Times are pretty darn lean in the remodeling and construction trades right now. Unfortunately for many contractors, it’s time to cinch that proverbial belt a few notches tighter. But the only way to tighten a belt is to let some fat go. This can be a harder choice than you might think when it comes down to it. In the interest of relieving stress, here are five suggestions for things that can go…at least for now.

1. Advertisements. If the money is there, then advertisements are an excellent way to get the word out, but recessions are more about intimacy and word of mouth. Many homeowners want to remodel but are tentative about spending the money. In such cases, a handshake and some expert conversation are more likely to yield trust and a contract than the flash and flare of an advert. Start with recent or other past clients. Maintaining a relationship with one client often extends to others by association. Then, when cutting down your advertising budget, test out which outlets work best for you before deciding what to slash off the budget.
2. That Extra Truck or Trailer. There’s no need to go out and pawn tools, but that other heavy duty truck you bought during the boom that costs $500 per month could probably go. A contractor needs his truck, but two? The same goes for trailers and other superfluous equipment. It’s all part of trimming the fat and balancing a budget.
3. Office Space. It’s probably getting hard on a lot of contractors to pay for separate office space. As much as we all hate to see empty buildings lining city streets, is an office really necessary for your company? Perhaps it is, but many contractors could just as easily handle paperwork at home, especially since most meetings are held on job sites anyway.
4. The Warehouse. If you can do without an office to answer phones, can you go without a storage facility? If you (or your employees) have some extra time, it may be worthwhile to re-inventory all the extra material from jobs past, old tools, equipment, etc. that is collecting dust. You may even find a way to eliminate a costly bill, or at least downsize to a smaller unit. If your storage is your backyard, then consider it yard work.
5. Extra Help. It is hard to lay off employees, especially those that have been long-standing and loyal. I personally have been blessed in the past by contractors who did anything they could to keep me off the unemployment rolls. Still, even without laying anyone off, there are things many contractors can do without hiring anybody new. Take, for instance, answering your own phone or doing more of the leg- and paperwork. It’s not always easy, but if it were they wouldn’t call these hard times.

Tags: budgeting, business plan, contractors, cutbacks, cutting losses, economy, financial management, staying afloat, tips

This entry was posted on Tuesday, March 3rd, 2009 at 2:11 pm and is filed under Industry News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.