How to Beat the Odds in a Recession

Economic upheavals produce worries through the business world — follow these tips for finding new niches.
Nov 21, 2008

By Steven Batts, Contributing Writer

Well, it looks like it is finally here. After months of speculation of whether we are or aren’t, we are officially in an economic recession. This is not all bad news. It is a little-known fact that when markets go down in one area they tend to go up in others. A good example of this is the building industry. When new homes starts go down, remodeling jobs go up. I know a few contractors in my area who are currently swamped with remodeling jobs.

The same can be true for embroiderers. You just have to know where to look for the work.

For instance, local offices of large corporations might normally receive embroidered items from a corporate supply source. When things get tight, the home office may cut back on these things, which, in turn, might mean the local office is looking for embroidered goods from an area business.

Another scenario is when companies won’t be able to give the big bonuses at the end of the year. What they may do instead is give embroidered gifts to try and smooth things over. Of course, if you have ever been on the receiving end of this, you know it really does make up for it, but for an embroiderer, we’ll suffer through it. The key is to be that embroiderer they call when the need arises.

The embroidery industry has always relied on word of mouth advertising. It is no different today. In fact, it is probably even more so as embroidery becomes largely a cottage industry. What you need to do is spread the word.

Network
The technical name for word of mouth advertising is called networking. To increase sales, you have to increase the size of your network. Your network is people you know. It may be family members, friends, people you go to church with or do business with. People that you do business with are good prospects to become customers. If you are spending money with a company, it should be fair for you to ask for their business in return. You won’t always get it, but it is another resource.

A great way to expand your network is by joining clubs or organizations. Your local Chamber of Commerce or Merchants Association is a good way to get exposure and meet new people. They also may give you access to “referral groups.” These are groups of professionals that network to refer business to one another.

This concept of meeting with other professionals for the sole purpose of selling and referring business to one another really can work for you. I belong to a referral group through Business Network International (BNI), which is the largest organization of its type. It has really been a boost to my business in a couple of ways. One, of course, is the referrals I received from other businesses. The second is that it forces me to focus on promoting my business and think about what type of business I would like work with. That is important to your business anyway. You need to set aside time to not just work in your business but on your business. To make network marketing work means you have to work. To succeed in tough economic times you to outwork your competition by getting your name out there more. That way when a business looks at embroidered items for their employees, they think of you.

Five Years and Counting
There's more to running an embroidery business than knowing embroidery. If you want your business to flourish — especially during hard economic times — you need to take stock of why you started the business in the first place.

Though I've been involved in the embroidery industry for more than 17 years now, I've only been an embroidery business shop owner for just over five years — a significant anniversary for me. Statistics show us that a high percentage of small businesses close their doors within the first five years, so by making it to the five-year mark, I have, if nothing else, beaten the odds.

Looking back over the past five years to where I am now, I've tried to analyze what got me here. Hopefully, through this analysis, some other small business owner can learn from both the things I was able to accomplish as well as the mistakes I made along the way.

9-to-5 Job Security
First, let’s look at why many businesses close. Notice I did not say fail. While most businesses close due to financial problems or other issues, some businesses just close because the business owner decided to sell the business or just got tired of running it.
It's easy to see how that can happen. The daily pressure of not getting a paycheck unless you generate revenue, no matter how hard you work, can really wear on you. The additional pressures of paying taxes, doing paperwork and performing all the non-revenue producing jobs that a small business owner must do adds to the wear and tear. Sometimes you think it would be simpler to go back to work for someone else and let him worry about all these hassles.

And indeed, there's something to be said about the security of a regular 9-to-5 job. Your hours are more clearly defined; someone else does the paperwork; and you get paid the same every day, including vacation days. In addition, the biggest advantage is that there's a clear distinction between your work life and home life.

Look before You Leap
Whether you're just starting or contemplating starting your own decorated apparel business, here are some of the things I advise you to consider before you take the leap. Be absolutely sure this is what you want to be doing. Consider your motives for starting the business, as you will need to call those to mind during the stressful times that lie ahead. Keeping that focus will help you weather those storms.

Think about your goals. What do you want to accomplish from having your own business? Is it a livelihood, supplementary income, something beside material wealth or a combination? For example, I wanted to support my family while exercising more control over my schedule and the direction of my future.

Remember that there is really no such thing as a "regular 9-to-5 job." If there is, let me know, and I might apply for it. In reality, I used to work long hours, too, back when I had "a real job."

Just because you're good at something, doesn't mean you're good at running a business doing that same thing. If you're thinking of starting a business just because you're good at what you do, then don't! I was good at embroidery when I started, but that is not why I started the business. Knowing embroidery is a plus, but it doesn't help me grow my business.

If you want your business to flourish, you need to become good at business. I'm still working on that part. Having made it so far, I might get the business part figured out in the end.

Steven Batts, a 14-year veteran of the embroidery industry, is a regular speaker at the Imprinted Sportswear Shows. He owns Righteous Threads Embroidery, Greensboro, N.C., which offers digitizing, embroidery, machine maintenance and repair, and consulting. Call him at (336) 379-9380 or e-mail righteousthreads@gmail.com.