Monday

Top 10 Tips to Surviving Economic Downturns

With the slowing housing market and the rising interest rates, many are predicting that 2007 could be a slow period for economic growth (and might end up in a recession, depending on what the Fed does and how the housing market reacts.) Here is some information to help your building or remodeling business survive any business slow down:

1 - Advertise More, Not Less: When business slows, it's not the time to completely disappear from radar. Increase your ad and marketing budget to keep your company name in peoples' minds. The few who do need your services will come to you first.

2 - Learn a New Specialty & Exploit it: When you're an expert in a field where not many others practice, you'll always be in demand. Not all professionals can do this, but it might work in your field.

3 - Expand Your Services: If your field cannot support specialists, you can add more services to your list. If you're only in new construction and you add remodeling, you could be doubling job bids.

4 - Train Your Employees: The more training your staff has, the more efficient the company can run. Cross-training helps a company run leaner, with fewer salaries. And train employees to do the job better than you so that you can focus on running the business without worrying about job quality.

5 - Focus on the Short Term: Smaller, less time-consuming jobs can create positive cash flow due to higher turnover.

6 - Cut Costs: But do not cut key employees. Many companies cut jobs and pass on the workload to others. This can cause quality problems, morale issues, and you'll end up losing trained employees. You'll spend more to retrain new workers... if you can even find replacements. Let employees know you're cutting costs and involve them in the process - they may be able to find solutions you'd never think of.

7 - Customer Satisfaction More Important than Ever: Make sure you treat your customers well no matter what the economy is like. But go the extra mile when for your loyal customers when times are slow. They'll remember you and recommend you.

8 - Convert Costs: Cut down on fixed costs, if possible. Variable costs can be managed, but steady and regular payments can hurt you when the economy heads south. If salaries are your biggest fixed cost, try to align them with performance. Incentives mean you'll pay more when sales go up and pay less when sales are down. If conditions are really bad, try to turn employees part-time to avoid losing them completely.

9 - Expand your Circle of Business: By expanding your radius, you can bring in additional jobs. Travel to additional cities can mean more opportunities. And referrals can come later when the economy turns around.

10 - Negotiate with Suppliers: With the new home construction slowdown, materials are in less demand. Many suppliers are willing to bargain with you and bring prices down, which can increase your margins.

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Read the article - U.S. Economy Update: Will the Housing Bubble lead to Recession?