The best entrepreneurs know a recession is an opportunity to reinvent themselves, their businesses, and sometimes even their industry
There has never been a better time to innovate. However it takes an entrepreneurial mindset to see that what most people view as a crisis is actually an opportunity for you to pick a battle you can win.
When everyone else is taking flight, it's the perfect time for you to stand and fight because the odds are in your favor.
In 1915, Walter Cannon published his seminal work on acute stress response. (Anybody under acute stress right about now?) His theory basically states that all animals—including humans—have evolved to deal with stress in one of two ways: We stand and fight or we run like crazy in the opposite direction.
In the current economic crisis, larger companies have taken flight. They are hunkering down. Hoarding cash. Letting people go. Delaying (or canceling) all new projects.
But entrepreneurs are behaving differently. They are seizing what they see as an historic opportunity to reinvent themselves, their businesses, and many times, the industry in which you are currently hiding, uh, competing in. Consider:
Matt Kuttler, known for building a promotional products business, is reinventing the way small business supplies are purchased at ReStockIt.com;
Rick Jamaison, known for building accounting businesses, is bent on creating the greenest brake pad company at ABS Friction;
Marty Renkis, known for building an online training company, is bent on reinventing digital, wireless security systems at SmartVue.com.
And proving that you don't even have to go far afield to find new opportunities:
Brad Handelman, known for being the largest manufacturer of bowling bags, is now putting any high resolution image you want on bowling pins and balls at Ontheballbowling.com
These are not just dreams. They are ideas that were quickly turned into multimillion-dollar businesses by people who saw a need, had an idea about how to fill it, and experimented until they got the formula right. Does that sound like your company today?
Probably not. But it should. In times like these, entrepreneurs should be your role models because no matter what is happening in the economy, they constantly ask "what if?" They are constantly examining—and reexamining—opportunities most of the people in your company will overlook.
Scrap the Business Plan?
It isn't surprising the entrepreneurs listed above, and thousand of others, are responding to the recession this way. Adaptability is the hallmark of a great entrepreneur, no matter what you may have been taught in school.
Anybody who has taken a business class has been told something along the lines of "The secret to success is a good business plan." The only thing this statement proves is that your professor has never run his own business.
Find an honest entrepreneur and she will tell you she has changed directions so many times that her business has little in common with the initial plan—if there even was a business plan in the first place. The point isn't that business plans—or the annual plan you prepare for your company—are worthless. On the contrary, they are an excellent way to envision, create strategy, raise funds, and test ideas. But sometimes—like now—sticking with the plan is the worst thing to do.
Mike Michalowicz is a serial entrepreneur who embodies the flexibility and vision many large companies lack. But he does not attribute his success to hard-line traditional business planning; in fact, his approach is the polar opposite. Mike launched his first company, Olmec Systems, with the intent of selling computers and training to law firms, but Michalowicz quickly discovered an unmet need in supplying proprietary information to hedge funds, so he changed direction and became a national player before selling the firm.
His second company, PG Lewis & Associates, also followed an unexpected path. He formed PGLA with the intent of delivering computer forensic services to large corporations, only to find a tremendous need in criminal investigations. Yet again realigning his company to service an unexpected niche, PGLA achieved national prominence within three years and was subsequently acquired by a Fortune 500.
Today, Michalowicz, the author of The Toilet Paper Entrepreneur, is the CEO of Obsidian Launch, which advises small business entrepreneurs on how to grow healthy businesses fast, even in this challenging economic time.
"We can all learn from entrepreneurs," Michalowicz told us. "They are early adopters. They are innovators. They are risk-takers. While so many established businesses are in a frozen state of panic, entrepreneurs are trying new ideas."
Entrepreneurs know that freezing up, running away, or laying low just aren't options that will work for them. They would rather fail spectacularly than sit still and have the market do it to them.
We aren't advocating spectacular failure. We are advocating that you take some risks and stop acting like a Nervous Nelly.
Want some good news? Talk to an entrepreneur. Want big ideas? Talk to an entrepreneur. Want someone to tell you to grow up and stop crying? Talk to an entrepreneur.
Next time, we'll talk about how to convince your boss to put these ideas into practice.