Be a Business Prepper | Subcontracting company
Preppers are people who think about and prepare for disaster, whether natural or man-made. While some view them as the jobs of paranoid lunatics, preppers view their efforts as just a form of insurance.
If we are not already in a recession, we soon will be. The signs are everywhere. Stocks are in a bear market. Inflation is out of control and the Federal Reserve is signaling that big rate hikes are coming. The Fed will try to massage it for the proverbial “soft landing”. It’s better to prepare for a hard shock and be over-prepared if it doesn’t come.
Given how the service and replacement side of the industry weathered COVID in 2020 and 2021, as well as the record profits enjoyed by many contractors in
1. Adopt an aggressive mindset
An economic downturn doesn’t need to affect your business. Let it affect your competitors. Decide now that when there is a recession, you will refuse to participate. It sounds simple, but of course it isn’t. It takes a steely mindset and a determination to fight through the challenges. You will be helped by the fact that
2. Identify your business sensitivity
Think about the worst thing that can happen to your business. It can be the loss of a major account, a salesman or technician who is raining, or a simple crash in demand. While you would work hard to overcome the loss, estimate the cost in gross profit if you took no action to replace the lost business. If you are still profitable, you can sleep easier. If you are not profitable, decide in advance what steps you can take to at least break even if the worst should happen. Then, work on creating other revenue streams to give your business more revenue diversity.
3. Accumulate money today
Today, when the weather and sales are hot and margins are high, keep a little more perspective than normal. Make the big investments, but reduce
When the recession hits, having a little extra cash on hand will comfort you.
When the recession hits, having a little extra cash on hand will comfort you. Remember, money is not cold and hard. He is warm and soft and you can cuddle him.
4. Exercise your line of credit
If you don’t already have one, get a line of credit from a local bank, the one where you can establish a human relationship and build trust. Periodically exercise the line of credit and pay it off in a month or two, even if it costs you a few interest points. Like your muscles, your line of credit will atrophy if you don’t exercise it.
A big drop is a contraction of 3% to 8%. Enough market to constitute 3% to 8%.
5. Keep Calm and Carry On
When things do go wrong, your team will know. If you show a little fear, they will feel terror. You need the whole team to Bring together and focus on business challenges. If they are terrified, they will worry about their work, be depressed and unmotivated. No matter how you feel on the inside, you should appear unfazed, positive, and cheerful on the outside without being Pollyannish. Admit there are challenges, but show confidence that you will beat them if everyone unites.
6. When sales slow, market more
When it gets harder to find a client, you have to work harder, although most entrepreneurs do the opposite. That’s good for you. Try harder, more
7. Look for bargains
In times of recession, there are good deals to be had. Some entrepreneurs will close shop. Be prepared to buy businesses with good customer lists. If you run out of money or financing for an outright purchase, ask the seller to finance or pay a commission on sales to the seller’s customers over the next few years.
Matt Michel is president of Service Nation and a member of the Contracting Business Hall of Fame. You can reach him at [email protected] or 214.995.8889.