What is Sluggish Economy
A sluggish economy is a state of an economy in which growth is slow, flat or declining. The term can refer to the economy as a whole or a component of the economy, such as weak housing starts.
BREAKING DOWN Sluggish Economy
When the economy is in a sluggish state, it is generally harmful for a business since consumers and other businesses are less likely to purchase its products. A sluggish economy also has a negative effect on the labor market as businesses are less willing to hire more staff in times of weak economic growth.
Financial media often use the term "sluggish economy". For example, you will often see headlines like "Economy Sluggish due to Rising Oil Prices."
Good Businesses to Start in a Sluggish Economy
It may seem counterintuitive, but a sluggish economy is actually a great time to start certain types of businesses. Less competition for customers and lower marketing costs can create conditions conducive to success. Here are some of those business types:
- Debt Collection: While debt collection is not an especially pleasant business, it's one that generally does well during economic downturns.
- Healthcare Products: An aging population with declining health is going to purchase healthcare products and services—recession or not.
- Job Search Agency: When people lose their jobs, they often turn to employment agencies or job search firms.
- Mediator: In tough economic times, many people turn to mediators rather than attorneys to settle disputes simply because they are less expensive. If you're skilled at negotiating, this may be a solid business opportunity.
- Security Firm: Security firms usually experience a boom during a sluggish economy. The security business is not just about security guards; it's also about performing security and background checks for employers.
Marketing During a Sluggish Economy
A struggling economy actually presents an opportunity for marketers. In such scenarios, people are seeking reasons to feel good and the tough economic times have likely thinned out competitive marketing and advertising efforts. This presents a greater opportunity to be heard by a market. They key is to provide attractive offerings, both in appearance and in value and to use creativity to meet their needs while making them smile and relieving stress. If a company can accomplish that outcome, even if a customer isn't ready to make a purchase immediately, once their finances improve, they'll remember how you made them feel through your marketing efforts. A marketing campaign that uplifts its potential customers can differentiate itself from products that are otherwise the same. It's all about give your audience a reason to buy from you.