28 December 2018

The challenge of our days: From abundance to scarcity


Reading the article by Andrés Pérez, entitled ” It’s just that I do not see myself ” and remembering the many conversations with friends and business owners who often talk about those times that once were and are not going to come back, I could stop thinking about that phrase ‘It’s just that I do not see myself’.

It’s something like ‘is that I do not adapt to this new situation in which I earn much less money than I was earning before’, is that I do not see myself working more hours than before.

But if you count among those who can not be seen, the situation is very clear: We come from living in a market of abundance to find ourselves now in a shortage market.

Why is it so hard for us to adapt to this new situation?

But, what has happened? Why is it so hard to start again, adapt to the change? Why does it happen that, more and more, companies and companies close and take with them ideas that could be successful?

The great problem that poses for business owners having lived in abundance, in a market where the demand for products is greater than the supply, is that, unfortunately, they became accustomed to being passive, to be ‘order takers’ and they left aside the development and cultivation of one of the fundamental activities of every company: the development of business, the search for order, the sale of door to door.

The problems that abundance generates.

Surely you are asking yourself: But how can wealth generate problems? Yes, there are habits that develop during abundance that become real problems during scarcity. I will try to list those that, for me, are obvious:

  • Clients abound and look for you: so you do not care too much about losing one or the other, because you know that in ten minutes someone will appear by the door and buy you. During the abundance, loyalty is little importance and efforts are focused on attracting customers.
  • The prices are established by you and not the market: since customers abound, you can afford to raise the price at will, because someone will always appear to whom the product likes enough to pay the price you ask for. The direct relationship that exists between supply and demand, as it is not very fashionable when customers abound.
  • The money is enough to do the things you want: even those you do not need or need. You do advertising without worry, you maintain a bigger inventory than you need because you know you are going to place it, you get into accounts, credits, purchases of assets, anyway … there is money left, why worry?
  • You spend a lot and you save little: You never thought (and if you thought about it, you did not give it importance) that abundance does not last forever and that everything that goes up has to come down. If you look at nature, during certain times of the year, animals keep food, nuts, seeds, for winter, knowing that the food will be hard to find. However, the human being when he has enough, wastes and does not save for the future.

The great challenges posed by scarcity.

However, the squeeze comes, sales go down, the economy gets depressed, money does not reach, and then the problems begin. Why is it so difficult to adapt to scarcity? We begin because:

  • You have to go out to the street to look for your customers, the fearsome cold door, which should always be part of your plan, becomes your only ally, and now you realize that you did not prepare at any time to go looking for your customers, but you concentrated on ‘take your orders’.
  • The price war is killing you, because you were used to having control of the price and you built your business based on a high profit margin, maybe, too high for what the market could really afford. It is now when you see with perfect clarity that supply and demand are intimately linked with price.
  • You urgently need to have cash flow, but now you find that banks are not lending money, customers do not buy regularly as they did before, your sales projections (if you do) are not fulfilled and you simply go with the day a day.

What do we have to do now? What do you have to do in your company? We have to start by understanding that our problem is that we are in a different environment where there is no money or customers in abundance as before.

It is necessary to leave the passivity to turn it into proactivity, to leave the desk and go out, to stop being ‘takers’ to be ‘developers’ “of orders, of new clients. If before you did not see yourself doing it, then it is time and priority.

Others do it, why do not you?