that are otherwise fundamentally strong but that have fallen victim to other factors that have made them particularly vulnerable to the current downturn.