This image is from the State of Kentucky's Construction Partnership Program. I don't cite "connect with government programs" in my narrative below about how to survive a recession, because I've found (in my experience) these initiatives seem to deliver less than the publicity material they produce promises. But I can always be proven wrong.
It's just before 10 a.m in Vancouver -- our weekly staff meeting commences at 1:30 pm eastern time, meaning the meeting is just about a half hour away. Early this morning, Vancouver time, I wrote a story about the state of the North Carolina construction economy; in a few minutes, I'll be connecting with our staff for our weekly review.
The gap in geography isn't that great in a global sense, of course -- we are all in North America and the time zone gaps are really not as bad as if I were in Singapore. paradoxically, the economic perspectives aren't that far off as well. The Ottawa area and the West Coast of Canada, along with North Carolina, appear to be weathering the current economic crisis quite well -- sure there is a slump in the residential real estate market in North Carolina, but in all three areas the commercial and infrastructure side of the marketplace remains healthy.
As I pointed out in my last posting, the reality of the construction business is that while it is obviously affected by national and global forces, it is distinctly local in nature -- meaning that even when things are truly difficult in one part of the country/globe, things can be booming in others. This is good news if you are fortunate enough to be in the right areas. But what if you aren't?
Here are your options:
- Hunker down, reduce your costs and payroll so you can remain in economically positive territory -- if necessary, virtually shut the business down except for some maintenance work (which you can do yourself). While this may seem to be a painful option, if you plan things right, you can weather the storm and retain your business for better times;
- Find new clients through effective sales and marketing initiatives. If you have been used to bidding jobs, or relying on a backlog of word of mouth referrals, you may be able to substantially improve your business by attracting new clients through effective sales and marketing. The challenge is doing this right -- you don't want to throw good money after bad on ill-conceived marketing campaigns, and (as in any circumstances) if you are the least bit desperate, you may make big mistakes, either falling for marketing 'cons' or simply failing the patience test required for most marketing campaigns.
- Expand to new markets geographically or by economic sector. Again, you need to be wary of the risks here -- you can be digging a bigger hole for yourself if you step into areas where you lack experience or comfort.
- Plan a strategic combination of the choices above -- considering your choices and building fail-safes into the picture.
The latter expense, by the way, is one of the last I would cut. Back in 1991, at the height of the early 90s recession, I considered briefly cancelling my membership in the Greater Ottawa Home Builders' Association. I decided to hold on -- and, a few months later, received a call, out of the blue, inviting me to prepare a proposal for a new association publication. "Will there be competing bids," I asked. "No, you are the only member in the classification to do this type of work, and the association follows its motto: 'Be a member -- Do business with a member" in its own practices." We continue to co-ordinate the publication of The Impact! more than 15 years later.
Yes, the construction industry is local, but the world is global. Keep your eyes open, your mind alert, and you'll make it through the hardest economy with your business intact and in good shape for the recovery ahead.