WHO PROSPERS DURING A SLOW ECONOMY?

By Jim Mastin Sr

I was not alive during the great depression, but my father was and told me about it. A really tough time with a lot of rationing, very high unemployment, low wages if any, food shortages, etc.  But he also
told me that a lot of people actually made money and prospered during
those difficult times in our country.

The most notable was Floyd Odium who took $39,000 he had in
savings and turned it into $100,000,000 all during the Great Depression.
Others not only survived well, but made sizable sums during this
time.  Of course, others pretty well lost everything and had to start life over again.

The times we are in currently are not near as bad as 1929, but they
could sure be better. Many of you have seen your business drop in
sales to the point of getting pretty tight. Leads have stopped coming.  The phone has stopped ringing.  Isn’t anyone remodeling their homes anymore?  Maybe I should look for a different line of work.

But, I really don’t know any other trades and I really don’t want to loose my business. What can I do?

To be sure, all of us won’t become rich during a slow economy, but
some of us can survive it and have sufficient income to keep our

house, car, and provide for our families.  And maybe even take a vacation or hire an employee or expand our business.  But, how will that happen?

Basically it boils down to being a little smarter than others.  After
all, someone will have the most plumbing customers in your city, why
not make it you?  Or the electrical business, or kitchen remodeling, or
roofing, or landscaping, or …. whatever your business is.  Someone will
get the business – why not you?

First, think like a customer. What do you want in a down economy?
More for your dollar?  Better service for less?  A better quality
product for less?  Easier financing arrangements?  Less up front money?
Honest work? Money saving ideas?

Once you have thought through what your customers want, set out to meet those needs.

1. BE FLEXIBLE

Be willing to consider changes in your company profile. How you operate. How much you charge. How you schedule. How you advertise. How you stand behind your work.  How much staff you have. The hours you keep.

2. BE OPTIMISTIC

This can actually be a great time for a small company to position
themselves better.  Larger companies are suffering with excessive
overhead that they accumulated during better times.  Large payroll,
building expenses, excessive insurance, equipment leases, vehicle
payments, etc. are draining them.  Whereas the smaller, leaner business
with no real estate or fleet of vehicles to worry about can maneuver
easier and make needed changes to weather the tough times.

SUGGESTIONS:

1. People still have needs they want met, that hasn’t changed.  With winter coming on, furnaces will still break down. Insulation still needs to be installed.  Gutters still need cleaning and  repair.  This might be a good time to offer more for their money with lower prices, an added feature at no charge, or whatever pertains to your trade.

I had a call last week from a contractor that said he just finished a job that didn’t go well and he ended up making five or ten dollars an hour on it.  My response was, “that’s five or ten  dollars an hour more than you would have had if you didn’t do the job”.  We may have to lower our sights a little until the economy picks up again.

2. I was in a place of business recently and needed the product they sell, but really didn’t feel comfortable making a $2,000 purchase with the economy like it is.  I said, “Let me think about it”.   The proprietor said, “Would you be interested in 12 months to pay with for it with no interest?”  I walked out with the product.  He understood the need to be creative in these tight times and it worked.

3. Maybe offering additional services at no charge.  For instance,
let’s say you are a tile installer.  Someone calls and needs a bathroom
floor retiled, but after hearing your price feel it’s a little more than
they want to spend right now. How would this sound? “Tell you what, if I
do your new floor, I’ll also clean the grout in your other bathroom for
free.  Now that doesn’t really cost you much except a little time, and what an attractive perk for the homeowner that hates cleaning grout.

4. Have you notified all your previous customers that you have some
specials to be a help to them during these slow times.  Like we said,
making half what you normally do on a job is better than sitting at home
watching TV and making nothing.

5. Here’s a thought.  Maybe offer a reduced rate if they will take
two service calls instead of one.  One now and the other next Fall, but
at a good savings.  First, it gives you some work now, but also a
promise of possible work a year from now. You say, “What if they don’t
want me next year?”.  You still got the job for this year and at least a
good lead for next year.  Be creative!

6. When you do a job in a neighborhood for a customer, do you visit the neighbors on each side and offer your services? Or, at least give them a business card?  “No?”  Why not?  No cost involved and a great prospect,  if you did a good job for their neighbor.

OK, enough for now, you should get the idea.  If you are going to be
successful during a down economy, you need to be creative. You can’t
stay business as usual and expect things to get better.

Someone asked me why we would be trying to start a new, highly
competitive company, PreferredContractor.com,  during a recession?
Well, because that’s the best time if you have a good product with
distinct advantages to those who use your program.  Our program is
designed with no risk to the contractor (needed during this down time)
and no charge to the customer (also needed during this down time) but
still not sacrificing service, quality, and professionalism.

Sure, we won’t make as much money as the lead referral companies did
during the good times, but that’s OK.  It will come back and we hope to
be positioned better because of sacrifices now.

The best to you contractors in being creative and prospering during
this recession. Those that make it through will be in a stronger
position when things get better.

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6 responses to “WHO PROSPERS DURING A SLOW ECONOMY?

  1. You are absolutely right! Thanks for spreading the word to help change our mindsets from negative to positive.

  2. Great article thanks Jim. A lot to think about.

  3. Mighty Clean Home

    Love this article. Great ideas. I particularly love the idea of throwing in a free service when a customer books another. This will work well in our business.

  4. Good read. Creativity and lower prices for sure. Had to drop mine by 15%.

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