Dealing With a Downturn
Sure, it's scary that the bear is at the door and, suddenly, the bloom is off the 10-year boom we all prospered in...but let me tell you, you can tough it out through today's slowdown. And do note, I said "slowdown," not "recession," because as I write this, we have yet to suffer prolonged negative growth. Sadly, though, it already feels like a genuine recession for many of us.
Why? Contingent and freelance labor are typically the first to get their budgets slashed-and that's what many homebased entrepreneurs provide. We are bookkeepers, marketing consultants, graphics artists and, of course, freelance writers.
But buck up, because I've been doing this for 20-plus years, and in the three big slowdowns I've experienced, I've learned the following secrets of survival. In fact, I came out of the last recession, in the early 1990s, actually making much more money than I was before the recession hit.
Secret 1: Don't blame your clients when they cut back. It's not personal, so don't take it that way. It's tempting to angrily fire off a nasty e-mail, but restrain those edgy fingers. Why? Read on.
Secret 2: When panic sets in, companies often cut too deeply. You've seen the headlines about the many thousands of salaried workers who have recently lost jobs at leading companies. A curious fact is that often before the last of those fired workers clears out, the company already has to start reaching out to consultants, freelancers and free-agent workers to fill essential gaps. A related curious fact is that budgets for consultants will usually be created before new salaried positions will be opened up-mainly because the once-burnt business is twice shy about locking itself into payroll commitments. That means the heads-up consultants (especially those who obeyed Secret 1) will be brought back into the fold early on. Want to up that probability? Go to Secret 3.
Secret 3: Stay in touch with past customers even when there aren't current projects. Send a friendly e-mail once a month or so: "Hope you're doing well. I'm keeping reasonably busy but of course would always welcome hearing from you about possible projects." Do not beg, do not whine, and-above all-do not offer to drop your rates. Why? On to Secret 4.
Secret 4: Your fee rarely will make or break your relationships at this point. Either there is a consulting budget, or there isn't. And if there isn't, no matter how low you're willing to go, it won't put a dime's more work in your pocket.
Secret 5: In every downturn, there are always business sectors that benefit. Who will come out ahead in this one? I'm clueless, but I do know this: If you can figure out what sectors will prosper, you'll likewise prosper, because you'll tailor your offerings to suit those niches.
Secret 6: Love what you do. When this is the one and only job you want, it's easy to tough out the slow months. Just start marketing harder, and you'll emerge from today's challenging environment tougher, smarter and ready for the roll of good times that lies just ahead of us. Stay tuned!
Robert McGarvey is the author of How to Dotcom (Entrepreneur Press).