With levels of personal debt at all time highs, plus the falls in home equity values, feelings of insecurity during this recession are likely to be even stronger than usual.
That usually sends people into ‘survival’ mode, which is the worst mode to be in.
How to prepare yourself to survive a recession
Make yourself independent of your employer by developing, improving or reviving some personal skill that you can sell to others and, thereby, start your own business.
We all have some personal knowledge or experience that would be useful to others.
Even if you’ve been employed in the corporate world all your working lives, you’ll still have developed knowledge and expertise that you can provide to others on a consultancy or freelance basis.
- If you’ve been an administrative assistant you could use your MS Office skills to offer copy-typing or Resume production services to others on a freelance basis. In fact any kind of document production service, but resumes are usually in demand during recessions.
- If you’ve been in marketing or sales you could offer your services to small businesses on a commission only basis. This gives you the opportunity to provide marketing or sales services for 2 or 3 different businesses at the same time, if necessary.
- If you’ve been working in IT or on maintaining the company website you could offer website design services to small off line businesses. I wrote a separate article on this subject a while ago.
The trick is to identify what services you could provide to others. And if you can’t identify any then take the opportunity now, before hard times hit, to develop some skills and knowledge that you could provide professionally.
What if you have limited funds?
Mike Dillard has just launched a website about how to build a business on a budget. One of his key messages is that if you have a limited budget then spend it on something that gives you leverage, such as acquiring knowledge.
Once you have knowledge no one can take it away from you.
There are other advantages to acquiring new knowledge too.
I said earlier that you should make yourself independent of your employer. That does not mean or imply that you should leave your employer.
It means putting yourself into a position so that if your employer downsizes you you’re not left without options.
Acquiring extra knowledge may be useful to your employer, which would make you more valuable to them and increase your chances of avoiding the chop.
And you’ll always have the opportunity of turning it into a business of your own if you choose.
Take a skills inventory
So what skills do you have and what skills do you need in order to sell your services as a freelance or contractor..?
- If you have good technical skills you may need to check out a marketing and selling course so you can sell yourself and your offering more effectively.
- You may need to study some books on consultancy so you’re better prepared for writing proposals and reports.
- You may need to identify a potential business partner whose skills complement yours. For example, I’m teaming up with someone who has much stronger technical skills than I do. But the balance of his technical skills and my marketing and writing skills enables the two of us to provide a very rounded offer.
Identify the skills you have and identify the skills you would need in order to provide services on a freelance basis, and make sure you’re fully prepared.
5 steps to preparing for a recession
- Identify the particular skills or experience you have that you could provide to others on a freelance basis.
- Identify who would want to use the skills you have, and how to let them know about the services you can provide.
- Identify your strengths and weaknesses. Do what you need to do to strengthen your weak areas.
- If necessary, identify who you could team up with to make your offering stronger – someone whose strengths complement yours. Be sure to work out a very clear agreement as to how you’ll work together in order to avoid disputes later.
- Put together a plan that you can implement quickly in the event you’re laid off.
If you do go independent you’ll need to report any income you earn from your independent work to the tax authorities, so be sure to keep records of your income and expenses right from the start, because trying to pull them together later will be a long and thankless task.
And if you don’t go independent you’ll have made yourself even more valuable to your employer, which will be to your benefit too.
Who knows – this recession could be the best thing that happened to you!
Updated – 8th October, 2008.
I originally wrote this post back in March of 2008.
I know a lot of people are hurting right now and I know how you must feel – I was caught up in the telecom meltdown in 2000/2001 and I nearly lost everything.
The point I made above about acquiring knowledge seems to me to be even more important now. It’s a way of making yourself marketable which, in turn, gives you more security.
To that end, if you’re thinking about working online, or if you’ve just started working online, there are well over 300 articles on this site that provide tips, techniques and tutorials on setting up and running an online business.
Plus, you may want to check out this free, 65-page eBook on how to start an online business.