Success In A Downturn

Business history teaches us that a downturn is not necessarily detrimental to your business. A good business model will always find ways to survive and thrive. In some cases, it is the best opportunity your business would ever have. Here are examples of companies that made it during downturns:

• 1837: Procter and Gamble is born to provide household supplies. It scores lucrative contracts with the Union Army during the Civil War. P&G uses a similar technique during the Great Depression and instead of cutting back on marketing, it starts spending heavily, especially on radio and TV (hence the term Soap Opera).


• 1875: Heinz Co. is forced to temporarily close down following a banking crisis. Within three months, the company convinced employees to come back and delay wages. Heinz also renegotiated contracts and dropped lease payments. Then by leveraging ketchup, the company got back on its feet.


• Banker’s Panic of 1907: GM is born and revolutionizes the card manufacturing industry. It succeeded by opportunistically acquiring companies during the panic.


• Great Depression: Born during the 1875 depression, IBM started spending, hiring and innovating. When President Roosevelt signs the Social Security Act, there is suddenly a heavy need for IBM machines to help process data (punch cards).


• Oil crisis, 1973: Important documents needed to reach their destination within 2 business days. When oil prices dropped in 1975, FedEx was still standing and experienced tremendous quick growth.