4 Ways to Weather an Uncertain Economy
by Bob Hasulak, Partner & Director of Operations, QuickFrames
There’s no sugarcoating it: today’s economy is looking pretty dismal. Inflation is at a 40-year peak, and interest rates have increased considerably. People are scared of how far this will go, and how it will affect them both personally and professionally. That’s the bad news. The good news is that we’ve all battled before (say, for instance, during the global pandemic) and we know how to come out swinging. To give you some help – and encouragement – here are four business survival tips for those in metal fabrication and other areas of commercial construction during an uncertain economy.
1. Put Strategy First
Knee-jerk reactions in times like these won’t help you survive, but will instead often lead to mistakes. So, before you start slashing spending, get strategic. Sit down and review your business strategy. How do you go to market? What are your biggest expenses? What products bring in the most revenue for you, and which marketing or sales tactics support them?
Try to connect the dots between your strengths and what fuels them, so you know what areas of the business to keep investing in. And remember, there’s data that shows the companies that continue to invest in future growth perform the best out of a recession. So don’t necessarily jump to the conclusion that you have to hunker down in survival mode; strategically investing in what matters most right now can be key to your business’s longevity and success.
2. Prepare for Efficiency
Many business owners prepare to get lean when the economy is shaky, but getting efficient is even better. If you take an honest look at how your team members spend their time and your overall operations, you might be surprised to find that there are numerous opportunities to become more efficient.
For example, you might start using Customer Relationship Management (CRM) software to automatically schedule appointments, create product quotes and send customer follow-up emails. This can save your sales team time, which they can then use to deliver customer support. You can also look for ways to be more efficient with your production, freight and administrative work. Simply freeing up a few hours and/or some resources per week could be what you need to get through a potential sales slump.
3. Remember the Facts
If you’re searching Google for unsettling economic news, you’ll find it. But that doesn’t mean that’s all that’s out there. In fact, the construction industry in particular is still looking pretty positive in its longer-term trajectory. So if you start feeling hopeless, hold onto the following:
> The Dodge Momentum Index (DMI), a monthly measure of nonresidential building projects in early planning, found that commercial planning gains were 24% higher in May of this year than they were last year.
> The AIA predicts a strong market recovery into 2023, with spending increasing by 5.4% this year before accelerating to an additional 6.1% increase next year. They say that “by 2023, all the major commercial, industrial, and institutional categories are projected to see at least reasonably healthy gains.”
> Construction in the warehouse/distribution center market is predicted to reach $53 billion this year, up 1400% since 2010 and representing over one-third (36%) of the entire U.S. commercial construction sector this year.
4. Solve the Pain
Finally, keep in mind that if you’re feeling the squeeze that comes with unpleasant economic news, so are your customers. Look for ways to reassure them that you’ll continue to provide them with the products or services they need, and go out of your way to be flexible when needed.
You might not be able to keep your customers’ sales high on your own, but maybe you can give them a slight discount that helps their bottom line. Or perhaps you can’t afford to offer a discount, but could you work out a deal to expedite shipping for a particularly time-crunched customer? Now, more than ever, is the time to solve their pain and support one another. Not only will it build goodwill and strengthen your relationships, but it’s also just the best way to be a good human.
We hope these business survival tips help you weather this uncertain economy, and keep your head up. We’re all in this together – and we’ll get through it together.
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