Posted in Business, financial crisis | 14 Comments
How Will the Financial Crisis Affect Your Business?
I don’t believe that we have seen the worst of this financial crisis yet. No matter whether the bailout bill finally passes or not, this country is in for some tough times. There will definitely be job losses and the housing market will continue to go down.
What does this mean for your business?
First of all, if you don’t have an internet business yet, why not start one in your spare time? This way, you will have a jump start on a new business, just in case you lose your job. I think this is definitely worth thinking about.
If you already make a living online, then this is the time to make sure that you are diversified. Don’t put all your eggs into one basket. The online world is not immune to what is happening in the economy. There will definitely be changes coming.
Some niches and business models will be more affected than others. You or I can guess at which ones might do better, but it’s hard to be sure. That’s why it’s important to have multiple sources of income, or at least be in multiple markets. If all your income is coming from one place now, start thinking about how else you can make money.
I believe that as more people lose their jobs, more people will be trying to replace their income by attempting to make money online. This could be an opportunity if you are selling products to help these people. On the other hand, this could also cause more competition in the “make money online” area.
If you are an AdSense publisher, then your results will probably vary by niche. Yes, I’m sure Google and AdSense will still be around for a long time. But the particular advertisers that are advertising on your blog might go out of business or just cut back on their advertising. But others might do more online advertising, finding that to be more cost-effective than advertising offline.
As people start trying to save money, they will be spending less. There are some things that people always spend money on, and other things that will be vulnerable. I’m not in the gambling niche at all, but I think gambling and other forms of escapism will grow larger as times get tougher. People will want to forget their troubles.
Also, luxury items might not do badly, if rich people continue to spend. After all, it is mostly the poor and middle class that will be really hurting in a financial downturn.
If you create information products, think about what kind of information people will need in tough times. If you guess correctly, you might do really well.
I think your guess is as good as mine, as to what will happen and how best to continue to profit in your internet business. I really think you should start thinking about it, though. And it won’t hurt to experiment with new things.
What are your thoughts?
- Pat Doyle
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Good points, Pat.
I really think it will vary market by market. If you are selling to the real estate market, it’s going to be tough – pretty much the whole real estate industry is operated on credit.
Cash is king right now. I know of a friend who is in the business brokerage industry and there just isn’t any deals done – the only ones buying are ones with cash!
I agree with you that those selling to the “make money online” or “make money at home” crowds may experience more business because people are looking to take on 2nd jobs or having side income.
Thanks,
Steve
I agree, you’ll need to be flexible and follow the money. The truth is that no matter who wins the election in the USA it’s always best to help yourself.
Now is the time to dig in. This crisis goes back to Alan Greenspan who had too lose a hand for increasing money supply.
I think the biggest impact is going to be an influx of newbies looking to make money online either because they have lost their job, their bonuses have gone done, or they are worried for their job. I think your point re products that appeal to newcomers is well made
I think that anyone in the money making niche is going to do well during these unsettled times as more and more people look for other ways of making money.
I sell quite a few info products on eBay and if anything I’ve seen an increase in sales. I think people are still spending on credit cards and will purchase “make money” products even more.
I think the “work at home” market is huge and still growing. Who wouldn’t want to work at home and spend more time with their family?
Online businesses are relatively low start up too compared to a franchise etc. Don’t get me wrong, I’m not saying it’s easy because it’s not. But with hard work you can make a modest living. Even selling a few items on ebay each week.
I thought eBay disallow info product listings? I don’t remember which internet marketing “guru” it was who said publicly that it is difficult to make money in the “make money” market – well obviously he would want to say that to fend away other competitors from entering into the marketplace.
Keep focus on selling then you should do fine.
I think you are right and the crisis could get much worse before things start to improve. I think starting some type of small side business is a great idea right now, especially if you can both increase your income and offer a service that is affordable to people looking to reduce costs. That’s why I’m working on my virtual assistant business – people still need help and being able to hire it on a contract basis is more attractive right now than the expense of full-time employees.
Laurie, your points that working virtually will be useful for people who continue in their chosen fields are right in line with my thinking. From another point of view, working from the home office in connection with a shrunken job or starting a separate business offering one’s skills and services can help maintain some balance in their lives, both work and personal. The link you provided to vanetworking.com is a valuable tool for anyone making the transition to a ‘virtual commute’. There is a lot of stress to making changes; finding some sensible networking resources can make a big difference.
I support the thoughts that we all have to keep working and offering our skills and products regardless of what solutions are attempted. The best way to beat inflation is to earn more.
I’ve been thinking about this a lot lately, with the state our economy is in and the unemployment rates, etc. Even though some online businesses are suffering – look at how many blogging networks have restructured their payment systems lately – having a virtual business is still becoming a more appealing option.
There was a great article last week about how the Virtual Assistant industry is and will continue to thrive even during a recession, at http://vanetworking.com/blog/vainsiders/aiming-high-is-important-recession-or-not/
With more people going virtual and creating their own business, the idea of hiring someone just for the hours they need and not having to provide office space or benefits is an economically sound alternative.
I definitely think the crises will increase businesses use of the internet as a marketing platform, after all the internet allows you to track exact results, where as traditional marketing such as TV and Billboard’s can’t generate reports for you such as CTR, Conversation rates ect.
I agree with you Pat. And I like the advice you gave in your emailed lessons on building traffic to my site. These are definitely tough times, and it will be interesting to see how things play out. I don’t have much confidence in the people in Washington who pushed the Bailout Bill (great American rip-off) through. Thanks for the hard work.
Your friend,
David Settino Scott
it will affect everyone greatly, it has already put a heavy blow to my sales this month, going to see further drop in sales in the months to come.
Looking Back a year later you are absolutely correct. But now what is happening?
Business to business marketing is up consumer spending is up
I think now in the end of 2009 we may have finally hit bottom. my personal business has been picking up and we are adding a large amount to our marketing programs and emailing list programs.
So for me i hope the worst is over and i hope business grows from here.
I think that we’ve all been affected one way or another; it’s just that some care more than others. Ironically, the less you have the more affected you might FEEL. Now what will widen difference between person A from person B is how they REACT. My advise is to take the situation with both hands, look at it without flinching and set to cut waste. Being in internet marketing has given me opportunities as well as resources and though it’s harder for everyone these days rule no 1 has not changed: If you want it bad enough and go for it, you’ll get it!