On a weekly basis I run into people in the StartupNation networking forums who are beating the odds in this tough economy. In fact, they’re finding that the tough economy itself is creating greater opportunity.
Take chef-turned-entrepreneur Tom Sausen, who runs a business that has grown approximately 20% annually for several years. He approached me after one of my speeches. He was in character - dressed in white chef garb (sans the hat) - and wanted to share his $.02 about strategies that work in a down economy.
In 1998, Sausen decided to leave the restaurant business to help chefs at restaurants run a more penny-wise, efficient business. His company, Bonewerks Culinarte, provides chefs gourmet sauces and sous vide “boil-in-a-bag” entrée products like demi-glaces that his company makes around the clock and delivers daily. Now that chefs can let their fingers do the walking instead of the cooking, they can avoid the drawn out, very particular process of creating “signature” sauces and marinades from scratch, which can take 24 hours and often yields only hit-and-miss results. The chefs now leave that painstaking process to Bonewerks Culinarte.
What Sausen uncovered is a pain point in a tough market – skilled labor is being cut back in the restaurant industry because customer volume is down. But regardless of fewer diners at the restaurants, the same hours must be spent preparing sauces. Anything that alleviates the pressure of having fixed costs for skilled labor and minimizes time-intensive tasks for already stretched chefs is a godsend.
Tom Sausen has identified a screaming need that screams louder in a tough economy. And his business growth rate confirms it.
Ryan Allis’s iContact is experiencing much the same. His Durham, N.C.-based company offers email marketing services to small businesses who want to find economical, totally scalable ways to connect with their customers. As budgets at the smallest companies get leaner, only the most efficient and effective methods for drumming up business become practical. Enter the screaming need for email marketing that screams even louder these days.
As Allis says in his blog at StartupNation.com, email marketing can be a transformative marketing tool if used right, especially when every dollar spent has to correlate to dollars made. And iContact’s millions in annual revenue is proof that small businesses are hip to Allis’s advice.
In these tough times, there’s more pressure than ever to find affordable, fresh, convenient, direct, and “invited” ways to communicate with their customers. The internet is crowded with ads and spam, TV is flooded with commercials, and advertising “noise” in general is at an all time high. Economical, permission-based channels like email marketing are critical to help small businesses break out and get their messages noticed and customer relationships shored up.
These are just two examples of how the tough times yield opportunity and how smart entrepreneurs use the environment around them to their advantage. There are thousands more – and you should be one of them. In case you aren’t yet, but want to be, here’s something to keep in mind as you bird dog your own screaming need: Look for preexisting, established needs – this helps you avoid the costly and time consuming process of educating customers. And don’t be afraid to offer what someone else offers – it’s a sign that there’s demand. Just be sure to add a twist to distinguish you from the rest of the field.
Next week I’ll cover two glory stories of entrepreneurs who’ve launched, survived and thrived in this tough economy based on sheer, undeniable passion.