Bear Markets Rarely Schedule Appointments

For anyone familiar with Dan Peña's work, you'll know he uses this phrase a lot as a cautionary comment about being on guard when planning for all the uncertainties of business and life in general.

Not being the sharpest tool in the box, it took me some time to reflect on it and understand exactly what he meant by this phrase. However, the insight behind it is sheer brilliance, as one would expect from someone who's spent the majority of his life doing business on almost every continent.

Taking this hard-won wisdom in the context of the property market, here's what I've noticed ever since the 2008 banking crisis - people are quick to complain when things go wrong in the market, however they're also pretty bad at planning ahead for such eventualities during the good times.

And the rapid switch between the two seems to be a constant in today's world. I mean, look how quickly the whole world shut down in April 2020 – who could foresee that unfolding and what untold damage has it done to livelihoods and businesses internationally? Especially those who had to borrow money to continue trading through these difficult times – their liabilities increased whilst their cashflow disappeared!

Currently, the media is split into two camps concerning the housing market. Yet speaking to agents up and down the country, it's clear the market is rapidly moving away from the heyday of 2020-2022, where houses were sold in a heartbeat and many achieved more than their asking price. The cautionary tale here is that no matter what may be the situation locally or regionally, once the national press start pumping out the doom and gloom headlines, you can bet your bottom dollar the market will take a nosedive.

In fact, with every rise in interest rates, it seems more and more certain that a housing market crash is on the cards which could cause very serious problems for estate agents and conveyancers alike.

Yet, what's interesting is the psychology of most business owners when faced with a changing market. Overwhelmingly, they usually support the myth of a constant continuation of the good times, even when there's substantial evidence to the contrary, and rarely do they ever want to think that the "bad times" might finally be upon us.

But the most successful people in life and business are generally preparing for the bad times during the good times before reaping a harvest in the bad times, whilst everybody else is running scared. As Warren Buffet famously says: "Be fearful when others are greedy, and greedy when others are fearful."

Powerful stuff!

This begs the ultimate question - if the market were to crash next week, what would you do in your business to be able to weather the storm, protect yourself, continue to feed your family, and come out the other side thriving?

To me, it makes perfect sense to be putting an action plan in place right now, for when the market does turn, even if it doesn't turn for three years or more, because ultimately, doing this work is only going to protect you and your business, rather than undermining you in some way.

In fact, it is a complete no-brainer strategy to be building a war chest during these current good times, and holding everything back in readiness to go hard during the times when the market is less certain, less robust, less buoyant and when your competitors will more than likely be going out of business (because they failed to make such plans).

You'll be no stranger to the fact that the current housing market needs significant change to get deals done quickly. And should we experience a market similar to the late 1980's, early 1990's, (or even 2008-2010), you'll know that a very different scenario could unfold where properties take significantly longer to sell, and as a consequence, agents are unable to bank their commission as soon as they want to.

Taking this thinking one step further, what would happen if we experienced a market similar to 1929, where up to 65% of the value of properties was wiped out in a few short months, and the stock market fared even worse? Think this can't happen again?

Yes, it might seem like doom and gloom thinking, but any savvy business owner knows that recessions happen every 7-10 years and depressions happen once every hundred years. And isn't the value of property solely based on the ability of buyers to borrow a substantial part of it from somewhere? What if there's another credit crunch? What if the current fiat currency system fails - as every fiat currency system in the last 5,000 years has… what then for your business and your livelihood?

Perhaps, then, it is more shrewd to be thinking along these lines and building in a factor of safety into your business so you can take advantage of the lulls in the marketplace, especially where your competitors may be struggling, and you can create significantly more success in the bad times than you ever can in the good times. Because here's what I do know – when recessions come along, most business owners do the exact opposite of what they should be doing – they stop advertising, they cut their expenses and they fail to investigate new technologies and ideas that could catapult them to the very heights of success that they desire.

So to be crystal clear – whether you're an agent or solicitor, the very lifeblood of your business will depend on being able to offer up-front cash generating services whilst being able to fast-track deals to completion, and bank your fees far quicker once sales are agreed.

Failing to do so will put excessive strain on your cashflow, potentially leading to the destruction of your business and livelihood.

And if you want to know how to create cash-generating services AND get your deals done in half the time – you can book a demo of WiggyWam here – visit www.wiggywam.co.uk and click the Book Demo button now.

As a final thought on this matter, in 2023 already we've started to see the teetering of some banks, who have been forced to close or have been absorbed by other players. Why are they failing? Well, it's largely because they're holding risky "investments" which they got involved with because, quite frankly, they're not gambling with their own money!

Put simply, as long as bankers remain as unregulated as they are, then they'll continue to get involved in more risky "investments" and high-risk opportunities, which will ultimately have a negative impact on the national and international economies when they fail. For anyone who's watched The Big Short knows, it will be you and I that's left to pick up the pieces and is given the bill for the banksters risky gambling.

So if you're forward-thinking enough to recognise the fact that this good market cannot go on forever and you want to prepare for the downturn like many other agents are already doing, then we'd love to hear from you at WiggyWam. It's our pleasure to serve you in putting a solution in place to help weather the economic storms of the future.

Please reach out to us via email: This email address is being protected from spambots. You need JavaScript enabled to view it. or book your demo of WiggyWam here – visit www.wiggywam.co.uk and click the Book Demo button now. 

We'd love to hear your experience, thoughts and insights on this. Please post in the comments section below.