How Entrepreneurs Profit During Slower Times

by George Hedley


True Or False: The recent elections will not help your business in the near future? The slower economy is here to stay for at least one or two years? Your business must change or die a slow death?

 

So, how are you doing? How's your business, cash-flow, stress level, and personal life? The economy got you down? Do you feel slightly out of control? Or wish things would get better sooner rather than later? Are you working harder than ever, but can't get ahead? Do you think there must be a better way? Don't know what to do next? Do you feel like you are treading water waiting for something to happen?

 

In a slower market, when you continue to do what you've always done, you'll find it eventually doesn't work and won't deliver the same results you are used to achieving. So it's time to let go of your past and face the fact that the future will be different. And only the nimble, quick, and strong will be successful. Look at the car manufacturers trying to change their business plan. Too late. It's over for them as they have know it for 50 years or more.

 

Survival is bad!

I have a real estate broker who has a sign on his desk: "Survival = Success!" Is survival your goal? Are you in business to survive? Are you in business to make little or no money, not grow, keep the doors open, keep your crews busy, and spend all of your savings waiting for the economy to turn around?

 

You must change how you do business to thrive in the years ahead. Golfers know what 'mulligans' are. They are second chances to re-hit your shots. But in the real world, you don't get a second shot. Every day you face reality of the slow economy and tough business climate. Either improve your swing and try something new, or continue to hit your shots into the rough and your score won't improve. The booming economy handed out lots of mulligans when many companies delivered average performance and poor results. It gave them a second chance with their customers and contractural requirements. But now companies won't get any mulligans for a long time. This is the real deal, no "take-overs"! You must get it right every time the first time. Welcome to the PGA tour where you can't rest on your past performances to pay your bills today and keep you at the top of the money list.

 

To thrive, will you work harder, work smarter, work more, get organized, get in control, try new ideas, or work different?  To do business differently, you'll have to improve how you do business and change how you work with your customers, implement your marketing plan, deliver your projects, and elevate your level of quality and service.

 

Change = growth = improvement!

Remember when you learned something new like ride a bike or learn the computer? It was hard and caused you some pain. But with training and diligence, you succeeded. And now these tasks are like second nature and easy. Change is good and allows for growth and improvement. Without change, nothing new happens, you stay put, and go backwards.

 

Do you have to change? The old way still works, doesn't it? YES, you have to change! I know you don't like to change. You want the economy to go back to its' old steady ways. But I'm sure your goal is not to strive for stability. Today, change is the norm. Change is not something that happens to you. Change is what you must do to continue to make a profit, grow your business, and expand your customer base.

 

In the old days, you only had to make one or two changes every few years. Like buying a new adding machine, upgrading your typewriter to an electric model, buying a fax machine, changing from a yellow pad and pencil to a computer spreadsheet, changing from a dot matrix to laser printer, moving from Lotus 123 to Excell, buying a new pickup truck, adding a laser screed to your concrete tools, or attempting to use email to communicate.


As a part of your ongoing business management role, what do you do to plan for change, make change happen, and force change to happen? The companies who wait for something to happen die off. Look at Sears. The leaders never thought their business model would ever need to change. They hoped Wal-Mart would never catch on. To date, they still struggle to get back the market share and customers they lost while waiting and doing nothing new or different. How would you have liked to be a steel golf spike manufacturer hoping soft-spikes didn't sell? You would now be broke and without a company.

 

The second part of changing how you do business is to have a pro-active plan to stay ahead of your competition and abandon your old ways of doing business. Ask yourself: "What leadership decisions should you make, but you won't? Why not? What are you waiting for?" You have some tough calls you need to make right now:

- Do you have a customer you need to fire?

- Where are you wasting money?

- How can you be more efficient?

- What improvements are needed with your staff?

- Is there a faster way to complete your projects?

- What can you delegate or let go of?

- What should you stop doing?

- What should you start doing differently?

- What areas should you improve or change now?

 ___ customers             ___ personnel

___ management team  ___ training

___ quality workmanship          ___ service

___ scheduling              ___ sales & marketing

___ estimating                          ___ technology

___ subcontractors                   ___ suppliers

___ productivity                       ___ financial systems

___ operational systems            ___ field systems

___ project management           ___ equipment

___ banking                             ___ bonding

___ insurance                           ___ your paycheck

 

Change your view!

You can't get better and improve by spending time talking to same 5 to 10 people for 5 to 10 years in a row. You have to change your view. Get up, get out, and go see new people, markets, cities, customers, and companies. Your goal is to learn and experience new ideas and ways to do business. Read new books, different magazines and hang out with different people. A new outlook will get you moving.

 

When you are stuck in the same place, it's hard to get unstuck. Most people don't realize they are stuck. Are you stuck? Year after year you:

- Call on same 10 customers.

- Bid the same project types.

- Use the same proposal format.

- Use the same subcontractors & suppliers.

- Use the same software.

- Keep making the same excuses for the same employees

- Use  the same tools & equipment.

- Use the same bonus & pay system.

- Use the same marketing program.

- Use the same sales system.

- See the same people in the same places.

- Drive to and from work the same way.

- Try to make a profit by selling low price.

- Listen to the same complaints, all day, every day, over & over.

 

Treading water?

When you're stuck, the problem with most people is they don't know where to start. They continue to tread water, stay frustrated and paralyzed, and can't make decisions about what to do first with their sinking situation. I played water polo in high school and college. In water polo, like most team sports, the team that wins usually takes the most shots, has the most unique plays and uses different ones often, has the best players and changes them often when they aren't performing, has the best strategy and changes it often, outplays their opponents with different techniques, and always keeps moving. Winning teams don't just tread water and wait for something to happen.

 

As long as I can remember, I wanted to be an entrepreneur. I always wanted to start my own company, be my own boss, and make it on my own. Entrepreneurs are different than most people. Entrepreneurs are builders, risk takers, and make things happen. They are creators, always growing, and looking for new opportunities. Entrepreneurs are always on the move, trying new things, and don't get stuck in the same place doing the same things. They never tread water waiting for something to happen.

 

Entrepreneurs know what they want and have a clear picture of what they want to happen. They have written plans to achieve their goals. And they always track and make progress towards what they want. Say you want to build a house. You hire an architect to get the process started. What's the first question the architect asks you? 'What do you want?' To build and grow your business over the next several years, what do you want and need to do to make it happen? What will you have to do to make it happen?

 

Why companies fail?

The  number one cause of small business failure is when the owner doesn't make the necessary changes required to build and sustain a successful company. They continue to tread water and do business the same way they always have. What do entrepreneurs do when they face tough times and need to make some big changes? They do something! Anything! They try new ways and work different. They start moving and call the necessary plays to win in any environment.

 

You have to make tough decisions. When one of your subcontractors asks to get paid for the 27th time without a signed change order, give him the right answer: "no!" When your project manager is over-budget again, replace him with the right person. When one of your 20 year superintendents doesn't fill out his timecard correctly for the 8th year in row, give him one last warning to do it right or don't come back. When a family member employee isn't cutting it, do the right thing and let them go. When your estimator makes another mistake on the bid, replace him with the right person and the right software. When one of your long time customers doesn't pay you on-time again, tell them never again and start looking for the right customers for you. When your accounting manager gives you the monthly financial statements four months late again, find the right controller who will do the right job. When you catch one of your employees lying to you or stealing time or money, eliminate them and find the right people.

 

You have some choices to make. You can ignore reality and continue to tread water by sitting and waiting for "it" to change and hopefully get better. Or you can make a decision to work differently.  In other words, be an entrepreneur and get back to building, or do nothing and hope for change. Here is a small list of 15 changes you can make to 're-entrepreneur' your company:

 

1. Preserve cash now!

Postpone purchases except those which will make you money. Invest in marketing, your website, sales, and customers.

 

2. Cut overhead now!

Hold a contest for your employees to find ways to cut your overhead by 25%.

 

3. Keep the best & fire the rest!

Now is a good time to get rid of your poor performing employees or those with bad attitudes. You can easily find great replacement people who want to do an excellent job.

 

3. Control job costs now!

Hold an all field meeting and ask for money saving ideas. Reward the best ideas with an incentive. Have them think about your general conditions, labor costs, productivity, safety, and schedule.

 

4. Get out of debt now!

Meet with your banker and work out a plan to pay off all of your high ticket loans. The interest rates are now lower. So consider consolidating all of your loans into one low cost payment plan.

 

5. Cut equipment costs now!

Get rid of every piece of equipment you own that doesn't make you a profit every month. If you haven't used it in weeks, sell it now. You can always rent equipment when you need it.

 

6. Subcontract more now!

Why keep extra crews sitting around waiting for the next job. Make a deal with another competitor to share your crews to keep your costs lower.

 

7. Add profit centers now!

What can you do to expand your business? A roofing contractor started a pallet company and now does over $1,000,000 in pallet sales.

 

8. Add new project types now!

To grow you must expand your project types. Go out and land some new work in new territories and project types.

 

9. Buy real estate now!

Seek opportunities to turn your built-up cash reserves into wealth building investments. Start buying a small rental property you can fix up with your expertise and crews.

 

10. Seek better subcontractors & suppliers now!

The slow down gives you the time to find better subcontractors and suppliers who will give you better service and lower prices. Do it!

 

11. Get close to customers now!

Go and visit your top 20 customers this month. Take them to lunch or to a ballgame. Get to know them better. Ask them how your company can offer more services to get more of their work.

 

12. Find new customers now!

Make it your urgent goal to find at least ten new customers in the next 3 months.

 

13. Offer more services now!

What else can you offer your customers to get more of their work? Consider design-build, pre-construction services, total team approach, partnering, maintenance, build-to-suit, joint ventures, asset management.

 

14. Bid more work now!

You will need more work to keep your total profit margin at the same level. Gear up to bid at least 33% more projects.

 

15. Have more fun!

Make a decision to stop whining and complaining about the economy, the market, your competitors, your customers, the President, or your current situation. Be positive. Look for the good in everything. You attitude is your choice. Choose to be happy.

 

Are you acting like an entrepreneur?

When you look at successful businesses and how they succeed in good times and bad, you'll notice they are focused on building their business. They focus on hitting their numbers, making a profit, increasing their stock price, purchasing or investing in new markets, seeking joint ventures, growing their revenue, finding new customers, buying new businesses, developing strategic alliances with other companies, or finding new business ventures.

 

Today is a great time to approach strugling competitors and ask if they would consider joining their compay with yours. The strong will survive. The weak shall perish. Why not take advantage of the opportunities right in front of you and do something to be successful?

 

 

 

-----------------------------------------------------------------------------------------------------------------------

 

Best-selling author and professional speaker George Hedley helps entrepreneurs and business owners build companies that work. He is the author of "Get Your Business To Work" and the "The Business Success Blueprint Series" available on his website at www.hardhatpresentations.com. His proven system to earn more, work less, build profits, lead people, and generate customers has helped thousands of companies in multiple industries.. To receive his free e-newsletter and Profit 101 report, attend a 2-day 'Profit-Builder Circle' boot camp, or hire George to speak at your next event, email: gh@hardhatpresentations.com or call 800-851-8553.

 

 

 

 

George Hedley   HARDHAT Presentations

3300 Irvine Avenue #135
Newport Beach, CA 92660
Phone (949) 852-2005
   Fax (949) 852-3002

Email: gh@hardhatpresentations.com     website: www.hardhatpresentations.com

 

 

 


George Hedley owns a $75 million construction and development company and Hardhat Presentations.  He speaks to companies on building profitable businesses, leadership, and loyal customers.  He holds 3-day in-depth "Profit-Builder Circles" open to construction company owners in an interactive roundtable format every 3 months.  His "Profit-Builder System" includes proven tools to always make a profit, build equity, create wealth, win profitable jobs, motivate your people, and enjoy the benefits of owning a profitable company.