In a time of economic contracting, you could be forgiven for thinking the best way to weather the storm is to batten down the hatches and wait. From a business perspective, this makes a lot of sense. I mean, some of the most robust economies in the first world imposes self-austerity in times of crisis, so sure that's the correct thing to do for small business right?
As any budding, or even successful entrepreneur will testify to, fortune does indeed favor the brave, and an economic free-fall can often be a blessing in disguise if you're savvy about how to work it to your advantage. While common sense dictates that we should hold onto our cash in a time of uncertainty, there is plenty of anecdotal evidence to suggest that going further into debt, and expanding out of the fiscal contraction is something akin to taking a steam ship through the breakers; it just plows through it, while the cautious either get swept away, or never make through the squall.
Sir Richard Branson, founder of the Virgin Group is one such captain who steered his ship through many-a rough economic sea, and almost always his gut reaction was to reinvest, reinvent and leverage the companies' equity into another business vertical. With his first enterprise, Student Magazine, floundering, he saw an opportunity to sell records by mail order and made that business profitable. When the British Post Office went on strike, mail order was no longer viable so Sir Richard opened up what was to become the first Virgin Megastore on Oxford St, and sold records direct to the public. Several years later, he leveraged the industry contacts he made selling records into starting Virgin Records and signed the likes of Mike Oldfield, Phil Collins, Boy George and the Sex Pistols. Itchy feet then saw Branson take to the skies, and incur the wrath of the indomitable Lord King, head of British Airways. This rivalry almost sunk Branson's ship, but it won a few landmark libel cases against British Airways and subsequently sold Virgin Records to EMI for a billion dollars (US) and Virgin Air became the most cash-rich companies on earth, and British Airways were no longer a problem.
The point is this; Branson saw crisis and opportunity much as the ancient Chinese did; as the same thing. There were times when he was overdrawn, taking no wages for himself, sleeping in basics and negotiating with banks, creditors and equity partners, yet he was always prepared to outgrow his fiscal problems and make some very intelligent decisions when it came to the expansion of the Virgin empire.
Having said that, Sir Richard would say that business and life are about one thing, and one thing alone; Survival. If you can survive the storm and learn to recognize it as it forms on the horizon, you will always be able to navigate around it, or go through it, as many of the great entrepreneurs have done.