Business: Take Advantage of the Trickle Effect

Stormy Weather

Good times and bad times start at the top, and then the effects “trickle down” to small businesses and regular people.

Right now, we’re seeing the trickle down effect from a bursting property bubble and mile-high piles of consumer and government debt. So what’s the best way to deal with that?

Well, trickle “up” of course.

First, The Vicious Trickle Down Cycle

Because of the property price implosion, a lot of things are happening:

  • Lumber mills are shutting down temporarily or even for good
  • Companies like Linens & Things are filing for Chapter 11 bankruptcy protection
  • Many large companies are laying off thousands of employees

These things might not affect your business or even your industry. But the next stage of the trickle down will. Millions of people and companies will have to cut back their spending. Some will cut back severely and eventually this will trickle over into other sectors.

And of course, it becomes a vicious cycle because it’s exactly the sort of economic climate that’s going to depress property prices further.

How to Trickle Up

This is a tough task for most businesses. It’s literally an upstream battle. But with a few smart strategies it’s easily achievable …

  1. Show me the money. No matter what’s going on in the world, some people always have money. Start gearing your products and services towards these people and companies. Think quality, and exclusivity.
  2. Problems need solutions. The great thing about bear markets is there are lots of problems. And every one of those problems need a solution of some kind. Create those solutions and you’re golden.
  3. It’s time for a new deal. US President Franklin D. Roosevelt initiated a series of new reforms to help pull people out of the Great Depression of the 1930s. These reforms were called the “New Deal”. If you can’t beat the trickle down (and you don’t want to get caught in it) create a new direction. Be innovative and create new products and services that pave a new path forward.
  4. Swim with a buddy. Sometimes the trickle down can be a raging whitewater torrent. Partnering up with another company that has different strengths is one way to make both businesses stronger. A partnership can give you access to new markets, additional expertise, and an avenue for creating innovative product and service packages you couldn’t create on your own.

The keys to trickling up and not getting caught in the trickle down are composure and creativity. Don’t get wrapped up in the mayhem. Get wrapped up in creating new avenues of unique and real value.

And don’t forget your umbrella.