Turn It Up In A Downturn
JUNE 2, 2020
Opportunities often come during difficult times. That is if you are prepared for a downturn, recession or, as we now know, a pandemic. Thinking ahead, by considering some of the following tips, could have you operating ahead of the curve.
During the pandemic, we heard from some contractors who said they planned to slow down or close shop for a few weeks to ride out the lockdown orders. While COVID-19 had to be respected from a health and safety standpoint, most contractors (in most states) were not ordered to stop working. The smart ones found ways to work with social distancing while taking advantage of business-management online platforms. The brilliant ones pushed farther ahead and found ways to network for future jobs (when safe). In a recession, we all know it is difficult to find customers. So you have to work harder, network more, increase your marketing and advertising campaigns, and promote your company. The result is you will stand out in a less crowded field. Be cautious, however, that you don’t stretch yourself too far and attempt work that is beyond your scope. Now is not the time to experiment and fail.
You most likely have met with your accountant a lot lately, but add on another meeting to talk about cash reserves and funds that can be available in an interest-bearing account. Loan terms and rates have been at historic lows, so discuss if a loan is a good idea for your company as well.
Check your attitude and mood every day. It is easy to get caught up in emotions or turn into a loudmouth during difficult times. I don’t know about you, but many of us actually feel calmer and more positive than before COVID-19 because it brought a reality check about prioritizations. Continue that positive attitude in the office and with your crews. Moods are infectious, and your employees will in turn be positive around other contractors and customers because you were positive with them.
The labor pool has increased over the past few months. Dive in to find the qualified and committed workers who are waiting to go back to work—if you need new employees for additional work. Experts warn against overstaffing because it increases your overhead costs and liability. The contractors who declared bankruptcy or shut down also have equipment, vehicles and tools to sell. Go make a deal! When the economy improves, review your inventory and sell what you don’t need. In a strong market, you will make more money than if you sell off vehicles now.
Assuming that you will get paid at the end of a job is not going to cut it in a downturn, so learn more about the financial agreements of a project and the payment plans. Speak directly with the building owner, or have the general contractor ask for financing information on your behalf. Stay on top of invoice/bill collection so someone does not take advantage of you.
You cannot plan for everything and be completely recession or pandemic proof. You can set yourself up for success by learning from past failures and successes while being smart.