Time To Close Up Shop?
Thomas Edison failed with thousands of different filaments before finding one able to sustain the light of an incandescent bulb. So don’t equate failure with being a loser. If there is a positive spin to all I have to say here, it’s that in tough times like these, going out of business may be the best thing that can happen to many contractors. They would be doing a favor for themselves as well as competitors.
Many PHC contractors who have gone into business for themselves never should have done it in the first place. Frequently the desire to be one’s own boss trumps the stark fact that a person has no clue about how to run a business and neither the time nor the energy to learn.
Many startups occur when there is more work in a particular market than contractors available to handle it. You don’t need a lot of business savvy to make a go of it during boom times; you just need to be around and work will find you. That’s the way it was in many places around the country until the last couple of years.
Now that work has dried up in those places, only the strong survive, and even some of them are struggling. That’s because weak competitors tend to weaken an entire market. Too many contractors bid for fewer jobs, which drags pricing down to a level where it’s impossible to turn a profit. Service companies are better insulated against hard times, but when new building dries up, a bunch of construction contractors inevitably try to buy their way into the service market, making it hard for anyone to prosper.
Weak contractors tend to hang around longer than they should, and along the way they make things miserable for competitors, suppliers and hapless employees. They make themselves miserable, too, along with their families.
It’s hard to enjoy your work when you see more dollar signs on the expense side of the ledger than on the income side; when liens and lawsuits occupy more of your time than estimating and supervising jobs; when you’re deferring your own paycheck in a struggle to keep those of key employees from bouncing.
And, it’s hard to enjoy your life when you don’t enjoy your work. Problems at the shop have a way of triggering arguments with the spouse. Deep down you may still love your kids, but when you come home stressed out, children acting like children can get on the nerves.
You probably don’t sleep well and you’re too busy putting out fires all day to eat anything except junk food on the run, all of which can cascade into health problems.
Closing up shop is never a simple decision. Carrots keep dangling in front of you. If only a couple of customers pay up what they owe … one plum job is all it would take to get back on your feet. Besides, you’re pretty tight with the manager of a supply house who’s willing to carry you for a long time. (What choice does he have, since you’re into them for so much already and they risk losing it all if you go under!) You still do good work and have many years of trade experience, goes the thinking. If you can just hang on awhile longer ’till things turn around …
Before shutting down, you first want to try to sell the company. This can drag on for months or even years before the message slams home that you don’t have a marketable business. You can recapture a few bucks liquidating inventory and equipment, but contractors always are stunned to find out that nobody is willing to pay much for a business whose main asset is the owner’s know-how.
Here’s the good news - they are willing to pay for that know-how. It’s ironic that failed contractors, the same people who make life miserable for them as competitors, offer one of the best solutions to the most pressing problem facing the better contracting firms. They are desperate for skilled mechanics, estimators and project managers, and most contractors who have owned a business, even a failed one, have mastered those aspects of the trade. Odds are good there are jobs waiting for you out there offering better pay and benefits, and with far fewer working hours and aggravations, than you had working for yourself.
Isn’t it time to ask yourself, is it time to close up shop?