How to survive in a bad economy
In order to survive in a bad economy, you need to understand 4 things:
1. What they call “the economy” has come to depend too much on MONEY itself, rather than the goods and services the money was meant to represent in the first place. Like an alcoholic on his drinks, the economy has become hooked on money, which poses as a dominant, but still fake “value”.
2. Money is, and it has been, being manipulated, separately from the the goods and services it should represent, but it no longer does, as it has been separated from them artificially by bankers and the stock market.
3. Therefore, any “economical” crisis is actually a MONEY crisis. It is money, that is in trouble, not “the economy”. It only drags the economy with it, as they have become so interdependent.
4. In order to solve a financial crisis, be that personal, national, or international, the first thing to do is to stop focusing on the money and start focusing on VALUABLES that money is just a (very poor) representative of.
When you do valuable work, you create something that someone else WANTS. When you earn money, be that as an employee or an entrepreneur, it is because someone else got some value out of what you did.
What is most misleading, is that the chain reaction that manipulation of money on a massive scale leads to (like it has been done by criminal bankers lately) affects the entire economy, and with rising unemployment, layoffs, bankrupt companies, ailing national budgets it seems like “trouble is everywhere”, when in fact it is in one place only: it lies with money itself. The medium that connects buyer and seller has been betrayed and abused to the degree that it fails to do what it was supposed to: represent real value, not manipulated stock figures or “value” that only exists on fake statements based on some corporation’s creative accounting.
It is like someone cutting your veins open and stealing a large amount of your blood, so your circulation is no longer adequate and you become dangerously ill.
That is what happened to the economy.
While you may not ever be able to catch the criminals who cut those veins and ran away with the “blood” of the economy, what you can do is become less dependent on money by replacing it with VALUE in your thinking and acting accordingly.
Easy to say. How do you do it?
1. Change your thinking about making money.
Peddling “stuff” or “content” or “raking in the cash” with “no product needed”, as most of the internet marketing community seems to be obsessed with, is a dead end.
I don’t need to prove it, just put yourself in the shoes of the customer and tell me how good those promises sound to you from that viewpoint:
Do you want “your cash raked in” by someone else?
Do you want to buy “stuff” that is sold ingeniously, but has little value other than the magic words and “psychological triggers” on the sales page that sold it?
Do you want to be sold something by someone’s “money-sucking website” that “extracts money from visitors like magic”?
Those are all claims made by “internet marketers” who sell the “know-how” of how to do that. Sorry guys, you got it wrong.
If you want to make more money, here is the way to do it: CREATE MORE VALUE.
That’s another easy thing to say. But there are thousands of ways to create value, and if you want to get an endless stream of ideas, then just look for things around you (things you have bought, or seen somewhere) that you appreciate, consider REAL value, and that you are glad you bought or would be happy to buy. Then get to work coming up with ideas for creating something that someone else will appreciate the same way. Ask and survey people to test your ideas - if you like it, that’s nothing, if they like it, that’s everything. If you have people getting excited, that’s a good sign you are onto something.
2. Reinvent your business model.
Most businesses are built on a fixed business model. Something like they produce or buy a product for 10 dollars and sell it for 15. They may have done it successfully for years - spending 10 dollars on the product, 2 on running the business 1 on advertising it, and they made 2 dollars of profit on every piece they sold. If there is a bad economy, the volume goes down, competition forces them to lower their price to 13 dollars, while the unit cost and the cost of selling goes up (as it is harder to sell to people in a bad economy). The result is that the remaining margin of 3 dollars may no longer cover the cost of running the business, especially at the lowered sales volume, and it may end up costing it 14 dollars to sell a 13 dollar product. And that’s the end of the business.
The lame and foggy advice handed out by many “experts” to “be better” or “try harder” when the economy is tough, etc. doesn’t seem to help. So what do you do?
Rethink your business model along a simple principle: ADD MORE VALUE.
Value is in the eyes of the beholder, so survey, ask people what they WANT, how they want it, what would help them a big deal, what problems they are running into, etc. Then work out solutions to those REAL problems. The saddest solution is the one without a real problem to solve.
When you manufacture something, you add value by making raw materials into a useful product. The product is more valuable than the raw materials, so you added value. When you sell something, you connect the customer (who may have never found out about the product without you) with the producer of something, and you service the customer, which also adds value. If you deliver a service, you add value by improving the client’s life, business, environment, etc.
The key to a good business model is that it adds a lot of SELLABLE value to something. A good business model is able to create value that can be sold for way, way more than it costs to produce. If the raw materials cost 1 dollar, the work costs 2 dollars, running the business costs 1 dollar per product, and the perceived value of the product is 40 dollars (people are willing to pay that much for it), then you have a winner.
How do you create such a winner?
3. Learn how to make something out of nothing.
I believe that the highest skill of an entrepreneur is the skill of creating something from nothing. Taking a mere idea and building a successful business out of it. Thinking up a new product or service, and investing the work that it takes to turn it into something that people appreciate enough to spend their hard earned money on. Wrtiting advertising copy that sells something successfully. There are a lot of other ways to do it. The common denominator of ALL honestly successful entrepreneurs is their ability to create something from nothing.
Sorry, investing on the stock market for huge returns does not qualify. Even if you successfully do so, you created no value, just sucked more value out of the economy for yourself while you added nothing to it. You may be rich, but you will never be valuable.
Being rich without being valuable is being a big fat leech. Being rich and valuable feels a whole lot better.
The concept that the market for any product or service is a fixed size “cake” that you share with your competitors, and the goal is to grab the biggest possible slice of that cake is ridiculous. When you introduce a new service, create a new product, come up with a new way to package or sell an existing product, etc. you just baked your own cake. Others will then work on getting some slices of the cake you created, just as they are taught, but you have no reason to worry about competition if you can bake another cake any time.
Let lazy people fight over the existing cakes, while you go create newer, bigger and tastier ones.
If you want to be a huge success, make it your goal to create more value by finding ways to make something out of nothing.
Money is just the intermediate between the value created by someone and the person who wants to have it. Stop focusing on money. The true power is in the value the money stands for. Learn how to create and sell that value (both skills are needed), and people will give you exactly as much money as you deserve. So be sure to deserve a lot.
PS. If you want to leave a comment saying something like “well, this is just the basics of economy”, etc., don’t bother, Mr/Mrs. PhD. Just look around and see how many businesses operate in blissful ignorance of these basics and you will see why there is a need for education in these basics as simple and concise as this article. If I will help just one business owner by having written this article, then I didn’t stay up late in the night writing it for nothing.
Then I added some value.