Will The Threat Of A Recession Damage Internet Businesses?

If you read the paper or visit internet news sites with any regularity you will know that the word ‘recession’ is appearing more and more in a number of different places. The impact of that word is sometimes reduced slightly by the addition of the word ‘possible’ in front of it, although at other times you’ll see the word ‘global’ instead.While everything seems to emanate doom and gloom at the moment, what impact would a recession have on internet businesses? Moreover, are they already feeling the impact or are they more protected than the traditional bricks and mortar businesses?There is no doubt that consumer spending is slowing down in some countries. Worry over interest rates, the economy and the rate of inflation are partly to blame for this. Everyone is understandably being more cautious. It seems harder to make a sale at the moment, but not all internet businesses are suffering.If a full blown recession did hit, then there is no doubt that sales online would suffer just as those in the shopping malls would. But the degree of suffering is likely to be mixed, depending on which businesses you are looking at.The first thing to go when you are trying to maximise your profits and minimise your losses is usually advertising. But that is the worst step to take since it effectively cuts off any chance of snagging more customers. The online businesses that still devote plenty of time to website promotion will be the ones to ride out the financial storm more easily.So the answer would surely be no – any recession or threat of one doesn’t stand a chance of damaging internet businesses any more than it would damage traditional ones. In fact, provided they continue with the web marketing techniques they have used up until now, they stand to get a bigger proportion of the spending money that is still out there.Many people automatically check online before making any purchases nowadays, because they know they can do a quick price comparison between sites and find the best deal – which is almost always better than the bricks and mortar businesses can offer them, thanks to the lower overheads.Profits may sink lower, but in the end it will be the businesses that can offer the most competitive prices that will do well in times of recession, since they will grab the lion’s share of the money. The threat of a recession will not damage internet businesses per se; instead it will merely highlight those businesses that aren’t up to working harder to keep their heads above water in more trying times. Putting the minimum amount of effort in at such a time isn’t likely to bode well for the future, so now is the time to check out your own business to see how well you would do if the much feared recession did actually kick in.Having a plan of action before something happens is always the best way to get through it.