Optimism is the correct economic plan for 2009
December 1, 2008
The December issue of Snips magazine always devotes its cover story to the year ahead. We try to let our readers know what changes they can expect next year and how they will impact their business.
In preparation for this issue, we look up data and statistics on everything from the housing market to construction starts and even employment rates. We also talk to the leaders of the major industry associations to find out what they believe will be the big challenges for the next year.
This year I wanted to do something different. The industry associations are always a valuable resource for these articles, but this time around I really just wanted to talk to contractors. I wanted to find out what their biggest challenges were over the last year, how they solved those challenges, and what they see as the new obstacles for 2009.
No surpriseWhen I started talking to contractors about their business challenges, I shouldn’t have been surprised. But I have to be honest; I was. All contractors I spoke with for our cover story (“Making dollars and sense,” page 10) said their biggest challenge this year has been the economy. And the economy will continue to be their main concern going forward next year.
Why was I surprised? I started preparing for the article before Wall Street needed to be bailed out and before banks started going belly up. I thought with each contractor I talked to, I would get a variety of answers. And I thought it would be intriguing to see how a diverse group of contractors have a diverse number of issues that they deal with.
I spoke with commercial contractors as well as residential contractors. I interviewed contractors that were doing business in very different geographic areas of the country from California to Iowa. Contractors said the same thing: The current economic climate is their No. 1 concern.
Staying positiveI believe if there is anything positive in all of this it’s the optimism of contractors. While many believe the economy will get worse before it gets better, the contractors interviewed for this month’s cover story all agree that their businesses will overcome the situation. And they will do it because they have strategies in place.
These strategies include lean operations in the fabrication shop or in the field, educating customers about higher efficiency equipment, restricting the use of company vehicles - anything that saves even just a little more money.
Maybe the best strategy in all of this isn’t so much a strategy as it is a state of mind. Chris Tulley, owner of Tulley Mechanical in San Francisco, told me that much of the situation has to do with perception. People are panicking over the economy, and that panic has a way of spreading. Before you know it, everyone is tightening the purse strings and no one is making a profit.
I’m not suggesting that we are not having a difficult economy. That is obvious. Banks are not lending money, loans are harder to come by and building owners are pulling back on projects. Not to mention that the residential construction market has all but vanished.
What I am suggesting is that very little will be accomplished by panicking. Wherever you point the blame for the current economy, it doesn’t do any good to focus on it. Now is the time to figure out how your company will still stay competitive and profitable until the economy turns around.
What are you doing?I’d really love to know what other contractors are doing to keep their businesses strong over the next year. If it is indeed true that the economy will get worse before it gets better, what plans do you have in place to keep the profits rolling in?
Even if you just have a story to share on how business has been over the last year, good or bad, let us know.
But maybe we should focus on the good. If the economic situation has a lot to do with perception, let’s stay positive. Perhaps you are one of the contractors out there that barely felt the pinch because the year has been strong all around. Let us know about that.
Tell us how your business stayed busy and profitable despite the doom and gloom that the media has been reporting on for the last few months. Maybe your stories will inspire some contractors to look forward with a bit more optimism.
Share your story by sending me an e-mail at email@example.com. Maybe we will print some of those stories in a future issue.
James J. Siegel is the associate editor of Snips.