A featured part of the hit television show, “Hee-Haw,” which ran for three decades was the Buck Owens and Roy Clark song, “Gloom, Despair, and Agony On Me.” Contractors must be channeling the song, based on the conversations many contractors are having today. Despite woebegone contractors worrying that the world will end, you remain in a great industry and continue to control your own destiny. Here are a few things you should do.
Take Media Reports With a Grain of Salt
The latest misery report was Fitch Ratings downgraded U.S. credit from AAA to AA+. The talking heads rushed to the screens to talk about how unprecedented this was, except it’s not. S&P downgraded U.S. credit in 2011 and aside from a week of panic, nothing really happened. Nothing is likely to happen this time either.
"But, but, but, BRICS and the alternative currency," the talking heads scream. They’re even making it gold backed. Maybe. Still, the power behind BRICS is China. In the long run, who will be trusted more, the U.S. or China? We may have our problems, but we are hardly an opaque totalitarian state who seems to get ahead through intellectual property theft, slave labor, and bribery.
Bad news sells clicks and that’s what the media wants. “If it bleeds, it leads” applies just as well in the digital media age as the older print media age.
Focus on Your Personal Economy
Coming out of the Covid lockdowns, the economy has behaved strangely. The metrics are often contradictory, pointing in different directions. Is the data bad? Are we measuring the wrong things? In times like these, trust your instincts and look to your local market, not the national economy.
Whenever there is an economic rough spot, there are always companies that prosper. The leaders in these companies focus on their personal economy. If there is a recession, they choose not to participate. It is easier to say it than to do it, but it can be done. Make this a time when you set the stage for exceptional growth moving forward out of any troubled economic times.
Remember: People Must Have Heating and Cooling
Many consumers are getting smacked by inflation at a time when they are worried about the future. In this environment, some will defer change outs, especially when government mandates and supply chain issues have raised the price of equipment significantly. Nevertheless, people must stay cool and they must stay warm. Thus, you should expect more people to opt for repairs.
While you prefer for a homeowner to replace an old air conditioner, a repair is not necessarily a bad thing. If you are priced right, which is a big if for most contractors, you will make money on repairs and benefit down the road from the replacement sale to boot. The key is developing a strong customer retention program, staying in touch with the customer, and staying top-of-mind so that you get replacement next year or the year after that.
Repairs are like base hits in baseball. While it’s more fun to swing for the fences, a few base hits accompanied by good base running will score runs just as surely as hitting it out of the park. It just takes a few more trips to the plate.
Stay Flexible
Business flexibility involves keeping costs controlled and conserving cash. Look twice at any investments that increase your overhead structure. Start hoarding cash (and pull it out of the business to make the business less attractive to tort attorneys). When you pull cash out, keep it semi-liquid so that you can inject it back into the business when opportunity comes knocking.
It tough times, there are lots of opportunities available to people with cash. You may be able to pick up a competitor (essentially, buying a customer list) for a song. You might be able to grab some attractive real estate at below market prices in a prime location for building your new office. Stay alert. Stay liquid. Stay flexible.
Stay Focused on Fundamentals
Now, more than ever, basic business fundamentals are important. You cannot do anything about the economy, but you can shore up your company’s business fundamentals.
Avoid anything that steers you off course. Avoid the negative contractors who sing the “Hee-Haw” song…
Gloom, despair, and agony on me
Deep, dark depression, excessive misery
If it weren't for bad luck, I'd have no luck at all
Gloom, despair, and agony on me
Also, avoid the contractors-turned-consultants who offer the super-duper double secret success pills for a mere four or five figure investment. If it seems too good to be true, it probably is.
Stay the course and far from gloom, despair, and agony, this can be one of the most exciting and rewarding times in the history of your business.
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