Be a Winner instead of a Loser in a Recession
Jul 15, 2022
Every economic downturn as winners and losers. If this is indeed a downturn this will be my 5th one. I was successful in navigating 3 of the 4 previous cycle and grew my business. The one I suffered in was the 2007 financial crisis. In that one I fell into the same trap that most of us do I did not create my course in time to avoid financial trouble.
If we are indeed entering a recession, it is important to learn how we need to pivot as salespeople to not only survive but take advantage of the situation. How do we do this? Very simply look at past recessions and see who the winners were.
History does repeat itself often in a recession. If you lost your house in 2007 someone eventually bought that house most likely as a serious discount. As we entered the next positive cycle that house surely increased in value and made the buyer of the house money. If you were forced to close your business or shrink your offices, the vendors required to close and shrink your offices made money.
By looking at the past you can create a business strategy for yourself that can potentially prove to be very profitable.
Next, a recession gives you time to regroup. This is the time to build your foundation for your business so that when the recession ends you will be better poised to take advantage of the situation. During pandemic I chose to rebuild my entire business including hiring an Operation Manager, a sales Manager, a new marketing person and a you accountant all to better create a business platform that will allow me to grow quicker once the pandemic ended.
A client of mine always had the strategy to buy when the market was in a recession take the time to make the necessary improvements to the property so that when the market turned, he would then lease the property. Once he leased the property in better times, he would then refinance the property so that they had cash to buy properties when the market turned again.
Currently the office market is in trouble and that trouble could get worst in a recession. That means landlords will be lowering prices to compete offer higher commissions to brokers like me to attract fewer tenants. However, if you are a tenant and your lease is coming up you can upgrade your offices to spaces that previously were too expensive. In one cycle we moved our offices to a Class A building with water view spaces for less rent than we were paying in a Class C building.
As salespeople we must study who will win and lose and then pivot your business to seek the winners if you do so a recession could be a boom for your business.
Image via Pexels
Written by: Hans Hansson
Hans Hansson is President of Starboard Commercial Real Estate. Hans has been an active broker for over 35 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email firstname.lastname@example.org or call him at (415) 765-6897. You may also check out his website, https://www.hanshansson.com