Today, I want to share with you a little bit about the K-shaped recovery… not K for ‘KK,’ although I would love it lol.
But instead, “K” is a shape that personifies the economic predictor of how you will continue to grow and thrive, or you’ll continue to struggle and maybe go away. Now, this is a very controversial topic, but I think it’s important to address as we look at a new world, a new era of being an entrepreneur or being a creator and I think it’s incredibly important that you consider where you are in the economic climate. So first let me define what a K-shaped recovery is. Although it’s often considered after a recession or a depression, I think a K-shaped recovery can happen at any time, depending on many different economic factors. The number one thing I want to focus on is what happens to those at the top and what happens to everyone else.
The definition of a K-shaped recovery
The definition of a K-shaped recovery is that there are certain areas, sectors, industries and areas of the economy that are going to persistently lag, those are those at the bottom, and those that will recover and thrive. Which one do you want to be? You see, I really believe whether you’re a creator that works digitally or a brick and mortar business owner, there’s something very important happening in the world right now that deserves your attention and it’s defining and also creating a path for your economic success. This is where I always say, “I believe the best will survive and thrive,” and we’re seeing it more and more.
For me, I work with the best of the best and that is regardless of size of business. So that means I have seen clients really make the most out of current economic conditions. They have doubled down. They have invested in the business and in resources. They’ve proven that investing in certain aspects of the business, whether it’s staff, advertising, content, copywriting, website or any aspect of the business that needed their attention was actually worth the upside that it created.
Now, when I consider what makes the very best excellent and what makes everyone else the rest, it actually came down to this concept of a K. So here’s the bottom line about K-shape recovery. There’ll be some industries, some businesses within that industry and even some economic markets or areas that are geographic that are going to really rocket to the moon. Then there are going to be many others that struggle and get stuck in that middle spot where they’re just getting by. They’re basically barely covering payments and rents and barely making a dollar after EBITDA or even after paying all their expenses. That’s where a lot of businesses may be and really honestly, that’s where they’ve likely been for a while if they’re there. And then of course, there’s the bottom side of the K where there’s struggle, there’s dissent and there’s likely businesses that are dissolving and there’s many of those as well.
Be the best aka the top of the K
I’m obsessed with the top of the K and unapologetic about it because really, it’s where I see the most opportunity to continue to get better. I always say the best client that I work with is a creator or a small business owner or even a big company that wants to go from great to better. They’re not just focused on what’s directly in front of them right now. They’re proactive. They’re leaned into the business and they’re determining, right now, what’s great for the short term but also looking ahead at their long term. This is where the top of the K always excels. Whereas people who are in that bottom half or even in that middle stuck point, they’re often reactive instead of proactive. They’re also often unable to have resources to invest in the business, to change the path of the business or even to have the reserves needed to feel financially stable.
This is an interesting thing because I’m always really hard on big business. With big business, you don’t have to have the fundamentals the way you do as an independent creator or a small business owner. As a big business, you can raise venture capital. You can go IPO on Wall Street. You can have private or public investors or anything in between that helps you to fuel your growth without having the right algorithms for success or the right key performance indicators of your business. Regardless of size, it’s possible. Whereas what I love about scrappy small business owners and creators is that we absolutely have to be profitable. It’s sink or swim and I think that creates a really enticing business climate for the very best, the top of the K. Where I know that is challenging is that it often means the demise of everyone else.
Anyone can make this work (keyword: work!)
So I’m unapologetic in that I believe that anyone can be at that top of the K. It doesn’t matter your age, your background, your gender, where you come from, where you live, where your business is based, if it’s online, if it’s brick or mortar, I’ve seen it all and I’ve actually lived it all as an entrepreneur myself. However, I do believe that there are some really great aspects of being part of the top of the K and that if you’re not currently there, if you’re not looking at a great year or a better year or even a year that’s climbing and getting towards your prior year goals or two, three years ago successes, I think it’s time to think differently about your business. It may be that you don’t have a business at all. You have a hobby and making that decision to go from hobby to a full-fledged business with all the benefits and all of the investment and all of the resources can be a decision that you can make.
Grow and Thrive
But I also believe that those at the top are going to continue to thrive. They’re continue to grow and they’re going to continue to do it their way. So I want to speak to those of you who are approaching the top of the K or perhaps you’re really focused on making the most out of your best business life and you’re probably in it right now or you’re about to be. I believe this is the time to double down. There’s a saying, “When things are good, you always take the good, double down on it so that you can get even better.” And I believe that great companies, great businesses, great creators, great owners, great entrepreneurs, they are not born. They’re built.
And depending on how you look at things, I know this looks economically stark for someone who’s not wealthy, somebody who’s not running a thriving business, maybe you’re just starting out as a creator, but I truly believe that intention and strategy are two things you can do in a sea of things that you can’t do. So I want to encourage you today. Being intentionally strategic and also being clear about the tactics in your strategy are two things that regardless of where you are in this recovery, in this economy and in this world, you can do. So when we think about being intentional, we’re really thinking about the long term of the business as well as the short term and this is true from a financial perspective, from a people perspective, from a systems perspective. Gone are the days where you can just get by and buy and figure things out as you go. You need to be very clear about what does the business need? Should you invest in it? Who can help you maximize it? These are the things that the top 10% are focused on, with laser precision.
The strategy to get where you want to be
Now, from a strategic perspective, that’s where implementing tactics such as marketing, advertising, sales process and even just having more of an e-commerce view of your business, whether you’re a digital or brick and mortar. I think some of the best practices that we struggle with in many independently-owned creative businesses are amazingly done by fully digital e-commerce businesses that you’re patroning right now, that you admire and that you trust. And the reason for this is because they have figured out that there is a system to being successful. It is not spaghetti at the wall. It is not accidental. It does not pull back everything and hope and pray that things work out. It is a tactical, strategic, intentional decision to be successful. And almost always, it comes down to sales and marketing.
So you can have the very best product or service in the world. You can have the best knowledge or skillset that you want to produce and bring more information to people as a creative and you can have the opposite of that. And really what separates the best of the best from the rest is typically how they invest in their sales and marketing. That’s the honest truth. If you think about some businesses that you maybe love to hate, it’s always a great example of what they’ve done to double down on their sales and their marketing.
You can do this!
So I’ll leave you with this. You may not be a IPO-driven Wall Street tech-enabled company but you have a couple things really going for you if you are an independent creator or business owner and that is the fact that you are in the business of being boutique. You’re in the business of being small. You need to know your client better than anyone else, better than your big counterparts but also better than the other 17 people that are trying to do what you’re doing that have either started, they’re either ahead of you or they’re nipping on your heels right now to grab your success. And this is where that proactive, leaned in response to looking ahead and knowing what it takes to grow your revenue and stabilize your expenses and look at your business as a place to invest in, just like any investment in the stock market, any investment in your financial future, any investment beyond just holding on and saving.
I think you’ll find that there are amazing opportunities that will come your way. There are amazing successful people that you can lock arms with and see success with and celebrate with and there’ll be many issues use and stuck points and concerns that simply don’t keep you from the success that you deserve, but almost encourage you to continue on the path that you’re on because you know that you can get through almost anything that you want to get through. Because you know that although there are lasting implications of some of the struggles or stuck points that you’ve been through, when some door closes, there’s always a window and that window’s just waiting for the right person to climb through and make something happen.
Your specific situation may be even more favorable
So, I would love to talk to you more about your specific situation. Breaking down a K shape recovery means there’s absolutely some science and some qualitative and quantitative to this equation, but there’s nothing more applicable to your business than actually analyzing not only where you are, but also what have you done? What can you do and where do you want to be? And I always think in business and life and everything in between, it’s all about finding the right fit. That’s why they call me the fit coach. So let’s talk about your business and see if there’s a good fit.
I really believe that that’s where more businesses and entrepreneurs and creators can be. This is especially important if this is not just about recovery, but it’s about the general state of the economy. There’s so many crazy things going on in the world, it feels like if you blink or you miss a couple of days of the news, that you’ve completely lost track of reality. The truth of the matter is inflation has been here for some time and is rapidly advancing. You’re likely seeing it in your business. You’re probably even considering adjusting your prices. Hint, you should. And wanting to do that strategically instead of just throwing spaghetti at the wall, or choosing a number is something that I actually respect about small business owners and independent creators. It’s different than big business that uses all the analysis and data and special functions that someone like me does.
Helping people can mean helping yourself
But your heart as an independent owner and creator, it’s typically to help as many people as you can, as affordably as you can, but with your needs and mind as well. So running the business efficiently with some profit. And that’s where I’m really grateful to bring those big business best practices down to average mom or pop business owner. And so I want to say this very clearly, if things are well, it’s time to go deeper. It’s time to go bigger. It’s time to get grander in what your big picture goals are. And I think it’s time to adapt to the concept that this is likely an economy that’s not changing anytime soon. So we’re going to have to work with inflation. We’re going to have to work with government stimulus as much as it kills me to say that. We’re going to have to work with the aspects of politics that aren’t going well, maybe in your local market or even in the world.
And I think those who are problem solvers and critical thinkers, they’ve been doing this for a while. They haven’t waited for some sort of government program or opportunity that’s handed to them. They’re out there making their own success. And so I believe that K-shaped economy says long term permanent vision with ongoing and tactical investment. That means investing in marketing, having a sales process, improving your customer experience both online and in person, depending on what kind of services or products that you offer. Whereas a K-shaped recovery is in some perspectives, waiting for things to get back to where they were and what they used to be. And if I can be really frank, I don’t know that that’s realistic. I think that having a forward thinking perspective of your business is likely what’s going to provide you the best short term and long term results.
So that’s why I say a K-shaped recovery is perceived as short term, right? Just like a recession is, whereas a K-shaped economy allows you to think a lot deeper, a lot broader and a lot longer. So I’d love to go deeper in this and continue to educate you on how to use the economy to your best and to make it something that’s successful for you and improving you and your business. And I want to encourage you to keep going to make the most of every opportunity that you’ve got. And if I can help and give you some insights along the way, feel free to reach out.