If you pay attention to current media and economic commentaries, you will hear opinions of a slowdown or correction in the economy, particularly within construction and related trades. Have you prepared yourself for this correction after four years of continuous double-digit growth?
The reality is, those in business for over 20 years will recognise that good times do not last forever, just like the seasons of the year. Businesses with longevity realise that there will always be a winter and prepare accordingly throughout spring and summer.
Far too often people in business expect spring and summer to be indefinite without a correction or even a downturn to bring things back into equilibrium.
Here are some points (perhaps a few unconventional) to consider when a potential slowdown or correction in the marketplace impacts your industry.
Build cash reserves
Many trade and construction business owners are only one bad month away from running out of cash and having to close the doors. Building a cash reserve that gives you a financial cushion and peace of mind, is essential to surviving a correction however, it also allows you to take advantage of opportunities that show themselves at this time in the cycle. You may have a chance to purchase a similar business in your industry to expand your offering, or to confidently fill your calendar with quality work by investing more into your marketing and sales processes. Building a cash reserve is preparing for an unknown opportunity in advance.
Increase your marketing spend
When the economy starts to slow down, it is not the time to cut back on every expense in your business. In many cases, if done correctly, extending your marketing expenditure will be an investment that will bring you a return to every dollar that you spend.
Ensure that you are clear with your target audience, test and measure all your marketing channels, and maybe even refine the audience that you are serving. This is an opportunity to niche your offering and specialise in one key area, versus being all things to everyone.
Associate with positive business owners
Jim Rohn, one of my favourite business philosophers, once said, “Don’t wish that life is easier, wish for better skills.” There are things in life that you can do something about and things you cannot do anything about. Find the wisdom to know the difference. Many people focus on and complain about things that they have no control over, and this consumes them. This negativity will consume you too if you let it. Focus instead on associating with positive, solution-finding peers. Being amongst like-minded individuals with a view to the future will not only keep you in the right frame of mind, but can provide support and fresh ideas to continue moving forward.
Train your team to deliver great value
During corrections or tightening of the market, money still flows, however people become more discerning in where they spend it. You just need to ensure that your company is the one that people are prepared to spend their money with. Invest time educating and training your team to communicate effectively, deliver great value, educate the customer, and represent your business in the best way possible. It has been proven that those companies who invest in learning and development of their team, regardless of the economic cycle, produce a higher profit margin and improve staff loyalty at the same time.
Seek a mentor
Your industry is full of older, wiser and more experienced business owners who have been through many economic cycles. Make sure you have someone from your industry or similar trade who has not just survived but thrived in downturns and corrections. They are often only too happy to share how they manage their own personal well-being, thinking and actions during this uncertain time. Your mentor should be someone not afraid to ‘tell it to you straight’ to ensure your efforts are headed in the right direction.
Remember to trust the process, manage yourself wisely and pay attention to the points above, and we will see you when spring and summer come around next time.
For more information on creating consistency in your business, contact the PROTRADE United team on 1300 767 774.
Written by Jon Mailer
CEO of PROTRADE United