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3 tips to navigate your business through a recession

3 tips to navigate your business through a recession
WITH SMAI FounderS, Homa & LILY Alenaddaf

With SMAI now celebrating 35 years in business, founders Homa & Lilly Alenaddaf have been required to navigate the business through two recent recessions – the Global Financial Crisis of 2007 (GFC) and the current challenges of the COVID-19 induced recession. 2020 hasn’t been a year with a lot to celebrate. With uncertain sentiment abound, it can be difficult to stop and take stock of the positives that are keeping us moving forward and motivated.

We asked Homa & Lilly what strategies they employed in 2007, and if those lessons they learned are still relevant in todays business environment.

The fitness & martial arts industry responds well to post-diSaster periods

 

Generally speaking, recessions usually last for 11 months on average, with most economies returning to pre-recession levels of output within 2 to 3 years. Whilst there is no guarantee of a rapid recovery, the Australian economy is forecasted to be highly resilient and bounce back strong, backed by proactive government stimulus to support spending.

When it comes to the Martial Arts industry, if there is anything that we learnt from the 2007 GFC, it is that the fitness and martial arts industry responds well to post-disaster periods and this one is not looking any different. Through our network of gym and dojo owner customers, we saw in 2007 a quick rebound of students returning to martial arts classes and gyms. As a business, we have had our fair share of ups and downs since 1985, but we’ve definitely noticed that when times are tough for Australians, whether it be recessions, war or natural disasters, it’s that a lot of people turn their focus to mental health and overall wellbeing. We see through the demand from our customers that people are achieving this through fitness training as well as looking to martial arts to build fitness and mental health resilience.  

As business owners, it’s also important that we focus on this ourselves to withstand pressure from a recession. Here’s what we learnt from the last recession.

  • Focus on mindset and positivity, don’t dwell in the problems
    It can be very easy to get caught up in all the negative news surrounding us. Make sure to take care of your own mental health and wellbeing. This is not just the type of empty mindfulness often sold to us by celebrities or influencers. In practice, this means to shift focus to solving problems that are within your control. If you can only see negative outcomes, that’s all you get.
    Finally, start accepting that there is going to be ups and downs in your life. Remember the age old phrase “appreciate the smaller things in life” – well now is the time to apply it.
  • Always have a dreamer
    In every successful business there are 3 key roles; the worker, the manager and the dreamer. The dreamer is crucial for the business to keep pushing forward, to grow and to come up with new ways of doing things. If you have found yourself falling back into the manager/worker role recently and have gotten caught up in mundane tasks, it’s time to take a step back and remember to dream. Where do you see the business in 1 year? 5 years? 35 years? Use your dreamer (or the dreamer side of your personality) to build confidence and aspiration within your business.
  • Change with the times, and move quickly
    We have seen so many businesses pivot their strategies and embrace digital during and beyond the lockdowns. People are now hunting for their ‘new essentials’, so make sure to position your offering in a way that is essential to their lives. If people have been struggling with the lack of social interaction, market your group classes as a way to get fit while having a laugh and engaging with other members. If kids in the community are struggling with the effects of lockdown, highlight your programs that build resilience and confidence.

Whilst the recent trend of Australians have been to set up home gyms, the majority of people will miss the social environments of a commercial gym. In 2021 we expect to see a return to participation in gyms and martial arts club. We have already seen so much innovation and resilience within our industry so far, and have no doubt this will propel our industry into the future.

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