Why hard times are good for business
I write a lot about the cycles of investment and the importance of playing the long game.
Short-term thinking is what kills a lot of investors and stops people from ever becoming financially successful.
And tough times are interesting times.
What do I mean by that?
Well, it tough times that sort the wheat from the chaff.
As an example, the Melbourne and Sydney property markets are in a cooling-off phase, and I reckon this will test a lot of property investors who were just in the market to make a quick buck.
That’s why a tougher business climate is actually great for customers and consumers.
You can really see who knows what they’re doing and who has been riding the wave of success on the coat tails of others.
Tough times can also be good for business.
Sounds impossible right?
Let me explain why…
Your competitors leave
A tougher business environment will often see your competitors get out of the game.
In a sense they weren’t really your competitors to begin with because those that get out when times are tough often weren’t in it for the long haul.
Not all the time, mind you.
But often booming industries, such as property, attract people without the passion or commitment, who want to make a quick buck and get out.
Tough times really do expose people and those that are running tidy ships will survive. Meanwhile, those that have no business plan and have not factored in softer business conditions will really flounder.
Those that can weather the storm often emerge with even more ground to stand on than ever before.
It forces you to reinvent
When times are good, it’s easy to get a bit lazy.
You might not have your eye on developments in your industry, potential threats or ways you could do things better.
It’s natural (and very human!) to want to take a break when times are good.
But there’s also something to be said for the pressure of a tough economic climate.
You’re forced to streamline you operations, and look for savings.
You look around at what other industry leaders are doing and think about how you could apply those to your own.
You learn how to reinvent your business, which often opens up even more lucrative channels that you previously had!
You gain resilience
Maintaining success in the face of hard times requires a toughness that can only be learned through experience.
Once you’ve relied on yourself to turn things around and come out the other side, you have a resilience that will serve you well down the track.
You’ll no longer fear failure or those tough times because you’ll have proven to yourself that you’ve got the staying power to make it really work long-term.
You appreciate the good days
Most importantly, though, you’ll really enjoy the good times after surviving a tough period.
Nothing brings what you do, and the reason you do it, into focus like a rough spell.
So, as much as you can, enjoy those tough times.
Try and see them as opportunities rather than the end of the world.
If that’s a step too far, well, maybe it will help to think of them as inevitable.
Because that’s what they are.
Not one successful person — whether it’s Warren Buffett or Richard Branson — has avoided tough times.
If all you want is good times without any challenges, then you’re better off getting a regular job and letting someone else do the worrying for you.
But you’ll never achieve financial freedom that way.
Running your own business, investing successfully, these are not without challenges.
But from someone who has done it for many decades let me tell you that the personal and financial rewards are more than worth it.
You’ve just got to start thinking of bad times as ‘good times’.
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