For an online tutorial about the definition of a recession, this How Stuff Words posting about the Fed is useful.We're in the early stages of a recession. Anyone who denies this is putting their heads in the sand. You can see the outline of the problem on various online forums, as contractors (especially in the residential sector) report business drying up. We shouldn't be surprised about this -- the overbuilding and mortgage crisis seen as one of the 'root causes' of the current recession obviously will have a backlash within the residential construction sector, and quickly.
In the commercial and institutional side, things aren't as imminently bleak -- the projects often have a longer-range budgeting scope, and in some areas, infrastructure and government spending will offset the decline within the private sector.
So what should you do? I've posted some general ideas previously, but will update in periodic blog columns strategies that can work to help out. Simply put, you either need to increase your revenues, or reduce your costs, or both -- and be very wary of debt and capital depletion.
So lets look at increasing revenues. You need to market and sell, inexpensively! So, what is the best way to sell more?
Your first line of defence are your existing/previous clients. Keep in touch. I'm a writer, so I like newsletters, both printed an e-letter format. You don't need to be a great writer to produce a newsletter. But you can also call them, meet them socially or visit.
Networking and canvassing can work. Networking is usually slower (done right!) but can lead to high quality results. Canvassing is a drag emotionally for most people. I think it is debatable to try canvassing techniques for business-to-business sales, but in the residential side it can work.
Internet advertising, either paid keywords or through organic search marketing, will produce high results at low cost (and with great budget control) if you do it right. The challenge here is you either need to learn how to do it yourself, or you must be very careful to select the right consultant/marketing service to help you (alas, the best ones don't need to advertise or promote their businesses.). Do it yourself isn't that hard; Google Adwords has tutorials, and blog sites can be built quite easily and quickly.
In the commercial and institutional side, things aren't as imminently bleak -- the projects often have a longer-range budgeting scope, and in some areas, infrastructure and government spending will offset the decline within the private sector.
So what should you do? I've posted some general ideas previously, but will update in periodic blog columns strategies that can work to help out. Simply put, you either need to increase your revenues, or reduce your costs, or both -- and be very wary of debt and capital depletion.
So lets look at increasing revenues. You need to market and sell, inexpensively! So, what is the best way to sell more?
Your first line of defence are your existing/previous clients. Keep in touch. I'm a writer, so I like newsletters, both printed an e-letter format. You don't need to be a great writer to produce a newsletter. But you can also call them, meet them socially or visit.
Networking and canvassing can work. Networking is usually slower (done right!) but can lead to high quality results. Canvassing is a drag emotionally for most people. I think it is debatable to try canvassing techniques for business-to-business sales, but in the residential side it can work.
Internet advertising, either paid keywords or through organic search marketing, will produce high results at low cost (and with great budget control) if you do it right. The challenge here is you either need to learn how to do it yourself, or you must be very careful to select the right consultant/marketing service to help you (alas, the best ones don't need to advertise or promote their businesses.). Do it yourself isn't that hard; Google Adwords has tutorials, and blog sites can be built quite easily and quickly.
Be cautious about lead services. Read this ContractorTalk.com thread before using some of the services that market and promote themselves widely. There is much controversy a bout the lead services' ethics and value. Also, in a recessionary market, more people are chasing fewer leads, making for a truly rough environment.
If you are a professional or consultant, you need to achieve visibility in the right places, by speaking at conferences, in media appearances, with trade magazine articles, and the like. This won't produce instant results, but will pay off long term.
So, in the residential sector, if you need a quick fix, I'd work on cultivating and recontacting existing clients either in person or by newsletter systems -- or better, both. You can also consider canvassing and some keyword/Internet marketing.
These quick fixes won't work for you in the ICI sector -- the lead time for projects is usually too long -- so you need to start planning your visibility/relationship development and marketing strategy right now.
(Note: Especially in the commercial sector, you must be very wary of your existing clients' solvency and bill paying ability. The worst thing that can happen to you is to be in the mist of a project when things go bust and you a re left as an unsecured creditor, or are caught waiting months or years for liens and litigation to clear.)
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3 comments:
The concept of marketing in challenging times is in my opinion, a mistake.
Every economy has it's ups and downs, with some downs resulting close to, or an actual recession. But even during a recession, TV sales do not stop 100%. New construction does not stop 100%. Sales of refrigerators or dryers do not drop to "0". Nor does remodeling come to a screeching halt, with "0" sales done anywhere.
Someone, somewhere is still buying at least 70% of what was being bought pre-recession. Know who the are "pre-recession."
One would have to be brain dead (some business owners are) to get in a row boat with out oars, plan to drive 100 miles when the gas tank gauge reads: "E", or go to your local grocery store for your weekly groceries can buy one slice of bread, one egg, and one slice of baloney.
Any one with a live brain in charge of the family's groceries would plan for a week or more. Like wise, any business owner with a live brain would plan for the ups and downs of his economy. And at least be able to see what's coming. I'm sure he's at least aware of the term "economy."
Of course, if he doesn't watch the news, never reads a magazine other than Sports Illustrated, or never visits any financial web sites, I guess he is brain dead, at least to the world of business.
By the time the economy turns down, it's too late. All one can do, by then, with no cash flow, and probably depleted working capital, is sell at cost or less. Maybe, just maybe, he might be able to recapture some fixed overhead expense monies.
I was one of those brain dead back in 1981 when interest rates went up to about 22%, and within 3 months, business came to a screeching halt. So I advice to my peers is to not live for today. And do not plan for today. Live and plan for 2, 3 or 5 years from the present, whenever that "present" happens to be.
Sonny, sometimes I think many businesses live "paycheck to paycheck" just like much of the population. Intriguingly, one of the most predictable eleemnts of our business is the 'cash flow crunch' in January. For about two months this time of year, receivables become very hard and slow to collect -- kind of like the businesses are on a post Christmas diet, just like many consumers.
(Of course we plan and expect this, so are not too surprised. The good news is we've worked around the formerly deadly February sales slump. It was a 'killer' in previous years.)
Sonny, sometimes I think many businesses live "paycheck to paycheck" just like much of the population. Intriguingly, one of the most predictable eleemnts of our business is the 'cash flow crunch' in January. For about two months this time of year, receivables become very hard and slow to collect -- kind of like the businesses are on a post Christmas diet, just like many consumers.
(Of course we plan and expect this, so are not too surprised. The good news is we've worked around the formerly deadly February sales slump. It was a 'killer' in previous years.)
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