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Columns

Five Tips For Surviving In Bad Times

By Jim Olsztynski
October 1, 2008
This is not a time to erect barriers between customers and your business.

We are in a terrible economic environment and many of you are feeling the pinch. There’s nothing you can do to increase demand for your work, so the focus needs to be on landing a larger portion of the work available. Here are some ideas for doing so.

1. Less can mean more. The natural tendency for contractors when work slows down is to frantically chase any jobs around. Projects that might have had a handful of bidders a year or two ago now may have a dozen or more. The marketplace comes to resemble a shark feeding frenzy, except nobody gets enough to eat.

Long ago I read of a study that maintained when there are a dozen or more bidders on a construction project, it’s virtually impossible for a contractor to turn a profit. That much competition will drive the bid prices so low the only way to win is to make an estimating mistake.

So instead of joining the feeding frenzy, look to nibble on little market niches that may be underserved.

During the early 1990s, the construction market in California hit the skids. I was attending an MCAA convention back then when I struck up a conversation with a rather small member from Southern California, and asked how he was weathering the storm.

He told me work had dried up almost completely when he got an opportunity to handle a parking garage project. There wasn’t much to the mechanical scope as I recall, just drain piping and a little bit of ventilation, but none of his competition was interested in the job and his firm took on the project, which turned into a slew of similar jobs around the region that he said kept his company alive during the downturn.

Caution - if the reason you decided against pursuing certain jobs was you didn’t trust the owner or GC, that’s still a good reason to avoid them. More so now than ever.

2. Do what you do well. Every business does some things better than others. What’s your specialty?

Define for yourself what your business specialty is. Then start promoting your company as the problem solver in that line of work.

3. Take the initiative. You can’t afford to wait for the phone to ring. Make it happen.

Network like crazy and collect business cards from influential people until your pockets can’t hold any more. It’s more important to collect business cards than to give yours away. That’s because you have no control over what they do with yours. Most will discard them or file them where they’ll never be seen again.

But once you have their contact information in hand, you have the ability to follow up with e-mails, phone calls, mailings, personal notes, business leads, etc.

4. First impressions last. Making contact with influential people is like getting fish to notice your bait. The bigger challenge is convincing them to strike and then landing them in your boat.

You can put in hours of schmoozing to get the phone to ring with a potentially lucrative business deal, but then a phone receptionist with a lackadaisical or surly attitude can kill it within seconds.

Customer courtesy and customer service are always important, but critically so when times are tough. Make sure everyone in your company who comes in contact with customers is trained to put on a happy face and make customers and prospects feel good about doing business with you.

Assume that every phone call, every conversation, could be the one that turns your life and business around.

5. Make it easy to do business with you. I’m astounded by the unnecessary barriers many businesses put in place between themselves and customers. Not long ago I needed to pick something up at a local lawn and garden center, and called a little before 6 p.m. to inquire whether they were still open. “We close at 6,” said the lady answering the phone. I told her I could be there within 10 minutes and if she’d mind staying open just a few minutes longer. “Sorry, we close at 6,” came the stern reply.

Guess which lawn and garden store never gets another dime of my business? This is not a time to invoke stupid rules and rigid company policies. If a customer’s needs are inconvenient to you, bend over backwards to alter yours to accommodate theirs.

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Jim Olsztynski is the former editorial director of Plumbing & Mechanical.

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