Mike Michalowicz

President

Obsidian Launch

www.mikemichalowicz.com

MIKE MICHALOWICZ (pronounced mi-CAL-o-wits) started his first business at the age of 24, moving his young family to the only safe place he could afford – a retirement village. With no experience, no contacts and no savings he systematically bootstrapped a multi-million dollar business. Then he did it again. And again.

His experience building three multi-million dollar companies fostered a philosophy rarely taught to entrepreneurs: the lack of money, experience and resources is, in fact, your greatest asset.

Mike is the president of a behavioral web optimization firm, Obsidian Launch; is the small business columnist for The Wall Street Journal; is a frequent television guest; is a keynote speaker on entrepreneurship; and is the author of cult classic book, The Toilet Paper Entrepreneur. He is currently writing his second book, to be released in 2012 by Portfolio, an imprint of the Penguin Group.

Since spending is no longer derigueur and frugality is now fashionable, enticing people to spend money on your business can be tough. In order to make the right changes you have to look at consumer spending in the post Great-Recession years and prepare to tailor your business accordingly. Before 2007, most Americans enjoyed the carefree world of spending on the never-never; consumer spending even grew 8.2 percent between 2003 and 2006 and businesses prospered. As the recession deepened in 2008 people stayed home more, shopped frugally and drove less. Many of the biggest changes were made by the middle class earners ($40K –$60K). According to a Pew Research Study, “71 percent of Americans reported buying less expensive brands to save money.” Consumers traded credit cards for cash and sought out a simpler life focusing on family and friends rather than material goods. Today’s consumer is now more concerned with value than price and the number of people shopping online has doubled since 2009.  But the way people spend is where the problem lies because spending on services is necessary for job creation. According to Connor Dougherty in online.wsj.com, since the second quarter of 2009, spending on services has grown a mere 2.8 percent compared with 9.1 percent spent on goods. As the economy picks up, businesses should be poised to benefit from the upturn. Although some habits acquired during the recession will last a lifetime, a study by Booz and Company predicted that consumers will quickly return to paying for items and services they value most: leisure, shopping and driving. Businesses must incorporate value into their products and services and connect with the new customer mindset. A blog.euromonitor.com article recommends localization and positive marketing that highlights quality and value; shrewd use of the internet and the ability to respond to social concerns and a sense of tradition. To turn this trend into an advantage for your business, consider the following. Embrace austerity yourself. Austerity means focus. Focused businesses grow. Focus on the right core offering. Lastly, austerity means cutting bad clients. Let go of the dead weight and watch your business take off.