Conceptual

Economic Conditions Impact on Historic Destinations

In a bad economy, saving is on everyone’s minds.  While much of the economy is down, the historic destinations industry increases.  In order to save money, families have stayed closer to home, visited historic attractions, gone to theme parks closer to home, and veered toward the outdoors utilizing national and state parks.

Visitors spend billions of dollars when visiting historic sites and therefore increase the business around those areas.  Historic destinations, for that fact, are proven economic generators.  It is important to know where consumers are spending their money because it typically counts for two-thirds of economic cash flow.

While the historic destinations industry is at a high in an economic downturn, economic forecasters expect consumers to resume traveling abroad.

Surviving the Recession

Though the recession means hard times for businesses and the economy, it does not mean everything will fail. Here are some simple tips to survive the recession.

First, it is important for a company to solidify its niche. Without a niche, the business is not as competitive. Too much diversification in product lines or strategies could be detrimental to the company, especially during harsh economic times.

Second, the company should seek out new market segments. Even if the market seems too small or too risky, any new business will be beneficial to the company.

Third, a company’s management must lead by example. Managers need to maintain motivation and show a personal commitment to the company so employees will as well. Managers should also act promptly to reward good performance and terminate those with poor performance.

In addition, managers should establish clear communication with employees to ensure that everyone understands the company’s goals. Some even recommend making the company’s financial information available to employees because it allows them to see the results of their action.

While there is no fool proof method to surviving a recession, sticking to your niche, seeking new markets and maintaining strong management is sure to keep your business on the right track.

David Ogilvy’s Best Business Advice

David Ogilvy, one of the most influential men in advertising history, is the pioneer of big-brand consumer-goods companies. He built his success on great consumer research and direct marketing skills. Ford, IBM and American Express are only a few of the Fortune 500 companies that he advertised for in the past.

Some of his best advice is listed below:

1. When Abraham Lincoln spoke of life, liberty and the pursuit of happiness, he left out the pursuit of profit.
2. Remember the old Scottish motto: “Be happy while you’re living, for you are a long time dead.”
3. If you have to reduce your company’s payroll, don’t fire your people until you have cut your compensation and the compensation of your big shots.
4. Define your corporate culture and your principles of management in writing. Don’t delegate this to a committee. Search all the parks in all your cities. You’ll find no statues of committees.
5. Stop cutting the quality of your products in search of bigger margins. The consumer always notices – and punishes you.
6. Never spend money on advertising that does not sell.
7. Bear in mind that the consumer is not a moron. She is your wife. Do not insult her intelligence.

Although most of his advice is stated in metaphorical terms, it is important to capture the essence of his messages. After all, he used this very advice to help him build an empire of success, Ogilvy & Mather.

How to Achieve Post-Recession Success Part 1

Everyone is tired of hearing about the current situation of the economy. But what if you could leverage the recession and use it to your advantage to help your business survive? There are people and companies that don’t even seem to be affected by the recession and are actually thriving. Here are some strategies to help you leverage the recession and come out on top:

1. Refuse to participate in the recession. The biggest thing you can do to hurt your business is fear. There is no need to fear the recession. If you keep a positive attitude and put in the extra work, it will pay off in the end.
2. Stick to your plans and focus on execution. Always be proactive when pursuing what you want. If you try to deal with life as it comes at you, you will never get what you want and you will never be in control of your future. Instead, be prepared and focus on what you want and how you are going to achieve it. Then, go for it at full force.
3. Sell value instead of cutting prices and quality. Don’t compete with other businesses that are cutting costs and corners to survive. This is an amateur tactic used by businesses to beat out the competition, but will never yield the most valuable option out there. People value quality and are more willing to pay more for a better product. So don’t cut costs, figure out how to sell a more valuable product at the same price.
4. Don’t feed into the negativity. Sell your customers on a solution that won’t make them think about the recession. If you don’t feed into the negativity, you are less likely to be affected by it.

By making each of these strategies a cornerstone to your business strategy, you will come out of the recession successfully. There are plenty of people and companies that are successful during times like now with the kind of attitude you need to mimic. Then, you’ll find yourself thriving in this environment.

For more information, check out: “Marketing Strategies to Leverage the Recession” by Rob Sinclair.

How to Achieve Post-Recession Success – Part 2

Thousands upon thousands of businesses across the country have declared bankruptcy since the recession began more than a year ago. Others that have remained are thriving by picking up the increased market share from fallen competitors. But others succeed by sticking to one important principle: customer service.

According to an article by Kathy Lohr on npr.com, “U.S. bankruptcy court records show more than 43,000 businesses filed for bankruptcy last year, but that doesn’t even include individuals who file for personal bankruptcies to get rid of their business liabilities. Part of the reason may be the amount of debt companies were carrying.”

But business professor Charlie Goetz from Emory University thinks that there are other reasons businesses survive and even thrive during a recession.

“When times are good, it’s amazing how many companies really don’t pay attention to their customers,” he says. “Customers are a dime a dozen so they don’t even worry about them.”

Goetz also points out when the times start to get bad, the companies don’t have anyone to fall back on. Therefore, the recession has weeded out the weaker companies, and many economists say it may be a good time to start a new business.

Barton McMillan is a custom home builder and remodeler in Atlanta, Ga., who has been in the business for 20 years. McMillan was lucky and didn’t have much debt when the housing market collapsed. He has worked to build strong working relationships with his suppliers, and even other contractors know him personally.

Since people are mostly remodeling right now, he works on a few large jobs. He takes the time to stop by his projects at least once a day to make sure they are on track, and the customers have taken noticed.

While the recession has caused even the consumer to cut back, it is not the time for businesses to cut back on the quality of service they provide. Take the time to really focus on the customers you do have and strengthen the relationship with them and your suppliers.

Read the following article for more information: “Recession Survivors Capture Competitors’ Business” by Kathy Lohr.

A Strategic Approach to the Recession

Focus, focus, focus! If you’re a business owner in the midst of this recession, then this word needs to be on your mind at all times. You need to focus on long-term benefits for your company rather than the short-term benefits. Focusing on aspects of the business that are only going to bring in short-term profits is not of essence right now.

Open innovation is not only a tactic that is going to help your business succeed in the recession, but it will also give you a great advantage over your competition. “By breaking down traditional boundaries, open innovation allows intellectual properties, ideas, and people to flow freely both into and out of an organization.” Inside-out open innovation refers to saving your business time and money by allocating projects or assets outside the walls of your business. This tactic could also help you formulate new supplier and partner relationships. It could also help you promote “innovative ecosystems” and generate “high-margin licensing incomes.”

If your business lacks in a certain area, such as telecommunications technologies for example, it would be easier to hire another company to do that work for you rather than getting your own people to do it. That way, the end-product will wind up costing less and looking better than it would have if your own employees had worked on it. You also get to share the success despite having a small part in the production process. It should also reduce your business’s costs and risks.

Recessions are dull times and lots of businesses end up halting promising projects due to the fear of what the recession might do to the business. However, this is not the case when it comes to inside-out innovation. Inside-out open innovation allows for greater flexibility during rough times. Most companies never pursue a project as if they themselves were the customers or suppliers and that’s where they go wrong. By doing this, they could allocate projects they don’t know how to execute to companies that are more experienced and get to share all the returns in the end.

In conclusion, if you find that your business is struggling right now then try to outsource your projects to other businesses that specialize in areas your business is lacking in. This should relieve some of the pressure and allow you to make profits as a result of collaborative efforts.

(Harvard Business Review Publishing. Web Exclusive: Use Open Innovation to cope in a Downturn by Henry W. Chesbrough and Andrew R. Garman. June 2009.)

Cut Costs in a Recession

Need to cut costs during the recession? It might be helpful to monitor your cash flows. Here are a few things to keep in mind:

Monitoring your cash flow is a vital component to remember when running a business.  Without budgeting there is no doubt that your business will quickly disappear.

Pay attention to who your customers are.  Learn about them fully in the beginning. Determine payment terms and make sure they are understood from both sides.

Remember to raise an invoice on your goods to ensure you will be paid. Also, pay other companies on time for their services because chances are they are as tight on money as you are.

Finally, keep track of customers paying credit.  You should create a routine to check up on such transactions.  If they have not paid, try to contact them through phone, letters, and email.

Cut Costs in a Recession Part 2

Another way to cut costs during a recession is to monitor the amount of electricity your business uses.

Turn off lights in rooms when they are not being used.  Also try buying the energy efficient light bulbs for your company, preferably ones that have a warranty and a long shelf life.

Turn off and unplug all equipment for nights, weekends, and holidays.

Keep heating and air at a decent level that is sustainable but not over the top.  If the air system is on, remember to keep windows and doors closed and at best blinds as well.  This keeps sun from penetrating a room and heating it up even more, counteracting the air conditioning.

If it is nice outside, you can turn off the air and open the windows.  If employees are stuck inside all day, this task cuts costs and relieves the stress of employees.  It will be useful to turn air off during times when the company is not operating.

Remember when cutting down on energy, it is vital to have management on your side and make sure they are implementing cost efficient techniques.  Also, make the employees part of your team and have them act on your new program. Remind them every so often that you are serious about saving energy in every way.

Keep communication open among employees and allow a channel for new ideas and changes in your company.  This will ensure a longer lasting and more affordable way of running  your business.

Cut Costs in a Recession Part 3

Here are a few more ways to cut costs:

Before choosing or renewing your energy supplier, review other companies and choose the one that is most affordable for your type of business.  Also, by researching different insurance companies, you will find one that has benefits designed specifically for your company.

Look for grants and small business rate relief that the government offers.  The government is willing to help, you just have to do some research.  If you are renting your property, try to negotiate on a lower rate or a discount if you pay ahead of time.

Reduce waste at all costs.  Try to decrease paper consumption and paper waste, monitor ink and try to change settings to efficiently use ink, and look for ways to reduce other company necessities you have.

Other ways of cutting costs is to monitor costs of transportation and insurance, postage costs by using only 2nd class mail, and telephone costs by choosing again the best company for your needs.  Also have good legal advice on your side to guard your business.

Finally, monitor the levels of employment.  If it looks like you could have less employees or it appears as if there are some that are not pulling their weight, it is time to let them go.  Sometimes this can be hard, but it is necessary and you are running the business.

While running your business don’t forget to treat your staff with the upmost respect and in turn you will earn theirs.

There are many ways to cut costs resulting benefits, but the hard part is implementing them.

Recession Proof Businesses

Recessions are hard on everyone, but people and businesses that take advantage of new opportunities can succeed despite rough economic times.

According to Ariel Tung of the Herald-Times in Indiana, “Businesses that do well in a recession are those who benefit from changes in consumers’ spending habits.”

Succeeding in a recession focuses on positive and negative energy. If businesses look at situations positively, levels of  stress within a population can be reduced and their willingness to make beneficial decisions increase. However, when businesses focus on the negative aspects of a situation, they become less productive. In other words, a positive attitude leads to positive outcomes, and a negative attitude leads to negative outcomes. Have you ever had a day when you’re in a really bad mood, and everything just seems to be going wrong? Then on days when you’re in a really good mood, everything seems to be going right? If you’ve experienced this, then you understand the workings of positive and negative energy.

One example of a business thriving during the recession is Sturgis Garage & Wrecker Service in Bloomington, Ind. Many people are trying to maintain their old cars, instead of buying new ones, so the auto repair business has experienced a sudden surge of customers. Customers continue to visit Sturgis Garage & Wrecker Service to get their cars’ transmissions and engines fixed. Meanwhile, the positive mood of the employees and their willingness to work hard to please customers has brought in even more business for the company.

Other businesses that are doing well right now include used and low-priced furniture stores. Let’s face it, people are looking for bargains, so businesses that specialize in bargain items are benefiting.

One example is Furniture Exchange in Indiana. The store stocks used furniture, but the real reason it is doing well is its low-priced new furniture. Therefore, the furniture store is not only making customers happy, but also pleasing business owners that sell new furniture. Furniture Exchange has reinvented itself to appeal to customers, so it has succeeded in increasing its business during the recession.

Another bargain-based business is Plato’s Closet, which sells cloths that are lightly used for 50 to 70 percent less than their original price. Some Plato’s Closet stores have seen their sales increase between 10 and 18 percent this year. Businesses that sell DIY (Do It Yourself) materials are also very prosperous right now, since people would rather make things on their own than pay someone to do it for them.

Business strives to constantly put itself in the consumers’ shoes, if a business can’t do this then it’s bound to fail. A smart business is a business that listens to its customers and accommodates their needs. Right now, people are experiencing major financial issues, so businesses that specialize in high-end products will struggle to continuously gain profits unless they gear their efforts to the consumer.

Click here for more information.

Making the Most Out of the Recession

Businesses may not realize it, but there are numerous opportunities to take advantages of during a recession. Patience is key to develop and implement beneficial  strategies. “Tough times force entrepreneurs to work on business models earlier, and reach profitability faster,” said Jan Brassem of Brassem Global Consulting.

Everything gets marked down in a recession to help people and businesses cope. Some of these things include the cost of labor, materials and office space. Materials tend to be very costly these days, so getting them at an affordable price should motivate businesses to start using the recession to their advantage.

 

According to Brassem and his business colleagues at Harvard University, the University of Hartford and New York University, there are many ways to restructure a business’s strategy during a recession. Here are some of their suggestions:

1) Try your best to survive the recession. Cultivate relationships, look for new customers, investigate new channels and deepen the relationship with your bank.

2) Create an “analytic initiative.” Always trust your instincts and never let people deter you from what you know will work. You should have one executive that handles all data collection analysis, base buying and strategic decisions on that data.

3) Prepare for major changes and fluctuation within the industry.

4) Link your business to social networking sites such as Facebook, Twitter and YouTube. This should invite new customers to start taking interest in your business. It might also bring you new product ideas.

5) Announce new promotions, if you have any.

6) Start discarding all products and items you don’t need. Have a promotion on them and sell them for cheap. This should bring in new customers.

7) Spend time with the people you work with (clients, customers and vendors.)

Avoid making any rash decisions.

9) Invest in technology.

10) Pursue mergers and acquisitions.

11) Rethink your financial model.

12) Communication is essential in every business. It’s important that everyone involved knows what’s going on so that everyone is on the right track.

13) The leader must always stand out. A good business must always be led and people who work for you must always know what their roles are. If there is no leader, everything will collapse.

14) Try new things and reinvent different aspect of your business cheaply. There is no need to overspend on anything unless you’re certain it’s going to work. However, nothing is ever certain in a recession and you should avoid costly experiments as much as possible.

15) Recessions are a great time to steal the market share from competitors. While they’re busy trying to cut costs and handle the repercussions of the recession, you could be taking over the market.

16) Never leave yourself without a plan. The worst thing to do is approach the recession unprepared. Always think ahead and make the best of what you have.

17) Decisions have to made but always make sure you make the right ones. If you think someone needs to be fired then do it. Prolonging the decision is only going to make your business suffer.

As you can see, there are many useful strategies to help your business succeed during a recession. You must be willing to have an open mind and a positive attitude if you want your business to thrive. Research helps guide you during uncertain times, but you also need a good team of people backing you to make these things happen. They can be done, but you just have to take it one day at a time.

(This article is based on the article, “Seize the downturn and grow your business” by Jan Brassem, National Jeweler, 00279544, May 2009, Vol. 103. Issue 5. Taken from the database Business Source Premier.)

Ogilvy’s Team of Experts Offer Solutions for the Recession

Despite the recession, there are plenty of opportunities to leverage during these hard times. According to Marc Fleishhacker, MD of David Ogilvy’s North American consulting business, some of these opportunities include having far more powerful measurement tools along with analytics and digital solutions that enable businesses to deliver quick results with greater efficiency than the approaches available in previous recessions. Fleishhacker also encourages businesses to build brands and capture market share during the recession.

 

Ogilvy North America is launching a Recession Marketing Practice to help clients leverage from the recession. The team consists of more than 100 professionals (Ogilvy’s top experts) who specialize in marketing strategy, analytics, measurement, email, technology and media.

The 21 Ogilvy Solutions are customizable based on client needs and offer strategies that focus on extracting more value from customer databases, further leveraging social media and free media, email and mobile optimization, re-engineering loyalty programs and effective channel planning.

Ogilvyonrecession.com provides a series of downloadable ‘Ogilvy Perspectives’ that draws on the experiences of these professionals across all marketing disciplines. These perspectives were designed to help clients prosper during these hard times.

Visit this site and download these ‘perspectives’ to get some helpful tips for your business. It may help your business override the recession while helping it succeed at the same time.

For more information about Oglivy and the recession, check out this article.

A Bright Outlook for the Lodging Industry

During a recession, many companies suffer and even go out of business.  The good news is that recessions don’t last forever and some companies pull out of it faster than others.  The lodging industry has been hit hard causing consumers to think smarter about how they spend their money.

The lodging industry typically gains momentum when coming out of a recession.  During 2001, 2002, and 2003 deals were falling through and lodging was decreasing.  Since then, sellers, buyers and lenders are all working together to bring the industry back to normal sales.

For example in 2004, there were 11 major deals that occurred in the recession.  The industry foresees this as a continual trend.  One thing lodging facilities have been doing to save is trading assets instead of building new ones.  Even though new buildings are constructed, there are not quite as many and it is not a major focus of the industry at this time.

Also, since many of the hotels are being turned into apartments, there is less competition among companies.  In the last couple years, occupancy for rooms has reached an all time high.  Places that are expected to have the larger turnaround when coming out of a recession include: San Francisco, Boston, Hawaii, Miami, Chicago, Washington, New York, and Los Angeles.

Wisdom in a Downturn Part 1

Don’t Cut Discretionary Funds but Excess Slack

 

During a recession, many executives instinctively cut discretionary spending across the company. Discretionary spending is a long-term strategy in which there is investment on the client’s behalf into the company.

Cutting discretionary spending can be risky. It not only decreases chances for the future profit, but since recessions normally last a couple years this action may not be beneficial to the current situation of a company.

Based on these reasons, companies are looking for better methods to cutting costs. One solution is for companies to weed out the operational slack and inefficiency, which in turn, builds a competitive edge for the future.

 

When faced in short term economic hardships, managers defer or transfer funds from their strategic initiatives to achieve near term financial targets. This is why many organizations have so much trouble sustaining their strategy execution processes. To help companies preserve and strengthen their strategic programs, companies use strategic expenditures (StratEx). The StratEx category helps companies continue to build capabilities for the future while eliminating the unnecessary weight for the company.

Wisdom in a Downturn Part 2

Decrease Stress In Employees

During economic hard times, companies tend to put employees hard at work to increase productivity. This can cause tension among the workforce. Instead, companies should try to be open with employees about problems the company is facing. This will in turn decrease time wasted, reduce stress, build resilience, boost trust, and improve productivity amongst the company. This openness will also encourage employees to empathize, be more conscious, and work harder.

Wisdom in a Downturn Part 3

Focus on the Employees

A recession is the perfect time for a company to focus on employees.  This may not seem important to employers, but it is vital to success when the economy improves.

Many managers will want to focus on how to increase sales, decrease costs, and avoid spending money on training existing employees. However, while business is slow, companies should focus on relationships among customer and employees. Training should include team building skills, collaboration, and process ownership along with other things. This provides one way of seizing a downturn and improving conditions within a company.

Wisdom in a Downturn Part 4

Get Inspired from Everyone

During an economy, leaders in a business should ask great questions to challenge the company and set competitive goals.  Another economic tip for companies is to build trust across the organization.  To build this trust, hold weekly meeting with managers or employees to let them know what is new and things to improve. This will also build close relationships and a chance for employees to exchange ideas.

Encourage brainstorming and training and experimentation among the company. A recession is time to inspire people to be innovative.

The Ignored People

America is a collective nation of immigrants from around the world.  It hasn’t been until just recently that many Americans stopped being closed-minded to the rapidly increasing Hispanic industry.

Businesses are missing the opportunity to cater to this ignored industry because they have negative feelings towards other races. Businesses do not realize the amount of money that they could be capitalizing on from them. If they took the time to tweak their programs and have an open mind it would make a world of a difference.

 

Examples of how some companies have recognized the opportunities are: banks and credit unions making low cost transfers, cell phone companies allowing affordable calls across the nation and to native countries, and websites connecting immigrant groups around the world with Spanish language programs and movies.

5 Ways to Recession Proof Your Business

Need some ideas for surviving the recession? Check these out:

Re-brand Yourself-

This may seem hard to do during normal times of the economy, but when business is slow it is the perfect opportunity to focus on the image of your business and bring in new customers. Simply by adopting a new name or changing a logo, a business has changed its image.

Offer New Services

By offering new services, your business will stand apart from the competition.  With so many similar products and companies it is difficult to choose which is best. Therefore, people decide to buy the most affordable products, or products that are multi-purpose. Offering new services will create buzz in the marketplace and increase revenue prospects.

Branch Into Related Activities

If your business offers services at a higher price, it will slow down during a recession.  One way to increase sales is to think of new ways to sell your services.  It all centers on the idea of innovation during a recession.

Say you are a company that offers financial planning. Many people cannot afford that service at this time. So, instead of losing business, you create a class workshop.  If everyone pays a fee for the class to learn how to plan on their own, you will gain revenue and potential customers in the future when the recession is over.

Partner With Other Companies

During a time when business is slow, it is a good idea to expand your practice.  Partner up with another company as a way of expanding your company and gaining more clients.  Teaming up with another company will offer insight into your operations and provide new techniques and minds to find ways to be on top of the recession.

Another way to partner up with others could be as easy as moving into the same office space.  It will cut costs in half for both businesses. In this way, you can share space, staff and technology.

Implement or Increase Your networking and Publicity Activities

If you don’t have a professional network, now is the time to start building one.  Try to have a diverse range of professions in your network and not just people in your specific business.  Keep in touch with people in your network.  Then, when someone in your network knows someone who needs help with something in your field, they may refer that person to you.