As a business owner, I bet you love what you do. You’re really good at doing your work with pride, integrity and quality workmanship. If asked, you tell people you are the best at what you do and stand by your finished product and personal service. You have spent years working hard, building your company, grooming your management team, developing supervisors and foreman, training your crews, and growing your equipment fleet. You have a small list of customers who keep your company busy and provide you steady work on an ongoing basis. Your business pays your bills and often there is a little left over to buy a boat or recreation vehicle to enjoy on the weekends. Life is good as an entrepreneur and business owner.
Then the Economy got Slower. Now What?
Never thinking a slowdown would affect your business, you continued to do business the same way you’d always done and hoped the economy got better. But it didn’t and there were less jobs to bid on. So, you lowered prices to stay busy and keep your crews working. You ventured out into new territories. Your competitors lowered their prices even more and project bid lists grew from three to six to 12 to 15 or more. The only way you could get any work was to be stupid low, which guaranteed you’d never see any bottom-line profit for a long time. So, you bid more jobs in hopes of landing any work you could find. You started to bid on projects where you have no experience, track record or expertise. Anything to keep your doors open, your crews busy, equipment working and cover your overhead. Now what?
Then you finally landed a few new jobs. Relief! Back to work. But within a few months, these new jobs start coming in over-budget. These projects are different than the ones you usually worked on, and the unfamiliar contract clauses and specifications caused you some grief. So, it starts costing you money to finish the few projects you have going. And your paycheck is only a distant memory as you begin to feed your company to stay afloat. Then your lenders start calling to meet and review your monthly profit and loss statements before they renew your line of credit. Now what?
Stop! Time Out! Hold Everything!
What are you doing? Why are you slowly going out of business by spending your savings and trying to keep your crews busy? How long can you survive feeding your company every month? Do you think something good will happen quickly to renew your bank account balance? It’s time to stop and take a hard look at what you are doing right now before it’s too late.
When work was plentiful, it was easy to stay busy doing the same things over and over to the same customers. You didn’t have to look for new ways to improve your business, new services to offer, or new customers to build relationships with. Just bid enough jobs to your same five or 10 customers, you’ll get your share and make enough money to stay in business. You really didn’t have to be the best, creative or innovative. You just had to be as good as your competition.
Why Are You in Business?
Many business owners forget the purpose of their business is not to cover their costs, do work and keep busy. It is to give them what they want. Do you want to only break-even by working hard, and keeping yourself, your crews, and equipment busy? Or do you want to own and build a company that produces a constant flow of money, equity, wealth and freedom? Your business is a tool to deliver the results you want and fulfill your dream of business ownership.
Do More or Stay Stuck?
Contractors who offer first class professional service packages, make a lot of money and have a long list of loyal customers by offering everything these top customers want. Are you stuck and comfortable doing what you’ve always done? Haven’t tried a new service, market or customer type in a long time? Don’t be afraid to get out of your comfort zone and look for ways to capitalize on what you’ve got to build your future. It’s never too late to reassess your business plan and build a new and improved company that offers more, does more and generates a steady stream of revenue. Look at your strengths, weaknesses, threats, opportunities, assets, people, customers and marketplace. Look for opportunities and expand your thinking. You only choice is to answer the question: Do you want to stay busy or make money?
George Hedley, CSP, CPBC, helps contractors grow and profit as a professional business coach, popular speaker and peer group leader. He is the author of “Get Your Construction Business to Always Make a Profit!” and “Hardhat BIZSCHOOL Online University,” available on his website. Visit www.hardhatbizschool.com for more information.
