Wise Ones -- How/what Do You All Do In Slow Times?

dirt diggler

Lately I find myself wondering how in the heck to plan for the future.

I know that if I continue in my business, that sooner or later, I will encounter a period of time that is slow --- whether a recession, or some kind of other trend/cycle. I'd like to have a "plan A & B" for this.

I know many of you wise ones have gone through this. I know of many companies in my area that have been in existence [i.e. "Since 1974"]

So what did you do ???

Tscarborough

In 1986, we changed focus from commercial to residential for a few years. In 1991, we focused on municipal/federal work. In 1994, we went back to residential, and in 2001 we targeted municipal/federal again.

There is always construction being done. it is just a matter of targeting the proper segment.

BuiltByMAC

Don't know if I qualify as a "wise one," maybe a "wise-azz!"

I joined the local Home Builder's Association a year ago and made an effort to insert myself into the organization. I volunteered some work, got on a committee, went to the dinners. It has paid off in spades. I now have two local builders as steady clients. I became a Trex Pro and am a Certified TimberTech Builder. Both of those designations mean people can now find me through the companies' websites. I guess what I'm offering to you are ways to make Plan A strong enough so you don't need to spend time, money and energy on Plan B.

I don't know exactly what you do, your trade is "Contractor" and I can only make the assumptions that you specialize in excavation and really, really liked Boogie Nights!

Tscarborough's got a fine idea too - keep your target market fluid enough to roll with the changes.

Do an amazing job and people will find you. There are too many crap contractors out there, once people find a good one, they will spread the word.

Mac

HandyAndy

Hello Dirk,

Let me explain what worked for me so that I never encounter a slow period. As a contractor it's so easy to focus only on the job and not on the customer. Of course you should do quality work and charge a competitive price. That’s the job. But, what about the customer? What I mean by that is humans are all creatures of emotion. If you treat the customer with respect and become genuinely interested in them, they will in turn become genuinely interested in you.

Whenever a potential customer calls me for a quote I treat them with the utmost respect. I ask them how they are and what their name is and so on. I become truly interested in them and they feed off this. I make them the center of my world and even when I quote them more then the last guy, more often than not they will end up going with me. I say something like, “wow, that’s a great price he quoted for you. I’m sure if you go with that guy you’ll be happy with the work. I’m sure you can’t go wrong with him.” After that, I tell them how I can help them and I stay focused on them as an individual and not so much as a customer.

Do the job and do it right. But also become a friend. It takes practice and it has to be sincere. I really believe that mastering this is many times more valuable to your business then your work alone. Do this and you will never encounter a slow period. You’ll be getting referral after referral and customers will wait for you because they like you. It works for me and I know it can work for you. Even if your customer service skills are good they can always be better.

Become genuinely interested in your customers and they will love you for it. This is also true for any relationship you’re in.

copusbuilder

I agree that in the construction/remodel business referrals are the way to go.
When it gets slow we have a long list of things people say "when you get a break fit me in" type jobs. They aren't all the jobs you want day in and out but many are just flexible with their timing.

Now, that may work in remodeling but dirt spreading or roofing could be a totally different scenario. Weather could also play a big part.
This is the one time of year I am glad we are in Texas as work can almost always proceed.

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Mike Finley

You advertise more when it is slow.

Grumpy

Diggler, I don't know if many would consider me wise, however I think I have some of the kinks figured out. First off you should anticipate for the slow times as much as possible. After you have been in business a year or more you should have a good historical indicator of when your slow times will be coming around. Personally I like to advertise when I am busy because that's when everyone is busy and then it allows me to build a larger backlog of work.

Obviously when you are slow you need to still continue advertising. However there are some delays that are out of your control like winter. All construction and remodeling slows down in winter.

Mike Finley

That's right, but if you look at the dollar amount of business that is going on as a pie, if the overall size of the pie gets smaller in the winter all you need to do is get a bigger piece of that pie to stay steady.

Recession, expansion, contraction, depression - - I don't know too many of us that create more customers, so it always just comes down to how big a piece of the pie that existts you can take. The pie gets bigger or smaller, you just need to make sure you are able to take the size slice of it you want.

Double-A

Actually, I'm with Grumpy. Advertise before your traditional slow period. But if your season shuts down because of winter, then its silly to do this. As for recessions and area lulls, I think diversification is the way to go.


One area of contracting that I think would be a nice one to get into with high start-up but with a low and fixed overhead would be leak detection and location. Takes expensive equipment and some training, and lot of experience, but I think that would be something that you could use all year around, but start up in the winter and tune up your skills then as well.

Another is camera work on pipelines, but especially sewers for residential and light commercial. Again, high start-up costs, but its year around work with a fixed overhead and high potential for payback. One truck can do both of these, as well as one person.

Training is available from the manufacturers and from associations and if marketed to the general public I can see it growing quickly to a full time business. Camera work can be done for a fixed price on residential as an inspection for potential buyers or sellers and marketed directly and through real estate offices in your target market.

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

wackman

I used to work for a high end commercial remodeler doing just that. I started out just as a carpenter repairing water damaged stuff, then a lead, then a foreman.

Then I got bored and for about a year I joined the testing division, man I learned so much new stuff. We'd take hoses and dye the water to see exactly where leaks were coming from, we'd use moisture meters and look for clues. It was like detective work. I'd have to fill out long reports and testify in court to my invesigation results with most of the work being insurance work there was years of litigation before work began. If you live in an area with lots of rain it could be hugely profitable.

Run of the mill roofers can't do that stuff, you're right you need lots of spendy equipment.

Wack

Stone Mountain

We're pretty steady from April till October. In november we start with commercial snowplowing, which pays most of the bills. This year we are also actively going after renovations and repair.

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Grumpy

Here is another little tip. I focus primarily on the consumer doing "remodeling". Actually roofing and siding tear off jobs. However about November I start to target the GC's. Why? Because they don't mind a roof being put on in the dead of winter, but I have found most consumers do mind. To be honest I think there are quality issues to working in the cold, but the ends justify the means.

Also in terms of winter, this is something totally predictable, so easy to plan for. You have heard me say to plan your 12 month year as if you will only work 10 of those months? EVERYTHING I do is based on a 10 month work year. Take 12 months worth of overhead and divide by 10 months and you know your monthly overhead variable. Sure it's a little bit higher but it plans for the worst, zero work during winter... which could be possible based on how bad it is.

Another one of my slow times is summer vacation. Again because I target mostly consumers and where are most consumers during the summer vacation? Out of town, or running rampant taking the kids here there and everywhere. It happens every year, so I have learned to work with it the cards I am dealt and plan for it.

As I said in my original post after about a year you will have historic data and be able to predict what's to come under average circumstances. If you know you are normally slow during let's say January, and let's also assume you know your average sale life cycle. My average sale life cycle is 2 months, meaning from the time I write an estimate it usually takes 2 months to get a decision. So if my January is slow and it takes 2 months to make a decision, when do you think I need to boost my advertising? You guessed it, October & November.

Personally I like being slow in the winter. I get to really sit back and examine what's what. Where did I make my mistakes? What type of jobs did we earn the highest profit (so I know what to go after next year)? It allows me to stop the daily grind, sit down relax, go over reports, budgets and numbers and it allows me to realize the information I shared with you above.

dirt diggler

Exactly!!!

I will say --- the winter is great for "stepping back" and looking deeply at what worked and what did not

I'm pushin snow I guess ... better get myself an XM Satellite Radio