World over, recessions have presented a weird and different kind opportunity for a new crop of wealthy citizens to emerge. So while many suffer losses, others are either find ways to save to make a big come-back along with the economy or key into what has been referred to as “recession-proof” ventures. In Greece in 2009, many small business survived and got rich during the hard times by providing unique solutions within the tourism sector. So while the government was battling an extreme debt crisis and many citizens were losing their jobs and protesting, a few Greek businesses looked inward and capitalised on the fact that tourists kept touring.
This class of people have been termed “survivalist entrepreneurs”. They enter into the game with what most will call little know-how but with plenty of foresight to make up for this. Chloe Servino once wrote that 7 of the 25 richest American families made their way up during the worst economic crash in the country’s history. So what do these mavericks do?
They become self employed
One of the first patent indications of a recession is the loss of jobs and that goes along with the general inability to secure new jobs. The Trade Union Congress just said that over four million jobs have been lost in less than one and a half years. So unemployment is high but so is self-employment.
Of course not every start-up will make it through the harsh times but those who do; do so amazingly. The survivalists are the ones who key into businesses that require the lowest capital to start while providing services or goods that people may lament but cannot do without. Think about those people with the insane drive regardless of their lack of education and particularly exceptional ‘talents’.
While many will be lurking around big multi-national companies with no vacancies and high expectations in terms of skill-set, the survivalists will be slowly amassing their wealth by pouring all the energy they can afford into growing their own small businesses. It won’t look like it, but by the time the recession is over, they would have gained the consumer base and brand equity that will set that them apart as household names.
They invest in food
The food industry never gets really hit in hard times. It’s simple, people will always eat. The moment the food industry gets hit, then we can all agree it’s the end. The real end. The one where the Marxists say we all start to eat one another. But even then, it means the people who can invest and deal in human flesh will still be winning.
Seriously though, food always sells. However in Nigeria that may not be true for food businesses that haven’t found the creative alternatives to importation. Be it of rice, take-away packs, condiments et cetera. Home grown, locally sourced produce is definitely the way for food business owners now. People are cutting down on spending and food usually goes first despite the fact that it is indispensable. So people are taking off over-priced restaurants and food chains from their expenditure and looking for cheap alternatives.
The winners are those who can revolutionise local recipes to cut costs and inform people’s demands. Double points if they can give their products export quality.
They figure out where the future is
Some of the survivalists are not going to be making their money right away because it will all be tied into industries that are about to boom. From all indications, oil and gas is not exactly where the future is headed.
In July, Vanguard reported that Forte Oil share prices plunged along with Conoil and MRS Oil’s too. The report showed that Forte Oil’s investment value declined from N429.8 billion in 2015 to N247.9 billion by the end of June 2016. This means Femi Otedola’s net value in the business went down by N181.9 billion. Mr. Otedola probably was not badly hit but a new investor would have.
Even the oil and gas tycoons are looking outwards. The secret is to check the trends and see areas the government is diversifying the economy into or what capital infrastructures the government is truly pursuing. Right now, it appears that the FG is very keen on the technological landscape, transportation, alternative energy sources and manufacturing too.
The new crop of billionaires that will emerge with the restoration of economic boom are likely already developing solutions that will meet the demands of both government and citizens. With a boom in new sectors, new kinds of services will be required and it is the first set of investors that will be King. They will also enjoy the added benefits of concessions that will be granted to ease business in those sectors.
Bill Hewlett and Dave Packard started what we now know today as the computer manufacturing giant, HP in 1939 during the Depression with less than $600. They worked out of a rented garage.
Right now is when the new crop of rich people are scurrying around testing business models, making their mistakes, conquering grounds on financial quarter after the other; unknown to the rest of us. It is the perfect time to sneak their service on us, whether they choose to offer it or not. But they definitely will be our suppliers (whatever they are selling), the moment we get our cash flows back.