How to Make Your Business Recession Proof
Reverse the ingrained ideas that others follow
I used to think that during difficult economic times, you need to hunker down, save money, and wait for the economy to turn. Back in 2008, a large number of contractors used this approach. Unfortunately, many of these companies fell apart and didn't make it.
Let me introduce you to this fundamental business principle: you can never save your way into prosperity. Similarly, you can't cost-cut your way to growth, nor can you expand your company by hiding in it.
Learning From 2008
When the economy slows and times are tough, it's much harder to rely on referrals. Many customers become more price conscientious, competition tightens up, and margins shrink. As a result, businesses collapse by the thousands, which is what happened in 2008.
Keeping Your Company Afloat
The truth is you can only spend your way to wealth. Don't get me wrong, you must be smarter, more strategic, and more precise in the way you spend your resources. However, if you want to want to survive, you must learn how to spend well for maximum returns.
Now spend on what? That's simple…marketing! It is the only way to grow your business, especially in tough economic times. We're currently writing after the last recession, and the economy has taken a turn for the better. There are now so many job opportunities for contractors.
Preparing for the Next Recession
However, with every business cycle, there is a turn. The question becomes, will your business be ready for the next recession? To be prepared for the next downturn, you must shift your mindset. You must go out and create your own opportunities instead of just passively waiting for work.
When economic downturns occur, media makes it seem like it is the end of the world, but it can be a very positive thing for your construction business. Warren Buffet says, "I make it a goal to be greedy when other people are scared and stupid."
Do you find Marketing frustrating? In our experience, we see contractors fall into some common pitfalls you should avoid.
In our next article, we will help you understand what a marketing plan is, and share some key points on how to improve your marketing. Look for the article, “The Importance of Marketing.”
