From the age of 19 to 32, I was a newspaper reporter and then a radio presenter. And at times I was 100% guilty of doing what the media is doing here in the UK today.
They're doing this:
Panic! Interest rates up! Inflation! Recession! Cost of living crisis! Doom! Destruction! Your cat will die!
You've probably seen similar coverage where you are. When I was in the US last week, there was lots of talk of recession and "hard times".
Because I've reset my brain after 16 years as a business owner, I can now see this for what it really is.
It's not reporting the news. It's leveraging people's fear.
Why would the media do this? Because it gets more eyeballs. At a deep psychological level, bad news is more attractive to humans than good news. We give more attention to what we fear.
The problem is this huge media attention causes people's behaviours to change. And that actually creates more problems than the weak economy does!
When people are scared, they make stupid decisions. As a business owner and leader, you must be very careful not to do this.
I'm not scared of a recession or weak economy. In fact, I'm kinda excited about it. Because I know I'm going to have tons more opportunities and grow my business faster than my competitors.
You should be excited about the recession too 😃
"Huh... Paul.... did you really just write that?"
I did. Let me break down my thinking about the current world financial situation and how it affects MSPs - in 5 simple paragraphs (number 5 is my favourite).
1) All countries with a market economy go in and out of recession all the time. It's no biggie. It's just part of the cycle.
2) A recession doesn't mean the world will end. It just means the growth line is pointing down a bit, compared to normally pointing up a bit. No-one's pushing a wheelbarrow full of coins to the shops to buy a loaf of bread. Obsessively talking about a recession does more damage than the recession itself.
3) Yes you will probably lose a client who goes bust. You'll definitely lose some seats as your clients trim the fat. Don't obsess, don't panic. Take action. See number 5.
4) In the event you are forced to do something bad like reduce your staff or even close your business, there's an 80% chance this was going to happen anyway. The weak economy was just the straw that broke the camel's back. If this does happen I genuinely feel for you (and will give you a big man hug with a back slap if we meet). But there's good news! You're in the world's most dynamic sector and you have a ton of very bankable technical skills. Take a little time off, lick your wounds, get over it and get back in the game. Nothing is ever as bad as it seems at the time.
5) A weak economy is the BEST time to grow your business. Because:
- Existing clients will keep spending more so long as they can see the value
- Other businesses will still switch from one MSP to another. They still need and want what you do. In fact, more will switch in a recession than when times are good. And they won't just be looking to cut costs (some will but most won't)
- At the same time, your competitors will draw back. Be more cautious. Reduce their marketing. Do less activity
And this is NUTS! The best thing you can do in a weak economy is to do MORE marketing and MORE activity. MORE MORE MORE. Sure, spend your money wisely, but success comes from MORE ACTION.
There are plenty of examples of businesses that have done very well in previous recessions (there's a proactive and successful MSP group at the top of this list)
TLDR: This is a great time to out-manoeuvre your fat, slow, and scaredy cat competitors. But you need to take action now.
PS Next week I'm going to do something special with the 700 members of my MSP Marketing Edge to make sure they recession-proof their MSP (details TBC).
Do you think I should do something for the wider MSP community as well?