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Monday, May 25, 2009

Painful (but necessary) choices

Today, I'll take some hard and painful business decisions.

It is never easy to reach the point where you know you must hunker down and reduce costs drastically in line with much reduced sales projections, but every business knows there are red lines which must not be crossed, without dire results.

These circumstances of course have affected many of you over the past year. Architects and engineers, early in the construction cycle, were the first to feel the pinch (after many residential contractors and sub trades). Now, as backlogs disappear within the non-residential environment, general contractors are feeling the pinch. Surety brokers tell me that bonding companies generally run into problems about 18 months after a recession begins -- as some contractors default, pushing them into losses.

Well-managed companies either have reserves and/or contingency plans for hard times.

What about the marketing budget?

Our major marketing expenses is association membership and dues, and we'll review the "value for money" in these. We are also curtailing our travel costs for events and conferences. However, we won't overall reduce marketing resources and, when we are satisfied there will be a return on investment, will increase our marketing commitments.

Successful contractors with solid marketing strategies increase their marketing budgets in hard times. Unfortunately, few businesses and professional practices within the AEC sector have really good marketing systems, closely tied to lead development and sales.

If you have trackable and measurable systems, you can simply increase your advertising budget to maintain your lead flow. But you can't do this by the seat of your pants.

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