Being naturally optimistic, I always try to turn bad situations into new opportunities. Our still-faltering economy may be dragging down business, but there are ways for small businesses to take advantage of the economic downturn. Here are a few:

• Landlords may be willing to make deal and offer short-term leases. The Wall Street Journal reports that a new trend has started in retailing: the pop-up store. These stores operate with a short-term test lease to determine their feasibility. Creating low-risk leases enables more entrepreneurs the opportunity to start small-business retailing.
• Start a business, and start making money. With many businesses unwilling to hire new employees in this uncertain economy, “accidental entrepreneurs” are being born. A USA Today story shows that 25% of workers laid off in the last six months are considering starting a business instead of finding a new job. Businesses still need work done, so they are increasingly turning to outside resources (that has certainly been my experience).
• On the flip side of unemployment, if your business is looking to hire, you have great options right now. You need to maximize this opportunity. Make sure not to rush hiring decisions- conduct enough interviews to find the right person for the job who will fit with your culture.
• If you have the cash to ramp up your advertising, you can buy more for your buck. For example, one of my clients is in an industry where pay per click (PPC) advertising has completely dried up. Now we can advertise with little competition and a much smaller budget. There may be fewer customers than before, but we are reaching almost all of them.
• If this economy is leaving you with too much extra time, put it to good use. Take my small business marketing test to find your weak areas. When your business is booming, it’s hard to find time to plan for the future. If you work on your business strategy now, your business can come back stronger than it’s ever been.

Has your business developed any opportunities as a result of the recession? Please share!

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This article isn’t a horror story, though. There’s good news. According to author Dan Ariely, your customers (and everyone else, too) are Predictably Irrational. In his 2008 book, Ariely explores the field of behavioral economics, what motivates us, what influences our decisions and how this fits into our marketplace and world.

In the very first chapter, Ariely provides real, solid business advice that you can start using today. I’ll give you a teaser: You can increase sales of your high-margin products by offering a similar product that is clearly a worse choice. Ariely’s research shows that people are compelled to compare and prefer to compare similar choices.

For example, let’s say you are picking out a family dog, and you want a King Charles Cavalier Spaniel. You don’t know if you want a boy or girl, though. There are three puppies to choose from, two male and one female. One of the males and the female are friendly with your kids, healthy and romp around playfully. The other male growls and has a runny nose. Probability says you’ll choose the healthy, friendly male puppy. Ariely posits this choice is because it’s easier to compare two male dogs than a male dog and a female dog. Since the healthy, friendly male puppy is clearly better for your family than the grumpy, sick male puppy, the first male puppy starts to look like the overall superior choice. (Don’t worry. No puppies were harmed in the making of this example. The sick puppy went to the vet and is all better now.)

For the full research behind the tip and to gain an interesting, entertaining and better understanding of how economics works and affects your life, go buy–and read!– Predictably Irrational. Your business will thank you.

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