This post was guest blogged by Allen Young, a real estate entrepreneur who’s living the dream.
Whatever business you are in, there will come a time you will have to do all you can to just survive. These will be anxious times for you, but if you can survive, you will likely thrive. There is a saying that “What does not kill you will make you stronger”. This applies in the business world as well. If you can survive, you will be stronger, and wealthier. So, how do you survive? Let’s look at two successful entrepreneurs as an example of how to survive so our businesses can thrive.
How to Survive: John Chow and Donald Trump
Surviving means doing whatever you need to do to get by. It may mean working longer hours, cutting expenses to a minimum, or taking on another job temporarily. Take John Chow for example. In 2001, the Dot Com boom came to an abrupt end. The tragic events of 9-11 added to a gloomy economic outlook and worldwide tension. It was not a good time to be in the Internet business. For John Chow it meant that his advertising revenue all but dried up. With his income declining, John had to make drastic changes to his lifestyle such as cutting back on his love of fine dining. John was almost desperate enough to take a regular 9-5 job. The Dot Com party was over.
In 1992 the situation was even worse for Donald Trump. The United States was headed for a recession, and the housing market was in crisis. Trump was over 900 million dollars in debt. As he passed a homeless person on the streets of New York, he remarked that the homeless person had a higher net worth than him because the homeless person had some coins in a cup, while Trump was over 900 million dollars in debt. How did these two entrepreneurs survive these tough times?
John Chow kept working and surviving. While many people and companies in the tech industry simply quit, John kept working and planning. By keeping his expenses low and using cash reserves he wisely accumulated during the boom times, John was able to survive and take advantage of new opportunities others could not. The turning point came in 2003 when Google Adsense was introduced. With Adsense, Google was able to bring the Internet back to life. Guess who was there to take advantage of Adsense? With net advertising rising again, John was soon able to surpass the advertising peak he reached in 2000. John was now able to thrive in his business because he was able to survive.
Likewise Donald Trump had to survive the housing crisis in 1992. Trump’s goal during this time was to survive until 1995. Trump knew that if he could survive the tough times, he would make a lot of money when the housing market rebounded. Like John Chow, Trump did all he could to survive by renegotiating terms with his lenders so he could keep his projects going. Also like John Chow, Trump remained positive and forward looking. Instead of dwelling on his current situation, Trump continued to work on planting the seeds of his future business growth by continuing to make deals even though he was already heavy in debt. By continuing to make deals, Trump accomplished two things. First, he was able to set the groundwork for future success. Secondly, making deals made him feel excited and energized. That excitement made him feel good and positive, and pushed him to keep going. Trump was able to survive until 1995, and the United States housing boom began. Guess who was there to take advantage? Like John Chow, Trump survived and now both thrive like never before.
How To Thrive
It is now 2008, and both, and John Chow and Donald Trump are both at the top of their games. John Chow now makes over $30,000 a month from his blog alone, while Trump’s real estate empire continues to grow as well as success from his reality show, The Apprentice. What do they do now when they are thriving?
The events of 2001 -2005 illustrate that nothing lasts for ever, good times or bad. What goes up will go down and vice versa. Donald Trump knows that because he also survived another real estate downturn in the 80’s. When times are good, it is time to plan for the down times that will eventually come. Here are some things to do in boom times.
- Diversify: John Chow has diversified his blog income among many revenue sources (like TTZ Media), so he is not affected so much when one source such as Adsense dries up. Likewise, Donald Trump’s business interest is now well diversified among many industries and businesses, such as reality TV, and casinos.
- Look for new opportunities for your business: In 2001, no one had heard of such now common phrases as Google adsense, affiliate marketing, and reality TV. Yet, both Chow and Trump were among the first to spot these trends and take advantage. Keep you eyes open as well.
- Accumulate Cash: As I noted good times do not last forever. So, keeping a healthy supply of cash on hand to help survive the lean times is prudent. Don’t spend all your money during the boom times.
What will 2008 bring? Will there be a Dot Com Crash 2.0 or another housing crisis? I don’t know, but no doubt many will thrive in any situation, and others will need to survive. Whatever situation your business is in, follow the examples of John Chow, and Donald Trump. Stay positive and plan to thrive in the future, even as you are trying to just survive.