With the economy continuing to spiral downward, it’s only natural for construction companies that are feeling the pinch to focus on the negative. While industry experts agree these are troubling times, some businesses are using this as an opportunity to reexamine, regroup, and refocus on their core strengths. For those who do persevere and utilize a slowdown to their advantage, there will be many new opportunities that will present themselves as the economy picks up. Here are five strategies to utilize to keep your construction business on track and profitable now and in the future.
# 1 Cut the Fat
Begin with evaluating everything in your company’s budget that can reduce expenses. Look beyond the spreadsheets, and be prepared to make cuts. Even simple changes like using less paper and cutting down on unnecessary driving can go a long way to reducing costs. And yes, you might even need to look at salaries and whether or not certain employees are generating enough value to warrant keeping them on board. These are tough decisions, but it’s far easier to lay off one individual than to tell an entire company that you are going out of business.
#2 Beef Up Marketing
Frequently, companies will hastily cut their marketing and promotions efforts during a difficult economy. This is actually the opposite of what should be done. While it may save an initial amount of money in the short term, it will ultimately reduce presence in the marketplace and lower the chance of acquiring new business. Keeping your company’s name out there indicates your dedication to the construction industry and shows that you’re remaining strong and productive despite the economic downturn.
#3 Renegotiate Your Contracts
Take this period of slower business to review all of your existing contracts. From contracts for accounting services to insurance and equipment, to the vending machines in the break room, renegotiate your terms. Vendors may be more willing than ever to offer lower prices, better terms, or financing in order to retain your business. This is especially true with banks right now. Since many banks across the country are also struggling, they’re eager to attract clients with big deposits. Often times, you can get a better rate on a loan or ask to have rates reduced on an existing loan if you refinance or offer to move your company’s deposits to a new bank.
#4 Reconnect With Current and Past Clients
Current and past clients may also be feeling uneasy about the economic instability. Take this opportunity to remind them of your offerings. Utilize your marketing materials, make phone calls and even host a client appreciation dinner or day of golf to target key people. Not only are you thanking them for being loyal customers, you are communicating loud and clear your staying power. Reconnecting may very well result in some new business for your company!
#5 Hire an Expert
While most of these strategies can be achieved without outside help, hiring an expert to evaluate your business plan and offer process and workflow improvements might be the best way to develop a long-term strategic game plan to staying successful. "Businesses often operate on a ‘things to do’ strategy and don’t take the time to define the big picture processes," states David Brown, president of D. Brown Management, a leading provider of project management and consulting services for the construction industry. "If you take the time to design the processes correctly and stay focused, goals will naturally be achieved as a byproduct."
Headquartered in Northern California, D. Brown Management provides a comprehensive scope of general management solutions to construction clients nationwide, including strategy, planning, operations, field productivity, workflow, financial management, technology and marketing. To learn more, visit www.dbrownmanagement.com