Were you prepared for the sudden stall as a result of the COVID-19 pandemic? According to a survey by BlueVine in 2019, 44% of small business owners had not taken steps to prepare for a slow economy. Whether or not your business was a part of this 44%, you may have been hit hard by the economic crisis and may be wondering how you can prepare for the next inevitable recession. It’s never too early to start preparing your contracting business for a slow economy. Get started now with these simple tips.
Prioritize Your Projects
It may be tempting to take every opportunity you have during and after a recession. However, according to Tom Scalisi from LEVELSET, contracting businesses are more likely to fail during a recovering economy than during a slow economy. It’s important to resist this temptation in order to keep your business up and running.
To fight this temptation, evaluate a project before accepting it by asking some questions.
- Will this project provide enough profit for my business? If no, don’t take it. The small profit will not be worth it in the long run, as you may have to pass up better-paying projects that come along.
- Do I have people with the skills needed for this project? Don’t take on projects that you don’t have the people for. Hiring new personnel is expensive, not to mention adding another paycheck that needs to be paid. Only accept projects that fit the skill sets of your current employees to maximize your resources.
- Do I have the margin for this project? Don’t take on a project just for the sake of having another project if you’ll be spreading your resources thin.
These considerations are also important to think about during a stable economy. You can’t predict when a slow economy will begin, and you don’t want to take on more than you can afford should the economy suddenly take a turn for the worse.
Part of good business ownership and operation is knowing when to act and when to sit back. Give yourself permission to be a good contracting business owner during a slow economy, just like you are when the economy is thriving.
Re-evaluate Finances for a Slow Economy
Finances are the main issue when it comes to a slow economy. Re-evaluate your finances periodically so you can be prepared when a slow economy hits. Take some proactive steps to prepare for a recession.
Reassess your partners and vendors. Will they survive a slow economy? Are they providing the best value for their services? Is there someone else who may be better for your business?
And explore financing options. Think about how quickly the Paycheck Protection Program funding went during the COVID-19 crisis. It’s going to be hard to find small business financing during a slow economy because everyone’s applying for it. Find financing when the economy is stable, so you have enough protection if the economy slows down.
And, like always, prioritize keeping your costs down. As a contracting business owner, you’re no stranger to keeping an eye on all the finances. In a slow economy, more than ever, those costs matter.
Keep Your Customers in Mind
When the economy is slow, your customers are likely struggling as well. Help them out (and, in turn, help your business) by partnering with HFS Financial to offer the best contractor financing for your clients. HFS Financial helps your customers find the right loan for them, even in a slow economy — starting with a quick 60-second inquiry form that doesn’t impact their credit.
With HFS Financial, your customers can get the funding they need to complete their projects, and you can take on the jobs you need with client payment already in hand. Contact us at 1-800-254-9560 to get started preparing your contracting business for any economy. With HFS Financial, “You Dream It, We Finance It.”