Why the recession is good news for entrepreneurs

So we’re in recession. And if you still have any doubt, look at today’s announcement of a disastrous fall in retail sales figures of 2%.

The RBA Deputy Governor Ric Battellino has warned that the GDP was likely to fall further as activity felt the impact of international conditions. So why is that good news for entrepreneurs?

Two reasons. First it provides a wake up call. And a wake up call means entrepreneurs can plan. I am constantly meeting “glass-half-full entrepreneurs” who hate bad news, blame any downturn on the media, and prefer not to see what is coming their way in the childish hope it might just pass them by.

But today is your wake up call. All of our businesses will be affected in some way or another this year, so it is crucial to stay abreast of the news. Now we know we are in recession, we can start planning for the next year with several scenarios, including best case and worst case.

There is another reason to be very tuned into the cycle.

Those who can plan and read the future will survive and even thrive. For example retailers, who will be suffering after a terrible February, will be cutting back on inventory. But later this year, maybe by October, stocks will be too low and many will need to reorder.

Those who understand the cycle and plan ahead by shoring up relationships with customers, offering good deals and running advertising campaigns, could celebrate a happy Christmas.  

There are many other opportunities. By later this year as big companies become smaller as they lay off staff, small companies can become bigger by picking up outsourcing opportunities. There are lots of other opportunities emerging, but entrepreneurs won’t see them if their head is in the sand and it is “business as usual”.

And there is another silver lining.

Smart entrepreneurs have been waiting for the official recession to start. Why? Now they can start planning for the recovery as the recession deniers get their heads around the bad times ahead.