Jul 14, 2023
As a construction business owner, adapting to a slower economy
can be challenging. However, there are several steps you can take
to keep your business afloat during tough times. One of the most
important things you can do is to focus on efficiency. Look for
ways to streamline your operations and reduce your expenses without
sacrificing the quality of your work. This might mean cutting back
on specific services or finding ways to complete projects
quickly.
Consider the following:
Have there been changes in your industry or the way customers
behave?
Can you identify any new, untapped opportunities?
Are there any emerging trends that you can take advantage of?
Understanding your business' position in the market and identifying
opportunities to differentiate from competitors is crucial. It
guides your marketing budget allocation and shapes your
products/services.
A chance to
improve efficiency
If your business is experiencing a slowdown and you have some
extra time, it's an excellent opportunity to improve it. Many
business owners find prioritizing improvement initiatives over
customer or administrative tasks challenging, but now you can focus
on executing those long-standing plans. These activities can make
your operations more efficient and will be even more beneficial
once things pick up again.
Documenting
processes
Capturing your business processes is a valuable way to improve
efficiency. Documenting procedures and creating visual aids can
help onboard new team members faster and safeguard against
knowledge loss. Protecting your business from the risk of key
personnel leaving is essential.
Automation
Artificial Intelligence and automation are changing everything.
Explore how these technologies are used in your trade to streamline
tasks like data entry, reporting, and inventory management.
Update old
systems
Migrating from one system to another can be complex and
time-consuming. Businesses often stick with legacy systems for
longer than necessary. But new tools can speed up daily tasks,
benefitting long-term business growth. These new tools are good for
business long term.
Exploring
different revenue streams
Consider exploring additional offerings if there is a decline in
demand for your core services or products. By diversifying, you'll
better weather economic downturns and ensure a steady revenue
stream.
Service-related
Consider your team's existing knowledge. Can you broaden your
work to capture more clients? For example, if you're a builder who
completes new builds, think about how you can communicate your
skills for property maintenance, custom carpentry, outdoor living
spaces, or project consulting. Your skills and industry knowledge
can be used in various ways – take some time to think about it.
Nurture customer
relationships
Focus on your existing loyal clients as a top priority, as their
satisfaction is vital to maintaining a successful business. While
acquiring new customers is essential, remember that the cost of
acquiring them is often higher than retaining the ones you already
have. In today's digital age, providing outstanding customer
experiences is crucial, as online testimonials and recommendations
greatly influence potential customers. Take advantage of quiet
periods to add spontaneous value to your loyal customers, whether
offering advice, checking in on their satisfaction, or surprising
them with something free. Going the extra mile for your customers
and thinking beyond transactions will earn you their trust and
respect, resulting in positive word-of-mouth and referrals that can
significantly impact your long-term success.
Expanding B2B
opportunities
Consider if your business, focused on serving end users, could
extend its offering to cater to other businesses (for example -
Nursing home maintenance, etc). This can provide a consistent
revenue stream with less time and management than direct consumer
engagements. Assess whether pricing for businesses could be lower
than for consumers. Estimate potential revenue against reduced
margin. If the numbers align, explore this opportunity while
maintaining your core business.
Keep track of your
finances and budget
Regularly reviewing your finances is crucial to improving your
business's health. During quieter periods, you can implement
cost-saving practices that have a lasting impact. For example,
consider reviewing your suppliers for cheaper options to save time
and money. Conducting a comprehensive expense review can unlock
savings without significant disruption.
Understand natural
business cycles
Keep calm and avoid making hasty decisions based on short-term
events. While ignoring the constant economic commentary can be
difficult, it's in your business's best interest to rely on
concrete facts and data when making decisions. A long-term business
plan is a reference point for guiding your choices.
Finally, staying current on the latest industry trends and
technologies is important. This can help you stay ahead of the
competition and offer your clients the best possible service.
Consider investing in new equipment or software to help you work
more efficiently and effectively. And don't be afraid to seek
advice from other industry professionals or attend conferences and
workshops to stay informed.
Final
thoughts
Overall, adapting to a slower economy requires a combination of
creativity, flexibility, and hard work. But with the right
approach, you can keep your construction business thriving even in
challenging times. Let me know if you need help balancing
short-term actions with long-term goals. I'm always ready to
listen.
About The Author:
Sharie DeHart, QPA, co-founded Business Consulting And Accounting (Fast Easy Accounting) in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on managing the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or sharie@fasteasyaccounting.com