Saturday, February 23, 2008

We're Opting Out of the Recession

You may have heard talk about a recession. Or a downturn. Or a slow-down.

A recession, according to the precise pointy-headed definition, is two or more consecutive quarters in which the Gross Domestic Product declines. In plain language, that means the economy is shrinking. There is only one fool-proof way to spot a recession: you have to look back and see if it happened.

"Everyone" says that, IF we have a recession, it will be a mild one. So, when Summer comes, we'll look back. We might find that there was a recession, or we might find that there wasn't a recession. But either way, it will be over when we look back.

Have you ever heard the term borrowing worry? Borrowing worry means to look ahead and worry about something that hasn't happened yet. And most of the time, that means worrying about something that never will happen. After all, our fertile human minds can concoct an unlimited number of scenarios. And we can worry about an unlimited number of things that will never happen.

Question: So, Will there be a recession?

Answer: Who cares?

A recession is defined by the entire economy either growing or shrinking. That's trillions and trillions of dollars. That's more money than Microsoft and J.K. Rowling combined!

Your personal economy (or your small business economy) is a completely different story. You're not even a drop in the GDP bucket. You're a molecule in a drop.

All you have to worry about is your personal business.

Our plan for 2008 is to grow 25%. We're on track for that.

I don't care if there's a recession or not.

We don't need trillions of dollars. Or billions, even.

To avoid recession, we only need to do three things.

First, we need to keep our clients happy. That maintains our base. Period. Right there we've avoided a recession.

Second, we need to increase our base. We raised our rates on January First. As that increase makes its way through the client list, we'll see an increase in revenue.

Here's a rule for perpetual success: If you haven't raised your rates in two or three years, do so immediately. What other thing in your world costs the same as it did three years ago?

Third, we need to expand our base. That means adding new clients. We signed a deal last week. So that's moving in the right direction.

We have a clearly defined, written profile of our "ideal" client. We will add one such client each quarter. That might seem low, but our ideal client is nothing to sneeze at. We don't add just anyone who walks in the door as a client. We make friends we intend to keep for many years.

As for actions, we have a marketing calendar that goes through the end of September. We will sign three more ideal clients this year because we have a written step-by-step plan to do so.

So, you see, we have simply Opted Out of the Recession.

If you wish to have a recession, by all means do so. But we're not participating.

If people decide to shop at Walmart instead of Target for the next three months, that doesn't keep us from giving our clients excellent service.

If people travel less this Easter, we're still going to increase our base prices a bit.

If businesses resist hiring new people, our marketing plan will still get us new clients. In fact, the resistance to hire might help us out a bit.

You know the addage Keep It Simple. You don't have to do a lot of complicated stuff to avoid a recession. All you have to do is a few things very well.

Join us and opt out today!


Oh! And if we look back and there was no recession, that's okay too. The few simple things you need to focus on are the same things that made you successful in the first place.


  1. Anonymous2:09 PM

    "We have a clearly defined, written profile of our "ideal" client."

    Karl can you elaborate on this?

  2. There are a couple of ways to define targeted clients.

    First, there's Dun and Bradstreet. To quote our marketing plan, our ideal client fits the following profile:

    - Physical Metro Area = Sacramento, CA

    - Industry SIC Codes = 60-67 (Finance, Insurance, Real Estate) and 70-89 (Services)

    Due to current economic issues, we are eliminating clients in real estate, construction and automobiles. And, of course, we're not targeting technology firms.

    - Employees Total: 25 - 249

    - Annual Sales: $5.0 - 99.9 million

    Second, there's the "softer" side of business. Once we start screening clients, we look for people who are used to signing service agreements. We also look for people who are nice to work with and who value long-term relationships.


    Those aren't our only clients. But that's our ideal client. In a perfect world, every new client would fit in this category.

    The money side determines who gets on our short list. The personal side determines who we actively seek as our next client.


    On the topic of weeding your client garden, see

  3. Anonymous2:23 PM


    Great post! I've blogging consistently on this idea that you create your own success, regardless of what the newspaper says.

    I posted today on your article and used the example of a homeowner who puts off buying a new house. That person suddenly has discretionary money to spend and a need to replace the gratification of buying a new home by other purchases.

    This hypothetical customer defers a six-figure purchase, spends a few thousand dollars, and has a negative (or at least not a positive) impact on the GDP. But for the merchant that earns those smaller sales, it increases what I call "YDP" (Your Domestic Product).

    Of course, if every retailer thinks that way, there won't be a recession.

  4. Anonymous6:34 PM


    I appreciate your optimism in 'opting out of the recession', however I believe the economic situation in the US is far more reaching than mere 'recession'. In fact according to some economic commentators what is unfolding may turn out as a 'very great depression' - unless the reserve can pull a rabbit out of their hats.

    I fully expect to see USD 1.75 = EUR 1 by the end of this year as panic-fear of a US currency and economic collapse eats into the American collective psyche.

    Unfortuantely Bernanke is signing the end of the current finanical system and the return to a 'strong dollar' is a bit like the 'liberation of iraq' - wishful thinking turning into a nightmare.

    There is however room for optimism if one can put into place mechanisms now that will help minimise loses in the coming half of 2008.



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