“What Is This Thing Called ‘Recession’ And What Has It To Do With Me?”

Here's a reprint of an article I wrote for the National Carpet Cleaners Association magazine in the UK back in 2009. I think you'll find that it still applies!

Earlier this year I was watching a football agent being interviewed on Sky Sports. It was the day after the football transfer window had closed. The reporter asked him “Is the recession affecting football clubs?” His was response was that in general it wasn't. In fact he made the point that more players had been sold for a sum over £10 million than ever before. Determined to report some doom and gloom, she said that smaller clubs must surely be having a bad time. When the answer was again a negative, the reporter concluded with the comments “So at the moment, football is not being affected by the recession but how long it will be before it does…we will have to wait and see!”

This interview was a prime example of the media of today. Report ‘doom and gloom’. And if there isn’t enough, make some up. I’ve found it helpful to remind myself of the real economic situation in this country at the moment. After all, I’ve not really found my business that affected by the “recession”. In fact, two weeks ago, we had our busiest week for well over 12 months. All residential work I might add.

So here are the facts: According to the National Statistic Office the workforce in the UK is about 30 million out of a population of around 60 million. Unemployment is around 6.5% as we’ve now passed the critical two million mark.

Hold on…doesn’t that mean that 93.5% of the workforce are…in employment!

Even if it rises to the dizzy heights of three million as the worst predictions seem to be, doesn’t that mean that 90% or 9 in every 10 people who are able to work are actually in a job. Suddenly it doesn’t seem so bad. Not only that, but the public sector (ie: taxpayer funded jobs) has actually taken on more staff over the last year and given them above average pay rises!

Parallels with the ‘Great Depression’ of the 1930’s doesn’t help either. Paradoxically, life got much better for those who kept their jobs back then. The cost of living fell sharply, so their spending power rose sharply. Some parts of Britain were actually more prosperous at the end of the 1930’s than before.

I now make it a point to tell these facts to as many of my clients as possible. Many seem to think that soon nobody will be in work or have any money. Yet there are many firms doing well. Cadbury’s for example has recently reported a 30% increase in annual sales, up from £430M to £559M. A Daily Mail article in February had the headline ‘Fee Paying Schools Beat The Recession’. Apparently record numbers of parents want to put their children into expensive private schools.  There are many, many more.

Getting through the “Recession” is largely a mindset thing. I have heard of several people who have stopped reading the newspapers over recent months. The effect has been that they have simply stopped worrying about any “downturn”. For us, we have made sure that we target PWM (people with money), explained very clearly why we are the best value for them and have not reduced our prices at all. When things are ‘tight’, people still spend, they are just more careful with whom.

Oh by the way, in a recession, nearly every business cuts its marketing spend. If you increase yours to find high quality, high service seekers who are prepared to pay a premium price for it, your business can not only withstand a recession, it can positively thrive!