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80% of the top economists declare the recession is over. But why am I not surprised to hear recovery might be slow? I've received many emails asking about whether now is the right time to start a business or not. So I'm inviting my fellow Designing Moms today to comment in a roundtable about how the economy has affected them both personally and professionally.
I'd love to ask the moms:
--Did the recession affect your business? Were there any positive results from the downfall?
--How did you handle the changes (downsizing, budget cuts, refocusing priorities)?
--Do you feel like your industry has changed as a result?
--What advice do you have for someone who wants to start a small business this year?
8 comments:
i think if anyone claims that the recession didn't affect their business in some way, they're not being completely honest. even if your sales were the same, maybe those payments came in a little slower, maybe the orders a little further apart. i know for me, when people asked how it was going, i always said "great, busy as usual". while that may not have been the whole truth, i didn't want to get bogged down in negative talk and thinking. for me, that would have made things worse. and it wasn't like i was lying. i was busy, just busy with different things like designing new products or thinking of a way to get my customers to pay their invoices. i think one positive outcome of the recession was that it taught me that i shouldn't expect to make more money every year that i'm this business. things can change quickly and i need to be prepared for that. i never really considered a "savings" account for the business before this. i'm not sure why, but now it's on my to-do list for sure.
for me, i handled the changes by releasing fewer designs per release. i firmly believe that you have to release new products to stay in the game, but instead of releasing 12 designs at a time, i released 8. something simple, but also money-saving, and i'm not sure that the retailers even noticed the difference.
i think one huge change to the industry that has come about from this is the idea of trade shows. before it was feasible for small companies to go to the national stationery show every year. now, i think the smaller companies are trying to think of new and different ways to get out there rather than spend $10,000 every year on a 4 days how. i think while the recession will pass, this way of thinking is here to stay.
i'm not sure i have any great advice for anyone who wants to start a business other than do what you can when you can. if money is tight, pull the reigns in a little for awhile. i think once the recession is really, fully over, retailers will be hungry for something new since they too have had to limit buying.
hope that helps!
-lori
Thanks for such a great perspective Lori. I SO agree about being "busy" but in a different way. And I definitely felt that my industry (stationery) changed as a result of the recession. With that, I had to spend a LOT of time evaluating what I needed to do in the coming year...marketing, budgeting, and product design-wise. I also have a little boutique in my studio. Retail was probably the biggest challenge as I saw my fellow retailers on the block suffer greatly. Even though the boutique is not a major component to my business, I still found myself ordering far less than I had before (like 30% less!) to stock the space.
The positive that came out of this is discovering my biz didn't need as much as it did...in past years I was probably over-compensating on supplies, materials, labor. I feel slightly cleansed now, a bit roughed up...but cleansed and ready to see what the new landscape brings!
My advice to anyone wanting to start something now? I would spend some extra time thinking about your marketing strategies. Like Lori said...where it may have once been the annual trade show where everyone went to sell their products, it may be a changing story now.
I'm new here, but I'm going to jump right into this conversation.
My husband is a photographer and sells at art shows through out the north east. In the last few years sales have gone down a lot. There are a lot of his friends who have had to go out of business. The recession has hit the art shows very hard. We are still hanging in there, but money is a bit scarcer than it was, but we'll make it and hopefully things will be back to "normal" soon.
I teach some classes in papercrafting at My Happy Place, here in the Buffalo, NY area. We have found that people are just not signing up for classes. They are reasonably prices classes and the "items" we are offering are great ones, but people just are not signing up. We are feeling that this is one of the things that people have cut back on as not necessary.
Another thing we have found with our business (my hubby and me) is that we are selling the smaller ticket items. The $10.00 items will still go when the larger items don't. So we are sure to have plenty of stock in those items.
For someone who is just starting, I would say to be certain about your price points, be sure you are asking a price that people will see as feasible in a time when they don't have a lot of disposable income to be spending on 'extras'
We launched our company last October. We knew that building an art licensing biz would take some time (it's the nature of the business... a longer story), so we were prepared to rough it for a while, even before we knew exactly how deep and long the recession was going to be. While we don't know exactly how much the slowdown has affected the pace of our growth, it's definitely given us even more reason to keep our near-term expectations modest and to just keep our noses to the grindstone, building for what we hope will be a very successful future.
So if I have any advice or perspective to give to someone who's thinking about starting something new, I'd say that it's a great time if you HAVE time and the financial flexibility to wait it out. We have been able to use this time to build a really solid business foundation without a big investment and without the distraction of thinking: "My god, the economy's booming... we've got to get a piece of that action!!"
On a more philosophical note, I think the recession is just one piece of much bigger change that's happening in the world. We're really being forced to rethink the way we live on so many fronts and I can't help but believe that we're going to come out in a much better place because of it. While it may not be the best time to make a huge investment in a new business, or to leave a reliable paycheck, it's a GREAT time to be dreaming about what's next, and planning to be ready to make the most of it!
My business - which is an internet-based store (both etsy and individual) has been really affected by the economy. My orders come in much more scarcely and there is simply no denying that sales are down.
My price points are such that in a good economy - they are at the upper end of what I call "impulse buys" for handmade clothing - in a down economy... they're such that you want to think about it a while - or ask for it for a birthday or holiday gift. At the holidays, I find my items are still selling well, it's just that people aren't seeming to buy them for themselves quite so much.
I have found that craft shows/art shows - etc- are not really what they used to be. I've cut down on them myself - as a lot of the people who run them are also scrambling to find people to fill their booths... the traffic is down... it's all pretty tough.
I've spent this year being joyful for the time as mom, and have tried to not worry about my business so much. I have chosen to know that my products are good and stand time and trends well... so this is my time to have joy in the little things - like the little people here who get just a little more of mommy when I am not so stressed juggling work and them.
Here in the Netherlands we had a small meeting of some etsy shop owners. We all sell less, also the ones who did sell good. Craft shows or fairs her are also not good for selling and people are not signing in for workshops. I defenitly think about a regular job, but designing and making things and teach that to others makes me so happy that I'm not ready to give it up. And besides that, our 14 year old son has Aspergers and this is also the reason that my 12 year old doughter and I started our little etsyshop, it is so much easyer to work from my home! So I hope for the best, and maybe I'm going to swap my stuff for Christmas presents or make them myself. I buy less magazines and craftbooks, textiles and use recycled and left over materials(I must admid, I could sell my stuff, and maybe I'm going to do that to) So not the best time to start is my idee, but.... if you are creative and alrady at home by choise or not and you have time maybe for you this is the best time to start, just be aware that you could do everything righr and still not sell! Keep focus on your own idee, and do not get nervous and change what you do all the time, good luck! You defenitly meet very nice people in the arts and craft world.
Marijke and Caitlin(12)
What a great topic! I agree with Lori that things are still busy, but in a different way. That said, business IS slower.
We are dealing with this by being as creative as possible in how we release products (stationery) and how we work with our retailers. Minimums have gone out the window, we've done "virtual" releases where the designs go up online first and then retailers order a small sample deck, we've launched a "Trunk Show in A Box" concept for the holiday season... the goals being to make it easier for the retailers to continue to order. Had the recession not hit, who knows if we would have come up with any of these ideas, so "necessity being the mother of all invention" has been one positive outcome of the change in economy, and coming upon a creative idea that works makes business fun again, even if sales are down.
I agree with Lori that trade shows will forever be changed by this recession. Manufacturers and stores both have cut back on trade show attendance, and both have found that they can sell and buy with or without them if they have to. The other major change in our industry as a result of the recession will be to the category of imprintable stationery. Stores wanting less inventory has resulted in more custom ordering and orders being fulfilled on a "just in time" basis. This will be the norm going forward and printable design templates, drop shipping, etc. will increase.
As for starting a business now, I guess I'd say be creative and talk to the customers you're trying to target before you do anything. Find out how and when they buy before you decide upon your sales strategy, as their buying habits have probably changed since your competitors first went into business. If you can come up with an innovative way to reach your target customers while the economy is bad, that innovation will, I think, be doubly rewarded once things improve.
i am commenting on this a little bit late because i am actually out of town at the moment and not my usual online self. i still wanted to take a minute to bring something to the (round) table. :)
first of all, i love everyone's comments. the thing i see that everyone seems to have in common is optimism. it's inspiring to see the positive attitudes that everyone has. maybe times have been tough and continue to be, but having a pro-active and positive outlook does wonders for business (and for your spirit). the fact that none of us have given up and have chosen to refocus on different things is a great way to approach the problem. it's so true that although we can't control the economic climate, we CAN control our attitude and mind set. i think that choosing to stay positive is a huge bennefit to a creative business owner.
one way that i see the stationery world changing (aside from trade shows being down - which is a bummer because i love the NSS) is that designers are focusing on online collections in addition to their boutique lines. many artists are licensing their work to companies like cardstore.com, tiny prints, minted, kodak gallery, shutterfly, etc. some designers are even starting their own online digital collection like whitney english and our very own designing mom, lori. i just think that digital cards have a big roll in the future (and already play a big roll right now - almost every christmas card or baby announcement i get is a digital photo card from an online store). they are easy, low cost, and customizable.
another change in stationery that i have noticed (which maybe isn't that big of a change - just more noticeable in a recession) is that my handmade line still sells quite a few birthday, wedding, and baby, but sales are way down on everyday or "just because" cards. i have had a theory for a while that people will always be more apt to buy cards that they "need" rather than to send a card just for fun. and even in tough times, people still have birthdays, babies, and weddings. and we want to still celebrate those special occasions.
there is no doubt that creative businesses have taken a huge blow during the recession. everyone i talk to has a story. some are just heartbreaking and that cannot be denied. but others are about re-examining their business and personal goals in life and making necessary changes.
so my advice to someone who wants to start a business in this economic time is to go for it. why not? there is never the perfect time to start a creative business. so why not now while your ideas are fresh and you have a real passion for it? as long as you don't risk more than you think you can afford to loose, why not take a chance on yourself?
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