The question is: Will you survive? And if you answer yes, what did you learn during this bleak period? Only a few years ago, most contractors can remember having all the work they wanted, possibly even turning away jobs or bidding them so high. Not to be cruel but making in good times is not tough. Similar to the realtor who thinks that he or she is great in a booming sellers market. The real trick is surviving in the buyers market. If they fail to adjust their tactics, attitude and business plan, they tend to go out of the business.
First rule is to survive, then learn from the tough times. When things turn around-and they will-you have to be better, stronger and take full advantage of the good times that will return. The opposite is also true. You should look back at the good times and see what mistakes you made in failing to prepare for the inevitable tough times, because they, like the good times, will return again. Welcome to the world of construction ups and downs.
One of the biggest mistakes I see in good times is that contractors get too particular and allow the competition some “in roads.” A real life example that I experienced was when a medium-sized plastering contractor was subcontractor to a large wall and ceiling contractor. The plastering contractor provided exterior stucco, EIFS and veneer plaster work.
The large wall and ceiling contractor called me looking for a plasterer that would do interior plaster on only one room. I was surprised and asked why their plastering contractor was not doing the job. I was told they were not interested in something so small. That to me was a huge mistake and I told the plastering contractor my feeling. He tried to explain that a small job like that would cost too much, be a hassle and was simply not worth the effort.
“He is your customer, your biggest customer,” I said. “Why invite someone else in?”
The large contractor found another small plastering firm to do the small job. Now that the small contractor was in the door, he took full advantage of the opportunity. Times eventually got slow and the large company began to look closer at this new plastering firm and a bond began to form.
Make no mistake about it: we are in a people and service business. Yes, price is king and if you are cheap enough, you get the job. But how many of the super cheap contractors survive in tough times? You have to find quality customers that appreciate good service and quality. It is not easy but it’s worth it. When you have these customers, you have to take care of them and be the “go-to-guy.”
Another mistake made in bad times is not taking advantage of training out there; in particular the training for supervisors and management. Most of our projects are run by field guys that worked their way up the ranks and have no formal training in supervision. Today, this is critical to the survival of a company and if your competition is doing it, you will be in trouble when work picks back up. The opposite is also true: some larger companies have skilled managers that came from college with a degree in construction management but little-to-no field experience. They need some education, too. Rarely do you find a guy who is both but you can make them. Take sharp field guys who have ambition and send them to a Supervisory Training Program. The Finishing Contractors Association holds these classes regularly and the graduates become more inspired foremen and supervisors. The Carpenters Union also has supervisory programs that are intense and run by a blend of academics and field pros.
Money is tight, so a lot of companies are tightening their belts and do not want to spend those precious dollars on training. That is understandable. But when times are good, the excuse is, “We are too busy. I need them in the field producing.” You have to find and make time for this training. It will save you. The other option is to wonder why your competition keeps beating you and the customers are thrilled with their work and their great attitude.
Contracting is tough, very tough. I did it for years and when friends asked me why I did not gamble when in Las Vegas, I replied, “I am a contractor, I gamble every day.” While this sounds flippant, I was very serious. Like a gambler, when times were good, I was happy and fat; when times got bad, I was taking jobs to keep men busy and pay rent, scraping to make payroll and wondering how I would make it to the end of the year.
THE LAST WORD
That small plastering contractor who took advantage of the opportunity is now is a medium-sized firm. The medium-sized firm who could not be bothered is out of business. W&C