Recent entrepreneurs have had a taste of recession in the past few years, they saw things from plummeting sales numbers to large scale lay-offs. However the clothing retailer, Patagonia, has a different story to tell.
Patagonia was founded in 1974 and has been growing ever since. And this growth did not skip a beat during the global recession. In fact, Patagonia booked the best year ever in 2009 in terms of revenue, recording a whopping $315 million in sales.
So how did Patagonia do it? Founder Yvon Chouinard came up with several reasons why his company kept on thriving while everyone else was diving.
Know who you are.
It sounds like a Zen cliché, but this concept has helped Patagonia remain a pioneer in its industry throughout its existence. If you look at the company's history, it's easy to see that it has consistently been a leader instead of a follower.
Patagonia was one of the first retailers to spin stories into the product descriptions listed in their catalogs. Later, it branded itself as a proactive supporter of the environment by utilizing eco-friendly materials and adopting sustainable manufacturing practices - long before the green movement became the trend du jour.
In other words, Patagonia defined itself instead of letting the market or its competitors do it for them. So when their rivals were taking a bath as a result of their reactionary choices, Patagonia didn't have to change a thing – and it continued to flourish as a result.
Make quality a priority.
Again, this phrase can be found in many companies' marketing literature. But Patagonia made it a point to walk the walk, constantly maintaining the highest standards in the assembly of its products. And the buying public noticed.
As a result, when the recession hit, purchasers turned to products they could trust. They gave their precious spending dollars to Patagonia instead of tossing them at the latest trend or fashion. Choiunard also believes that customers bought Patagonia products that they could use for different functions – like a jacket which could be used on the ski slopes or as a top layer on a nature hike.
Be debt free.
Having an absence of debt on the balance sheet gives a company more than just peace of mind. It allows Patagonia to extend credit to its wholesalers that are being affected by the recession. Not surprisingly, these companies are jettisoning lesser-known brands and strengthening their loyalty toward Patagonia.
Get a reputation.
For Patagonia, that meant becoming a champion of the environment just because it was the right thing to do. That reputation has appealed to a certain segment of the marketplace for the past few decades.
For other companies, it may mean fostering its image as a turnkey operation or as the brand with the best customer service. Either way, cementing your status as a leader in a given field will help your company's bottom line in both good times and bad.
As an entrepreneur who is used to blazing trails, it is counterintuitive to take the viewpoint that your company is at the mercy of economic fluctuations. Taking these steps can help you weather the storms of any market – and possibly even prosper in the process.