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Surviving The Next Recession

 
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Old 03-05-2019, 07:54 PM   #1
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Surviving The Next Recession


Hey guys,

Everyone keeps talking about the next recession coming and it seems like it has been 1-2 years away for about 4 years now...

That being said, it's going to hit eventually. For those of you that were in business during the last one. How did you make it through?

I think the obvious things are to horde cash and do good work.

But... how did your company survive?

I was working for another company at the time and they did a myriad of things. Number one being layoffs. But the upper management took pay cuts, no bonuses, no raises, no 401k contribution, smaller profit target and sometimes break even. But they were a large construction outfit ($350 million a year at the time) What do the 1 and 2 or even 10 guy companies do?
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Old 03-05-2019, 08:27 PM   #2
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Re: Surviving The Next Recession


have strict control over what debt you have.

in the good years save some cash.

when times get lean sometimes you work for wages or a little above & maybe a little less.

you also look at doing work that you normally wouldn't do or don't care to do.

getting out and doing something for low wages beats the hell out of sitting at home & bitching about it.

the old physics rule, about all i remember from high school physics....

and object in motion tends to stay in motion...

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Old 03-05-2019, 08:36 PM   #3
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Re: Surviving The Next Recession


I worked steady through the last recession without hardly noticing it .

I have a good costumer base of wealthy clients that were not hurt much by the downturn .

Things got pretty bad around here for a couple of years for most contractors .

I like to think I made it through the last one because of the quality of my work . Just as important (if not more) is the quality of my costumers.

Iím small time , not getting rich but , still making a living

The best thing I can say is hold on to your money , good times donít last forever. When times get tight , nothing is better than money in the bank.
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Old 03-05-2019, 09:01 PM   #4
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Re: Surviving The Next Recession


it all depends on your reputation & what kind (types) of work you can do.

managing debt is a HUGE factor.

recession(s), down turns whatever you call them did not bother me much.

however, i knew several guys who went broke.

truck asses, with big houses & big mortgages, expensive equipment that wasn't paid for, credit card debt & lots of toys that were not paid for....

and don't forget fancy car for the wife and a cowboy cadillac they drove around in....
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Old 03-05-2019, 09:08 PM   #5
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Re: Surviving The Next Recession


I'm going to post this Spec House vid here (Essential Craftsman).

He made a couple comments about getting ready for rough times ahead. You might enjoy the final drawings, too.

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Old 03-05-2019, 09:13 PM   #6
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Re: Surviving The Next Recession


i'm going to try and keep an eye on this.

it's a little over an hour from me. vinylhanger too....

3 for goldenview....

cool looking house...
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Old 03-05-2019, 09:24 PM   #7
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Re: Surviving The Next Recession


Quote:
Originally Posted by griz View Post
it all depends on your reputation & what kind (types) of work you can do.

managing debt is a HUGE factor.

recession(s), down turns whatever you call them did not bother me much.

however, i knew several guys who went broke.

truck asses, with big houses & big mortgages, expensive equipment that wasn't paid for, credit card debt & lots of toys that were not paid for....

and don't forget fancy car for the wife and a cowboy cadillac they drove around in....
Yep. No debt or little debt is nice. When debt service is 50% of your income and then your income is cut in half you're broke.

Try to see the truck before it hits you. Sell off what you don't need while you can still get something for it. Prices on any used goods including homes dropped like a rock during the last downturn
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Old 03-05-2019, 09:27 PM   #8
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Re: Surviving The Next Recession


Quote:
Originally Posted by griz View Post
i'm going to try and keep an eye on this.



it's a little over an hour from me. vinylhanger too....



3 for goldenview....



cool looking house...
You live in medford?
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Old 03-05-2019, 09:28 PM   #9
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Re: Surviving The Next Recession


Quote:
Originally Posted by griz View Post
i'm going to try and keep an eye on this.

it's a little over an hour from me. vinylhanger too....

3 for goldenview....

cool looking house...
We can all show up some day. "Who the hell are you three?"
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Old 03-05-2019, 09:46 PM   #10
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Re: Surviving The Next Recession


I survived the last one by being in a place mostly unaffected by it. Oddly enough, that place is now in a recession.

Prepping for the next one:
  • Not living like I'm making the money that I actually am.
  • Saving cash.
  • No debt except the house, which is affordable.
  • Diversifying my client base to things I'm not super interested in: fire damage, working on systems to be profitable with smaller projects, taking on some cold call jobs from clients who may be connected, instead of only the rock solid leads I already have through sources like my architect.
  • Subbing out more and more that I could shift back to in house (sorry subs, I know this strategy makes a recession doubly bad for you).
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Old 03-05-2019, 09:53 PM   #11
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Re: Surviving The Next Recession


For me it's all about having as little fixed overhead as possible and making sure that you're actively marketing to your past customers and their friends.

General marketing can work really well when everyone is searching for a contractor but it's expensive. I relocated at the beginning of the last recession and a small networking group helped me grow my sales by about 50-75% every year. When there are a lot of hungry contractors out there the word-of-mouth really makes a big difference.
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Old 03-05-2019, 10:02 PM   #12
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Re: Surviving The Next Recession


If I can make it though the last recession without as much as a hiccup, I can't imagine anything taking me out. In fact, if that was looking like it would happen, I'd just retire and as my wife says, make birdhouses and mailboxes. Lol!


Mike.
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Old 03-05-2019, 10:05 PM   #13
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Re: Surviving The Next Recession


Imo, there's no indication (except it's supposed to happen because it hasn't happened in a long time and we're due) that a recession is anywhere near. I think companies that invest (which they've been doing on a massive scale lately) won't just throw their towel in and buckle. When companies invest they are thinking about the long game.




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Old 03-05-2019, 10:07 PM   #14
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Re: Surviving The Next Recession


Quote:
Originally Posted by Unger.const View Post
You live in medford?
Grants Pass
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Old 03-05-2019, 10:09 PM   #15
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Re: Surviving The Next Recession


Quote:
Originally Posted by Golden view View Post
We can all show up some day. "Who the hell are you three?"
3 hrs travel for you.
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Old 03-05-2019, 11:08 PM   #16
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Re: Surviving The Next Recession


I can attest to this. Get good at and used to repair work. New work will be scarce and low and behold there's 3 schmucks behind every tree who will slash their bid and your tires.

Some of these jobs can be pretty bad to the point they absolutely have to be done from a saftey or health standpoint. By the time they call you it's almost too late. Been there
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Old 03-05-2019, 11:17 PM   #17
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Re: Surviving The Next Recession


Construction down turns are always local. Some will keep growing, others will flat line.

Know your market. It can be a great time to expand, but you'll need really good selling, cash, and credit.
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Old 03-05-2019, 11:25 PM   #18
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Re: Surviving The Next Recession


They say our economy is in the ninth inning......but the thing to remember is a baseball game can go 20 innings!!!


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Old 03-05-2019, 11:30 PM   #19
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Re: Surviving The Next Recession


One thing I think severe downturns do is cause you to regret the money you wasted when you were feeling good and cocky.

Did I really need XYZ? Probably not. Did I need all those vacations? I had fun, but I'm not now I can't even think about it.

You'd be amazed at the things you can do without and it could always be worse as long as the heat is on and you're not in foreclosure....it's all good
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Old 03-05-2019, 11:36 PM   #20
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Re: Surviving The Next Recession


Quote:
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One thing I think severe downturns do is cause you to regret the money you wasted when you were feeling good and cocky.

Did I really need XYZ? Probably not. Did I need all those vacations? I had fun, but I'm not now I can't even think about it.

You'd be amazed at the things you can do without and it could always be worse as long as the heat is on and you're not in foreclosure....it's all good
vacations & scheduled down time are extremely important to maintain your mental health & perspective.

so long as you didn't mortgage the farm, aka afford it, you need to do it...

it is VERY important to get a break from work. including stay at home and just kicking it....

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