It is no surprise that there are some concerns about short term economic health of the world. The stock markets are down. Energy costs are soaring. Inflation rates are the highest in decades. And the news media loves to tell you about it 24/7 because it will capture your clicks, eyeballs and ear holes. I’ve also begun to hear the murmurings of layoffs and downsizing.
No doubt you have heard all of this and perhaps even wondered, “What is going to happen to me and my creative business?” If that rings true, my message is for you.
I’ve Been Through Two Major Economic Downturns
In 2002 I started freelancing during an economic downturn. I had been working at Fox Studios in LA. Fox had sold our divisions to Disney who began integrating the assets into their business and laying off the Fox team members. During the same window of time, the tragedies of September 11th occurred and the “dot-com” bubble burst causing the stock market to tumble and business to begin tighten the purse strings.
I had never been more qualified in all my life. I had a great portfolio, multiple creative director positions on my resume (including my recent position at Fox) and yet I couldn’t get a job. It seemed everyone was downsizing and not upsizing. I was miserable, scared and sad.
Fortunately, I had friends working at other Hollywood studios. With no budgets to hire internally, they began outsourcing work to freelancers and agencies and I started to get unsolicited requests for project after project. This transitioned to me working full-time as a freelancer which in turn became my agency.
Without an economic downturn I would have landed a job somewhere and never built my agency (one of the greatest achievements of my life). In hindsight, I am so grateful for the economic downturn of 2001-2002 that led me to building my business.
The other economic downturn I endured happened in 2008. My agency growth had soared to over seven figures. I had ten employees. We were doing six figure projects and demand had never been higher. Then “poof” in October 2008 it was like someone turned off the faucet. The phone stopped ringing. The requests disappeared. The stock market plummeted and I began hemorrhaging money as I kept my team employed while I waited for things to turnaround. After six months of waiting, financially I could no longer sustain my team size without destroying the future of my business and I had to lay off some of my friends. I cried that day.
In contrast to the 2002 economic downturn, in 2008 it seemed that our clients retained their internal teams and stopped outsourcing causing my agency to feel the impact.
In 2002, the economic downturn was an AMAZING time to start my journey as a creative entrepreneur.
In 2008, the economic downturn was challenging, financially damaging and stressful.
What Will Happen This Time?
With all of the economic factors at play right now, it is pretty safe to say that “something” is going to happen. The questions we don’t have answers to are, “Will an economic downturn be good for creative entrepreneurs or will it be bad?”
I want to highlight to you that an economic downturn could be GOOD for your business. It was good for me in 2002. It doesn’t mean it won’t be scary and it doesn’t mean it won’t impact people you care about, but there is no doubt that an economic downturn could easily create:
- an increase in outsourcing to external freelancers and agencies
- clients being forced to spend more money to market their businesses
- new creative strategies to stretch marketing budgets
- innovative new marketing channels
- a wave of new startup businesses (all of which will need product design, branding and marketing)
All of these things could create a perfect opportunity for solo-freelancers and creative agencies to thrive in the coming years.
I’m going to wrap up this message with a few points for you to consider as hear the fear-mongering media tell you the economic sky is falling.
Remote Work Has Never Been More Legit
Call me optimistic, but I really believe that the coming years will be amazing for creative entrepreneurs. Coming out of the “work from home” pandemic, the acceptability for outsourcing to remote workers has never been higher. It really doesn’t matter where you live and where you work. Businesses don’t care about your “cool office space” nearly like they used to. Your home office is just fine and does not disqualify you from opportunities.
There Is Nothing You Can Do About It
Yes, you should try to have some money saved up. Sure, you should prepare as best you can. However, if the economy continues to struggle and takes a turn for the worse, there is nothing you can really do about it. You will have to endure it the same as everyone else. We are all in it together and we will all get through it.
Three Months At a Time
“Three months” is my magic time horizon. Most of us can look ahead three months and have a pretty good assessment of what our lives and businesses will be facing. Beyond three months, who knows? Disaster could strike. Or we could land our greatest project of all time. We just don’t know. So don’t worry about it. The future will take care of itself. Don’t let yourself be afraid of any unknown future that is further than three months from today.
You Will Grow From It
You may be thinking, “What if Mike is wrong and an economic downturn is a disaster for me?” If that is the case, so be it. You will grow from it. You will learn from it. You will build stress tolerance and wisdom from it. And if it eats away all the money you ever saved? Well, you’ll make more money in the future. Most of us have a long work window and this will be just a “blip” in the career ahead of you.
Good Economic Years Exceed Bad Economic Years
Did you know that the stock market has a positive return 74% of the years. I’ll take those odds any day of the week. All signs point to this year being a down year, which means the likelihood of next year being an economically positive year are even higher. And if next year includes a struggling economy, then the year after that could be hugely positive. Trust the data. Positive years outweigh negative years by a landslide.
Just a final thought and to reemphasize the main point of this article. A down economy doesn’t alway mean a down you. Like it was for me in 2002, an economic downturn today could become the perfect opportunity for you to start a creative business and usher in a few years of amazing opportunities and financial wins. I believe it will.