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.

Well, you have two options right now. You can either sit there and wait out the storm and possibly go under as many of your competitors are, or take advantage of a slower time to revamp your business.

I spoke with a few construction companies recently. Operating in California, they are struggling with the new laws that require all plans to be inspected by an architect. One family company decided to send one of the younger brothers to college to become an architect. Another company is using this time to branch out and to explore new avenues. They invested in heavy equipment and training for some crew members so that they can now offer excavation services. One older construction owner made the decision to take this opportunity to scale back his operation and pursue a lifelong dream to build custom furniture and cabinetry. He enrolled in the appropriate classes to learn the trade, and is now happily remodeling his shop to accommodate his new direction.

The point is, don’t just sit there. Use this slower pace to do the things that you’ve been too busy to address in years past. As a friend who was dying from cancer said of his enthusiastic outlook, “surround yourself with those you love and always have something to look forward to.” This economic storm will end, and a bright future will emerge. Those who will survive and prosper will be the companies that take the appropriate action now.

Here are some of the suggestions they came up with, along with a few of our own.

1. Know where your money is going, the small stuff really adds-up. If you budget more efficiently, you can potentially cut costs and allow yourself more of a profit.
2. Try your hand at reducing the price of some of the insurance policies you have to carry. Shop around and try to negotiate better prices.
3. Contractors are suffering, but so are suppliers. When they send their sales people out to charm you, see if they are willing to negotiate lower prices.
4. Try to reduce waste by recycling materials and using those small pieces you might normally throw away.
5. Do more of the project yourself instead of subcontracting the work.
6. Workers’ compensation rates vary based upon the work being completed. Consider doing the more expensive jobs yourself, or consider hiring a less expensive subcontractor.
7. Target what projects net you the most profit, and pursue those over others if possible.
8. Discretely look for other jobs while on site, you never know how one job can lead to another.
9. Offer an incentive to your customers for repeat or referral business.
10. Treat your employees well. It costs money to rehire and retrain new employees.

A smart business plan is the key to surviving this economic crisis; take a few minutes when you get the chance to reevaluate your operation and look for ways to adapt to the current conditions.