“Always have at least three businesses because there will never be a time when one of them isn’t doing badly.”

Was he right on that!  Particularly in the midst of a recession.

But even if you don’t have three entirely separate businesses, it is still possible to adjust your product mix so you have three or more entirely different offerings targeting different needs, possibly even from the same consumer. Look carefully at your business and learn to pivot.  I have.

I was reading recently that for a number of years Target, even though much smaller, had been beating the brains out of Walmart, in terms of growth.  Retail experts attributed this to it’s trendier clothes and name designers.  Then, lo and behold, the recession hit and the trend flipped.  Walmart is now beating the brains out of Target and the gurus tell us it all has to do with groceries.  Yep, mundane old cereal and peanut butter.

Because now vendors need to be selling more of what people need not what they want. As this article put it, why buy a new shirt when you can just reach in the closet and get one.  On the other hand you need to eat.  So you need to buy groceries and Walmart has more of them, although Target is scrambling to catch up.

Which brings up to the Web.  And to other businesses as well.  I was also reading about an entrepreneur who was burning through cash and man hours and scrimping to develop a new, hopefully game changing, software product.  When the recession hit, he put that on hold to offer a web design and development service.  Cash now for something businesses need to have not want to have.

The lesson here is that there is, no doubt, some way you can think through your offerings and, for the moment, move away from the big ideas and toward the practical, the everyday needs, the things you can execute efficiently in a shorter time frame for a customer.

Seth Godin wrote about this on on March 13, 2009

Pivots for change

As I’ve mentioned, I’m launching a site or two on “green biz”, so I’m trying to keep up with what’s out there.  In 12 Green Consumer Trends Mean Business Opportunity for Eco-Entrepreneurs,  Scott tells us:

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According to Senator Ted Kennedy:  “Women’s wages fell six times the rate of men’s wages last year. And despite their better overall credit scores, women are over 30 percent more likely to have expensive subprime loans, and are therefore much more likely to face foreclosure. Not surprisingly, many women are falling into bankruptcy at alarming rates. Single women, including those with children, account for 40 percent of all bankruptcies….. Women, who earn 77 cents on the dollar for men….have lower savings, fewer assets, and smaller pensions. Unmarried women in the United States have, on average, less than half the net worth of unmarried men.”

But,  if the thought is that keeping women in financial serfdom will be best for all concerned and the good old boys really know how to run things, think again.

“Finance has always been dominated by men and driven by a testosterone-enhanced culture. If women had been running our banks, might we have avoided the sub-prime mess and the resulting economic meltdown?”  Sylvia Ann Hewlett, an economist and the founding president of the Center for Work-Life Policy points to research in an article, Too Much Testosterone on Wall Street- HarvardBusiness.org, which seems to indicate the answer is yes.  More women at the top provides more stability in organizations. This, despite the fact that research also indicates women face a “Glass Cliff”;  they are frequently given top positions at a time when a company is in peril and on a downhill slide so that, if things don’t miraculously work out for the best, the woman can take the fall.

And that dynamic carries all the way down the chain of command to the bottom.  The first to get canned are women. Sylvia Ann Hewlett said of  her own career: “My first female boss warned me, ‘When the going gets tough, women lose out.’  The top brass, who are looking at the lists of which positions to eliminate and whom to fire are mostly men.  People like to hire and retain in their own image. Men certainly do.  And they are playing golf, taking expense account lunches and knocking back a Scotch or two with other men. The top brass in a corporation are usually not networking with women.  They are not personally invested in them.  And they are not going to stand up for them when the discussion around the table turns to whom to fire.

When women do get the ax, according to Kennedy, the unemployment insurance system is weighted against them. “Because of outdated eligibility requirements, only one-third of unemployed women receive benefits, although almost all workers pay into the system.”

Because only about 16% of legislators are women,  we don’t get a fair shot at writing the rules which could protect us. So we bear the brunt of the consequences in this economic meltdown.

Nina Easton writes in Fortune of Obama’s economic team trying to write and pass legislation designed to slow down the economy’s slide and turn things around.  It remains to be seen how much real help is there for women.  At one point,  Easton compares the frenetic atmosphere to the movie “Speed” in which  Sandra Bullock is trying to control a runaway busload of passengers before the bomb goes off.

Well , at least we’re glad Sandra Bullock was at the wheel instead of a super daredevil co-star.

And despite the presence and influence of Larry Summers of “women are genetically inferior in math and science”  fame, it could bode well that Christina Romer has been named chair of the Council of Economic Advisors.

And that could be a bit of a silver lining in this imploding economy.

The idea that we need more women in top jobs in finance is gaining traction. “The current crisis gives us the opportunity to insert gender into the re-writing of the rules” says Nadereh Chamlou, a senior adviser at the World Bank. “We need more women at the table.”

Amen to that.  A place at the table and a voice in the room.  That would be a start.

Smart job strategies to avoid layoffs offers some suggestions and I’ve added some of my own thoughts in italics.

Strategy: Make sure higher-ups know you by solving problems and taking on high-profile projects.

Well this is an evergreen.  Don’t wait until a recession to practice this.  It should be your every day mantra.

Strategy: Share client leads or ideas to generate revenue even if that’s not part of your responsibilities.

No kidding, Watashi.  No one fires a money maker.

Strategy: Hang out with the people the boss respects most. The halo of their good reputation may extend to you.

Not too sure I’d waste my time hanging out with anyone when there’s work to be done.  But then I’m a recovering…but not much…workaholic.  And I’m not sure anyone fires a workaholic either, since they’re usually doing the work of 3 people.

Strategy. Keep on top of advances in your field and expand your expertise beyond your core area.

Another evergreen.  Don’t wait for a recession to do this.  Do it day in and day out, rain or shine.

Strategy. Look for problem spots that you can help fix. And pitch in whenever extra hands are needed.

No kidding.  Who wrote some of these?  The office slow poke?  ( No offense meant.  I know they gave some good examples which is worth a lot I guess.)

Strategy. Volunteering to take a pay cut during an industrywide downturn can make you look like a hero.

I am really not too sure of this one.  I’m not sure anyone should step up and devalue themselves.  If you’re the CEO or one of the top management of a company by all means, step up to the plate and ask for a pay cut.  You’re the responsible party.  But, for employees below that level, I think the better advice is to keep your salary the same and offer to take on more work.

These are my thoughts.  But if you want to compare them in detail, go to Smart job strategies to avoid layoffs and read the whole piece…lots of examples.

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I want to share with you one bit of insight I picked up from one of the last stories I will probably ever read in Vanity Fair magazine. I say this not because I don’t like Vanity Fair……I love Vanity Fair….. but I will not  be renewing my subscription, partly due to what I’ve learned there and partly due to the economic horror stories I see going on all around me.  I see the handwriting on the wall and know, beyond certainty, now is the time to cut back.  I hope we all are able to do that, one subscription at a time, one Starbucks coffee at a time.  Or however one has to do it. So you might say Vanity Fair itself, and particularly its article Profiles in Panic, is responsible for losing one of their subscribers…..or scaring some commonsense into one of their subscribers, before it’s too late.

Ok. Here’s what really caught my attention…. aside from the one page color graphic of a bear, as huge as King Kong, dangling a Wall street exec off the Empire State Building:  this time the big boys were going down, too:

Summer Redstone, Chairman of Viacom and CBS had to sell $233 million of stock in those two companies to pay down part of an $800 million loan. Chesapeake Energy’s Aubrey McClendon, was forced by a margin call to sell 94 percent of this 32 million company shares into the bear market; worth $2.2 billion last July, sold in October for $569 million.  And Kirk Kerkorian, 91, lost about $12 billion on his 54 per cent ownership stake in MGM Mirage which owns about half the hotel rooms on  the Las Vegas Strip, including those in the Bellagio, MGM Grand, the Mirage and Mandalay Bay. The company’s stock is down 86 per cent this year and it’s bonds are deep into junk status.  Ouch!

Ok.  Those guys are billionaires.  You and I probably don’t have to worry about losing as much as they did. But it’s the dynamic beneath that which worries me and has affected even the mid-level Wall Street executives. In many cases, half of what they earn is in stock.  So they have a big net worth on paper.  Let’s just take one example from Profiles in Panic: Feature an executive who has worked at Lehman, has accumulated stock, some of it discounted at purchase, then the stock has accumulated value over time. “Let’s say a guy in that position borrowed $5 million against $30 million in stock.  It would seem a very conservative loan, right? Until the $30 million goe down to zero, which is what happened.  So now he’s negative $5 million.”  That’s $5million in the hole, in the red. And no way to make it up.  Oops.

Well, perhaps these numbers are too large to connect with, unless you subtract a few zeros.  Last night driving to Costco, telling my partner we had to cut our usual Costco spending spree in half, we were listening to NPR which was explaining the collapse of real estate values in Las Vegas.  One man, a realtor himself, I think, had bought a house last year for $350,000.  He had to stand in a long line to get a chance to make an offer on it. Now he had just had it appraised.  The new number was $150,000.  So, if he owed more than that on it, he was “under water” as they say, conjuring up images of holding one’s breath, trying not to drown, with the weight of a $150,000 house on your back.

So, the lesson to be learned is “Look brother, or sister, there but for the grace of God, go you….. and me.” If you have any big weights on your back….. extravagances, credit card debt, business costs… that you can get rid of or trim, now is the time to do it.  Somewhere, perhaps in this article, a pundit said, roughly, every 30 years or so society needs a shake up to readjust it’s values and how it spends its money.

While at Costco, we saw a junior size, motorized Cadillac convertible for youngsters who had parents willing to fork over $277.  Time to readjust.  Don’t let that be you.  At the risk of being a bit retro, tell your kids to put aside their Wiis for a bit and get on their computers to read Horatio Alger rags to riches stories, illustrating how down-and-out boys ( and now girls)  might be able to achieve the American Dream of wealth and success through hard work and determination. No mention there of Manolo Blahnik $700 shoes or little over-priced faux Cadillacs for the kiddos.

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Of course, we all realize by now that we’re in a recession.   We really didn’t need CNN to report that the recession started a year ago, but it does help to crystalize our thinking.  If you’re like most of us, whatever industry we’re in, we’re seeing revenue go down as people spend less money, and bills being paid more slowly as customers either hold on to their cash, or juggle it around, trying to make it stretch to cover their own bills.  Not a pretty picture.  And the truth is, it will get worse.

I myself have several revenue streams because my father, who I’ve already mentioned, was an extremely successful entrepreneur, told me to always have at least three businesses (which we would now call revenue streams) because there was never a time one of them wouldn’t be doing badly.  I remember someone else saying: “What you lose on oranges, you make up on apples.”  But what if both orange and apples are in the tank?

That’s the time to look for a market in pears.  Or pecans.  Or speaking about apples or how to grow apples.  Or turning apples into apple butter or dry them for apple snacks. Or put them in a basket with wine and cheese and selling them that way.  Or at a local farmers market.  Or find a county with no apples but dying to have apples and export them there.

Here’s the point:  Change happens.  It can be from the outside or the inside.  Many times, the change that really rocks a company and possibly threatens its existence is change that comes from without, from the world beyond your company. After all, it’s not your fault the global markets  tanked. But wherever it’s from it’s your job to deal with it.

I wrote a post about Business on the Net: The Morphing Imperative. It’s all about facing the fact that something is not working right and you need to change it. You are selling “A” and the market wants “B”.  Or a recession has hit and you can’t make enough profit on “A”, so how do you survive?

That’s the critical juncture at which we have to not only listen to the market but act on what it tells us. In many cases, it may just require moving the spotlight from one corner of your display window to another, showcasing a different aspect of what you’ve proven you can do and for which you are recognized. The trick is to look very carefully at what your expertise really is and move in that direction, not away from it.

• If you are selling something, whether it is apples or widgets, see if you can sell it in smaller increments so you can sell it for a lower price and sell more of it.
• If you are selling a product see if there are other products you can sell through that same channel
• If you are selling a product, see if you can sell a service around that product: “How to build a widget”, or “I will help you build a widget.

In my morphing post, I gave an example of Beyond.com which was in a continuous morphing process for many years. Beyond.com was a business to consumer software site. When the business to consumer model seemed to flounder all across the Net, Beyond.com decided to leverage its existing knowledge and experience of selling online. It then targeted CEOs and executives of manufacturing companies who wanted an online presence to sell their products but didn’t want to undergo a long learning curve developing their storefronts. Instead of selling software, Beyond.com now used direct mail to sell their expertise to manufacturers touting the logic of outsourcing to “e-Stores by Beyond.com”. The pitch to businesses was “Why reinvent the wheel? Let Beyond.com build and manage your eStore for you.”
Beyond.com’s morphing continued.  They went on to become what they describe as the world’s largest network of niche career communities, powering thousands of job sites, apparently with success.
Beyond.com recognized, at their core, they were essentially a technology and networking platform. They chose to sell their expertise and the use of their platform to different communities, first those who wanted store fronts, second, those who wanted job boards.

If you look deep inside your self and focus on what is your core expertise, you can probably find a number of ways to monetize that, even in a down market.

Remember, when TV killed the movies, the movies discovered popcorn and candy could be their new profit center.  When movies figured out they could create big screen epics which couldn’t be replicated on TV they rose again.  And so can you.  Just keep morphing and evolving until you do.

If you’ve gone through a morphing experience yourself, please write us and share that experience so we can all learn together

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Women In Government  – Even if both Senator Clinton and Governor Palin were roundly trashed in some areas and by some media, women did score “18 million cracks in the highest, hardest” glass ceiling. And the end result of all the trashing was the launching of a new wave of women’s awareness and activism. Good for us!

Economy – Although the news is bleak, we can look at the state of the economy as a crisis we are in the process of overcoming.  And remember what we said about a crisis? “Although it certainly will be a challenge to recognize it as the crisis is unfolding, some good may come of it. You will see who your strongest leaders are….. If someone had a big hand in the disaster, hopefully he will be shipped off to a small atoll near Greenland. Problems will be faced. New strategies and early warning systems will be developed. Not only will new and better systems be installed but new leaders will emerge from the smoke and din of crisis.”  And we definitely will be getting new leaders.

Environment- Looks like the time has come for Green. Green businesses, green homes…. at long last, attention to the environment.  Just when we thought the time would never come, it’s here.

Careers -There will still be some careers that thrive. HR World suggests “If you want to recession-proof your career, the key is to focus on work that continues even when most people don’t have disposable income to spend. So while consumers may not hit the mall as often, you can guarantee that people will continue to get sick, pay taxes and use energy. These are just a few of the careers and industries that can be expected to thrive in a down economy”, all listed at Top 25 Careers to Pursue in a Recession – HR World.

Business – For which businesses will be able to sustain themselves in a recession, you can take a clue from Top 25 Careers to Pursue in a Recession only put yourself in the position of the owner of the business:

• “Health Care: People will always get sick
• Education: No matter how dire the economy is, there are always jobs for teachers
• Accounting: Death and taxes are a sure thing. You need to keep track of  your money whether you’re making it or losing it.
• Federal Government: Most federal-government jobs end only when workers retire.
• Skilled Services: Hair will always grow, and drains will always clog, so you can expect steady work in skilled services like plumbing and hairstyling.
• Consulting: Recessions are crunch times for companies as well, and they’re likely to bring in consultants for advice on efficiency and squeezing the most out of their resources.
• Government Contracting: Despite money troubles, roads must be maintained and schools must be built.
• Food: People need food to survive, and it’s not likely that anyone is going to just stop eating — no matter how bad the economy gets.”

There are a lot more of these more or less recession proof jobs.

Our point here is, however the election turns out, even if polls show that most of us are not happy with the direction our country has been headed, in the end, we’re all going to be all right, anyway.

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Image via Wikipedia

We can guarantee you one thing: there is a job out there someplace for you.  It just may take a lot of work to find it. And you may have to go through a period of settling for less than you want or think you’re worth.  But out of those forced decisions can come unforeseen opportunity.