We’ve all heard it in the news. “RECESSION!” scream the headlines. These headlines and news articles about upcoming recessions are designed to induce fear. However, instead of worrying about getting laid off, losing your house, or any of the other scenarios that the media loves to portray, I’d like you to consider this: What if the upcoming recession is an opportunity for you to make more money than you are now — and be happier to boot?
Let’s turn your fear of recession around into motivation. I have brainstormed three business ideas that you may want to consider as the economy hits the skids. Each business idea highlights reducing recurring costs. For businesses, recurring costs are mainly employees, services (phone company, Internet access) and service providers (accountants, lawyers, etc.) For people, the main cost burdens are monthly recurring costs for mortgages or rent, cell phones, cable TV, and electricity, as well as consumables like food, household supplies, and clothing. These costs can add up quickly, and your work to reduce these will pay dividends for the business or person you are helping for many years down the road.
#1: Offer “ninja” negotiation strategies to other people.
Are you the type who always seems to be able to bend service providers to your will? You’ve followed all the recommendations, read online forums excessively, and know exactly what promotions cell phone companies and cable companies offer…and know how to get them. As a result, you often get better deals when you sign up, and know who to talk to to get better rates once your contract period is up. Other people will definitely pay you for this! Most people pay full retail for their products and services. If you know the better places to shop, share them with an ebook or blog, or offer local classes. Get together deals where your ebook readers or seminar attendees can save money — and preferably, where you get a small piece of it if they do.
One word of caution here: make sure your #1 goal is to help other people. Sell them products and services they would benefit from, not just ones that make you money. I strongly recommend that you test all the products you offer to make sure they make sense for your customers. For instance, if you recommend that your customers switch phone companies, you need to be using the phone company you’re recommending. If you’re using another one because it is cheaper, but recommending one because it makes you more money, you are incongruent. Your customers will sense this and will be less likely to buy from you. Plus, personal testimonials from you are the best testimonials because they are honest.
#2: Consult with businesses to reduce cost and streamline systems.
This is another strategy that you can use as a consultant to make some extra money on the side — or write about to make more passive income. Start with businesses close to you — maybe a business a friend or family member owns. Explain that you would like to work with them to see where they can reduce costs. Ideally, you will be confident enough to only charge a percentage of the money you save them.
For instance, most businesses could save money by switching credit card merchant accounts or phone companies. You will do all the legwork of finding a new company, checking reviews and resources, making sure the new system will integrate properly with their existing systems, and finding the right people to get the system installed. You take 15% of the total savings — if a business could save $5000 per year, for instance, your fee is $750. These fees really start to add up if you can streamline and replace entire systems for multiple businesses in the same industry.
Most of your work here will be in the beginning — to find a system of great companies that you can rely on to provide excellent service, and that will work together. The dividends pay off when you do the same work for other companies in a similar industry. For instance, if you string together three companies in the technology industry — one that provides a web hosting service, one that provides a web design service, and one that provides a phone service — and figure out how to integrate the three quickly and easily, you will provide a system of great value to a business.
Add in a computer repair service and a company that provides excellent purchasing deals on computer systems, and you have a basically complete “IT system in a box” for small businesses in a specific market — say, accountants, or lawyers. Best of all, your overhead is practically zero… you’re just introducing companies that will benefit from working together. You can do the integration work yourself or find another company to do it. Building the relationships in this system and understanding how the companies will integrate is not easy at first, but it can be incredibly lucrative. Once you do one, you will quickly understand how to do it again and again for maximum profit…and you will have happy customers who did not want to do the legwork to find all these companies themselves.
#3: Help people simplify their lives.
Back in 2006, I mentioned that simple and frugal lifestyles would come back into vogue as the real estate bubble burst. I was more right than I realized. Frugal and simple living is now trendy and likely will continue to be for the next several years. Check out this recent CBS News segment for an example of what the media is portraying.
This is a sector that is poised to catch fire, and the #1 sector I would recommend anyone starting a business consider. Are you naturally frugal? Teaching classes on how to mend your own clothes, make your own gourmet coffee or beer, or even how to repair your own appliances may be your ticket to a comfortable lifestyle. All of these classes can, of course, be written as ebooks or online classes as well for a larger audience and more income potential. With this section, the more you can write, the better. If you are an expert at sewing, team up with someone who is an expert at buying fabric and offer joint classes or sell each others’ products. Expand outward: find fabric stores that will offer you a commission every time someone buys from them, and review the latest products in your industry — all with a focus on saving money.
One of the most popular magazines right now is called Real Simple. Flip through it and others like it. Look at the ads and the articles. What are people interested in? What can you write about, teach, or make a video about to reach this audience? Where does your expertise come in? Perhaps you’re an expert on gardening — reframe that to “How you can save over $200 a year with less than 1 hour of time a month” by growing your own herbs and vegetables.
What these business ideas have in common
There is a key point to each of these business ideas, and that is, in each business, you are helping either people or businesses save money and become more efficient. At the same time, you’re getting paid handsomely to do so.
One thing I would like to emphasize is: Do not be afraid to charge good money for valuable advice. If I told you there was a way you could save $100 this year with basically no work on your part, would you agree to pay me $20 of that? If you approach either people or businesses with integrity and make this offer, most will say yes — and those who say no are not worth your time. Even in a recession, the most valuable commodity we have is our time.
As a business owner, I assure you I didn’t want to spend an hour calling 10 different merchant account companies to find out who would give us a better rate to process credit cards. But if you do that legwork for me, show me how much I would save, tell me you’ll do the rest and make sure it all works with my existing systems, I would gladly pay you 15-20% of what I would save in the next year.
The same goes for your gardening, sewing, or recycling tips. People will pay you to tell them how to make a compost pile, for 50 pages of tips that will each save them $50 a year, or to show them a valuable skill like mending and hemming clothes. Find companies, people, and stores you want to work with who will pay a referral fee when you refer them business, and pair these resources with your expert advice. You might even find you will make more money doing this than you did in your job — as long as you remember that it’s perfectly OK to charge for sharing your expert knowledge.
Best of all, all of the above businesses can be started part-time as you work a regular job. That way, there’s little risk to you if they don’t work out or if you suddenly decide to switch gears.
These tips should get you started turning your fear into opportunity. What other businesses will work during a recession? Any further comments about the above business ideas? Please feel free to post in the comments below.