March 28, 2002

7 ways to recession-proof your company

By Contractors, For Contractors

“We are about to witness the deepest depression since the 1930s,” reported Martin Weiss, Ph.D., for The Daily Reckoning.

Pessimistic as Weiss may seem, the facts lend credence to his statement. In addition to other indicators, we are seeing a downturn in the building industry. Demand for new construction and remodeling has slowed significantly in Washington and Oregon. Desperate contractors are “buying jobs” and getting into financial trouble. Many are already closing their doors and selling equipment.

Every contractor must understand how to make it through the cycles of construction activity. These cycles reward those who do what are described in this special report, and punish those who don’t.

Use these surefire strategies to immediately recession-proof your construction business and you’ll not only weather the recession, but you’ll come out on top when the economic tide reverses.

Strategy #1


In a weak economy, diversification may be your business’ best friend. The more products and/or services you can offer, the more clients you will be able to find.

But how does a contractor diversify?

I was a contractor during the recession of 1979-83. Getting jobs was almost impossible and I was about to loose my business — until I diversified. I looked at my skills and the needs in my community. I found a new niche, developed some new skills, and provided a new service, which kept my construction company alive during the recession.

During bad times as well as good times there are always needs. No matter what service you offer, with a little innovative thinking you should be able to develop several “new” offers. All of which will help keep you ahead while your niche-focused competitors bite the dust.

Strategy #2

Customer service

Not all contractors do quality work. In fact, as a group the construction industry receives a large number of complains with the Better Business Bureau, particularly during a recession.

Once you’ve started attracting customers, you’ll have to worry about retaining them so they will use you again, and in a stagnating economy that may be even more difficult. You must provide not only a high quality product, but also exceptional customer service.

When money’s tight, clients expect more for their dollar. If you want to keep their business, you must keep them happy. Refine your customer service strategy to insure that every step — from the first phone call to picking up the final check — is client-focused and effective. You may want to conduct a customer satisfaction survey or two in order to make sure your customers’ needs are being met. Also consider making your service more valuable to clients with faster delivery times, wider selections, or more flexible payment terms.

The message is simple: make your customers happy with friendly service, quality work, on time and on budget and you will recession-proof your business.

Strategy #3

Intensify marketing

One of the biggest mistakes contractors make during periods of economic slowdown is to cut back on marketing and advertising. Doing this could be most detrimental to your business.

Instead, your marketing needs to be more aggressive and more comprehensive than ever. Start by contacting past clients and simply touching base. Chances are a good number of them will have projects for which your services may be required.

Offer discounts, freebies or other extras as incentives. You may also want to set up a referral reward program for clients as part of your marketing efforts.

You also need to re-evaluate your current marketing methods. If you are not seeing some increase in sales from every dollar you spend on promotions, then you are wasting valuable revenue. Whether you use an ad in the paper, direct mailings or the yellow pages, now is the time to make sure your current marketing is cost-effective and efficient. I am often haunted by P.T. Barnum’s stark reminder: “Without promotion, something terrible happens — NOTHING!”

I recommend you become a member of the Washington Contractors E-mail Network where you build relationships and network with the best contractors and industrial professionals. You will build credibility, name recognition and position yourself to prosper once the building cycle reverses. You can also use the network to market your skills to hundreds of contractors whenever you need jobs.

Strategy #4

Be a market leader

Are you content to follow the herd? Step outside of your comfort zone and dare to lead than to follow. Set yourself apart from the competition by developing your own USP (Unique Selling Position), sometimes also referred to as ESA (Essential Selling Advantage).

What is your USP? It doesn’t really matter “what” your USP is as much as it matters that you have one.

Prospective customers MUST have a good reason to do business with you rather than your competition. It could be your superior customer service, your personality, your references, your lifetime guarantee policy, best prices or the outstanding quality of your work. You have absolutely no reason to worry about the economic slowdown or competition once your customers experience your USP. In fact, you can use your USP to ruthlessly eliminate your competitors.

Strategy #5

Adopt to technology

One of the best ways to stay ahead of your competitors is by keeping up with current technology. So if you aren’t familiar with customer relation management software or even e-mail marketing, now is the time to do so.

Current technology such as a Web site and e-mail can help your company run more efficiently and cost effectively. Plus it can open access to clients in the next city, in another county, or even enable you to compete statewide. You’ll have the potential to contact millions of people who would otherwise have never heard of you or your product/service. In a slow economy, you need all the exposure you can get.

Strategy #6

Stay focused

Nothing will damage your business more than business myopia or short sightedness. In order to stay successful, you must always keep an eye on your long term goals and objectives. You will hit rough spots, but do not get bogged down in the present. Do not make this mistake. Instead keep your eyes on your target. Stay focused. Every decision, every cutback, every improvement you make now must be beneficial not only in the present but more importantly in the future.

Think about this before you slash prices, fire employees, cut overhead, or lower your standards.

Strategy #7

Seek to improve

If you are like most people, you are content with the status quo until something disturbs it. You should be constantly re-evaluating not just your marketing plan, but all of your business strategies including policies, pricing and employee performance.

The idea is to eventually be as efficient and effective as possible so your company runs smoothly and profitably. Look closely at your competitors. Talk to contractors you respect. Read business management books. Experiment. Solicit feedback from your workers and customers.

This is what makes the Washington Contractors E-mail Network so powerful and a must have service. Picture being able to type one e-mail message describing your need, question or problem and sending it to hundreds, even thousands of contractors at the same time. Get answers the same day. Learn from the best what they are doing. Find what you need within hours, not days.

Become the most knowledgeable and “business savvy” contractor in your trade. As a member of the network you receive free online training such as “How To Be a Successful Contractor,” “Contractor Tax and Business Plans,” “Contractor Legal Kit” and an encyclopedia of valuable information and tips to help you be a successful and prosperous contractor.

By doing these things you will accumulate a wealth of knowledge and experience crucial to the survival of your business.

As you read this, hundreds of contractors in Washington are headed for extinction. Use these recession-proof strategies immediately and you are guaranteed to see assets where others see liabilities, opportunity where others see failure, and extra profits where others see financial losses.

Garry Stutz is the owner of By Contractors, For Contractors. He has over 15 years of experience as a contractor and a consultant to contractors. He can be reached at (253) 875-2272, or on the Web at

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