Any business owner in the trades will tell you that running a small construction business is challenging. When circumstances get tough, running a business becomes an even greater challenge. During difficult times, many small businesses folded under pressure. They simply weren’t able to keep going. But many businesses have survived these incredibly challenging circumstances. Some of them have even thrived. The point is that your business can make it through hard times. You’ll need to get creative and take decisive action. And you’ll need to make tough decisions, but you can do it!
Manage Your Mindset
If your construction business is struggling, it’s absolutely essential to manage your mindset. When things get tough, it’s easy to enter a downward mental spiral. As you work to stabilize and turn around your business, it’s important to maintain a positive mindset. A positive mindset means that you resolve not to give up. Almost every great business leader has endured struggles similar to yours. They are successful because they persevered and were resilient. If you want your business to succeed, you need mental toughness.
Focus on Your Customers
What is at the heart of every business, including yours? Customers. If you don’t have customers, you don’t have a business. Check in with customers to see how they are doing and if there is anything you can help them with. Let them know you are there for them if a need arises. People will remember the actions you take. If you focus on serving your customers, even at the expense of a little profit, you’ll build up a tremendous amount of goodwill.
Manage Your Cash Flow In Your Construction Business
Not having enough incoming cash is one of the biggest reasons small businesses go under. As much as possible, pay attention to your cash flow. Use software such as Quickbooks for job costing to determine the profit earned on each project. Send out invoices in a timely fashion and follow up with customers who fall behind on payments. Ask your landlord for a rent decrease, and ask vendors for better terms. If you feel as though you need to lay people off, look for ways you can reduce employee hours or compensation instead. Pay your bills on time and try to plan accordingly for purchases. If necessary, sell assets to bring in cash or get a bank line of credit.
Conduct a SWOT Analysis
A SWOT (strengths, weaknesses, opportunities, threats) analysis provides you with a framework for analyzing your business. Carefully consider each area of your construction business in this framework. Do you excel at customer service? Are you handling change orders properly? Does your job costing indicate you need to raise your prices? This SWOT analysis will help you overcome your weaknesses, capitalize on your strengths, and take advantage of unique opportunities.
Create Objectives and a Plan
Once you’ve done a SWOT analysis, determine the objectives you’ll pursue and create a plan for achieving those objectives. This plan will give you the clarity you need to move forward. Start with your strengths. How will you double down on the things you’re already doing well? Then look at your weaknesses. How can you change, minimize, or even eliminate these areas? Move on to opportunities. Is there a new market you can move into? Can you implement a new technology that will help you be more efficient? Finish with threats. How will you avoid or adapt to those things that could hurt your business?
Be Persistent, Be Creative, and Pivot
Successful construction businesses persist through challenging times and come up with creative solutions to difficult challenges. Sometimes they even shift to a completely different business model. Some will partner with other trade contractors to offer new services. There are numerous ways you can pivot your construction business: Utilize new sales channels, segment your customers, or change your pricing and positioning.
Meet With An Expert
As you work to stabilize and strengthen your business, you would be wise to meet with a certified bookkeeper. A bookkeeper can crunch all the numbers for you and then provide you with relatively easy-to-digest reports, help you with job costing, and implement money-saving tax strategies. Also, a bookkeeper can help you think through critical financial decisions.
The reality is that every business faces challenges. These difficulties don’t need to sink your business. Don’t give up. Persistence produces success. If your business needs help –let the experts at Working Numbers get your books organized.