STRATEGY #6 TO SURVIVE A DOWN ECONOMY
By Kevin M
If there’s ever been a time to adopt flexibility as a strategy, it’s now. The certainty we knew only a few short years ago is currently failing us, and our progress and even our survival may rest on our willingness to adapt to change and to new rules as much as anything else.
In 10 Ways To Survive a Down Economy (published on Christianpf.com June 1) we listed ten strategies to help you deal with the bad economy. Our topic for today, Strategy #6:
”Be flexible in your plans and ready to adapt to changing circumstances. If your job is eliminated, offer to contract or to work part time for the same company. If you develop multiple income streams, a shift to a part time arrangement may be to your advantage on a number of fronts. Be prepared to convert a negative development into an opportunity.”
Think “outside the box”
Often the first thought upon the loss of a job, or the prospect of it, is to replace it with a comparable one. But in many industries, a comparable position is either non-existent or too far into the future to be relied upon.
Instead of thinking “job”, think “opportunity”. In fact, think of it in the plural: ”I’m looking for opportunities.
You can miss a lot of income-paying situations by focusing too specifically on the search for a full time, benefited position paying something comparable to what you’ve made in the past, especially if your industry is in some stage of long term decline.
Job sharing, part time, contract work, a side business, a job without benefits and temporary positions, or a combination of two or more, all need to be on the list of possibilities. At a minimum, you can continue the search for the perfect replacement job while you’re working at something less.
This approach should be standard procedure if unemployment benefits have been exhausted, but also worth considering even if they haven’t. Working, even at below your past income level has a few things that an unemployment check can’t provide: a chance to make new contacts, learn new skills and—very important—to be out circulating in the business world. If you lose your job you will make mistakes finding your new way, but it’s important to be out there pursuing it, knowing it’ll take time to get it right.
Guard your time
In a down economy where jobs are at risk, there’s often a temptation or even a requirement to work harder and longer. But in many instances, working harder and longer isn’t earning you more money, or even keeping your income level.
It becomes crucial to earn an income commensurate the time an effort you’re putting into the job. Working a job that requires significant uncompensated time could be depriving you of time that could be spent working in capacities that might improve your cash flow or generate stronger future prospects.
Many times people who are looking for work find it in commission-only sales positions. Let me suggest however, that if income is the primary driver in the choice of careers, a commission situation is probably not what you’re looking for. You’ll have to make sales before receiving any income, and that’s an especially difficult feat to pull off in a weak economy. If sales veterans with experience, product knowledge and contacts aren’t having much luck, how successful do you think you can be as an upstart?
Be careful of common sales fields like real estate, insurance and car sales; people get into them because they’re easy entry fields, but relatively few have the talent or killer instinct to really make them work. The problem is that you can spend months of uncompensated time in commission only positions before realizing it isn’t going to work out, and by then your situation will probably be even worse.
Because there are fewer real job prospects in a recession, it becomes even more important to work in capacities where income is more certain and new skills, contacts or lines of business can be developed.
Guard your money
This means staying out of business deals that will tie up your money. In economic downturns, especially severe ones such the one we’re in now, people often take gambles they normally wouldn’t in an attempt to improve their circumstances. This might involve putting large amounts of money into investments or business deals that have less than certain outcomes.
While now might be an excellent time to start a new business, you probably want to avoid those that are capital intensive, requiring the purchase of an existing business, a large inventory or major equipment at significant cost.
It’s one thing to be optimistic and want to bet on your future, but betting real money is another matter. Businesses of all kinds are failing in this economy; if you’re unable to make a success of a venture you’ve poured most or all of your life savings into, insult will be added to injury if you can’t sell the business and recoup your investment.
In another direction (but same principle) there’s been a considerable amount of hype surrounding the purchase of real estate for investment purposes. Much of this thinking is based on the fact that property values have come down considerably from their recent peaks. But jumping into investment real estate when you have no prior experience is an exercise fraught with financial danger if the main motivaton is a play on lower prices.
Prices may be less than they were a couple of years ago, but unless you can buy a property for substantially less than it’s CURRENT depressed market value, it may not be a deal at all. Leave that business to the professionals who do full time. Making one bad deal early will put you out of that business before you even get out of the starting blocks.
Here’s a cosmic law that can save your life savings: when you absolutely, positively need a deal to pay off big, it won’t! Unfortunately, business deals don’t cooperate with our circumstances.
In this economy, capital is hard to replace and therefore it’s something that is best conserved. Bet on your skills and abilities, not your expertise at managing assets. Leave your retirement assets, your home equity and other savings for their original purposes, and if necessary, as a cushion for survival. Leave speculation to the professionals who know it well, and how to profit from it.
Mobility as a virtue
So far we’ve talked about being flexible in attitude and strategy, investing your time in income producing activities and preserving your capital, but all three pave the way to one overriding objective: mobility.
It’s important to realize recessions mean change more than anything else. Some businesses come up, some go down, old industries disappear, new ones arise, assets change hands, and so on. Some geographic regions will grow, others will decline.
The key is positioning yourself to take maximum advantage of that change. You can’t do that if you’re slavishly devoted to a declining industry, hoping to squeeze a couple more years of paychecks out of it, or if most or all of your money is tied up in a static investment or business venture.
This is a time of transition, and as much as we may want so much to dig our heals in and hold on to what we’ve known in the past, it’s often a losing strategy. Opportunity tends to come to those who are most open and prepared for its arrival, even if they aren’t entirely certain exactly how it will play out.
The future is waiting, so be flexible, travel light and be prepared to move as opportunity arises!