Let’s be honest– completely separate from how you run your contracting company, there is a thing out there called the economy. I’m talking specifically about the macro economy. Macro means big and that means the economy on a regional, state wide or national level. There are many factors that go into the condition of the macro economy- the cumulative effects of millions of decisions by consumers, producers and investors- but you yourself are unable to have almost any effect on it.
It is what it is, and like a boat floating on the waves of the ocean, your best bet is to keep an eye on what kind of weather is coming, so you can adjust your sails accordingly. There are things you can do to protect the financial viability of your home contracting business in tough times. Just as, conversely, there are things you can do to accelerate a downward spiral as cooler economic times approach. The idea is to cultivate the former while eliminating the latter.
GO TO THOSE YOU KNOW
Especially in an economic chill, go to your existing (which includes previous) customer base. They will provide a very worthwhile foundation from which to gain jobs and increase revenue. In the home contracting industry we often think that all of our next client interactions and paid work contracts need to be brand new people we’ve never seen before.
But so often, a good former customer can become a return or repeat customer. Sometimes it just takes reaching out with a check-in and an offer of a home inspection, or the suggestion of replacing old wiring and outlets or pipes and washers on the verge of cracking.
Your overhead will stay pretty much the same regardless of how the economy is doing. So you may as well go back to your existing customer base and see what they need- leaving no stone un-turned and really maxing out your interactive customer service.
But what about when you’ve tapped everyone you know?
IT’S A PEOPLE GAME
Some financial analysts may say the key to increasing sales and building a profitable business is to cut back on inventory, unnecessary employee hours and marketing efforts. But the truth is, you can never cut back your way to success. You have to invest in quality if you expect to have a fruitful business.
By being cheap and focusing on the numbers, you’re losing the true source of wealth – your people. See, money is energy that comes from relationships.
You won’t have a nice car if you don’t have a vendors that like you. You won’t have a vendors that like you if you don’t have customers buying your services. You won’t have customers buying your services if you don’t treat them with the respect, honor and care that they want, need and deserve.
MAKING A NAME FOR YOURSELF
Many contractors want to avoid any and all unnecessary marketing costs when times are tight. It can be risky, paying to boost your Facebook post in the hopes that someone will see it and contact you. It can seem completely terrifying to pay for a billboard that may or may not get the phone ringing. And it can seem like a complete waste of time to drop your hard earned money on some massive trade show where you’re competing neck and neck with competitors in the next booth. But that’s exactly what you need to do if you want to break through to the other side.
Potential customers are a lot more likely to pay for a service from a premium company that they have heard of and associate with the highest quality. This kind of promotion, however, takes a long-term investment.
But you’ve got to start somewhere. So stop worrying, and start marketing. Get out there and get that quality face time with your new potential partners – just don’t forget to make those magic moments.
MAKING FRIENDS WITH THE ENEMY
There are actually numerous opportunities in a difficult economy to find companies that are struggling financially. When you have built a consistently effective profit model, find a nearby company that is in the similar trade who might be looking to sell shares of their business.
You might be surprised to find out that they are willing to sell for considerably less than you might assume. Acquire tangible, profitable assets of theirs such as phone numbers, customer lists, and employee producers. An offer of 10% of the sales from their customer list for 3 years is likely to be accepted.
Economic downturns can be very serious business and can level even organized, well-run home contracting companies. If you want to stand a much better chance of surviving and thriving in a major- or minor- recession, then take these lesson to heart, learn them and execute them in your contracting company.
While nothing is ever guaranteed, both chance and economics favor the well-prepared, logically run company every time.
Read the full article as published in Home Service Max Magazine: https://homeservicemax.magtitan.com/magazine/issues/home-service-max-11/avoid-creating-your-own-personal-recession.