Prepare for the times to come in the construction industry that will not be good and focus on maintaining the quality labor you can find now, consultant Michael Stone advises in an article focused on the fourth quarter for Markup and Profit. Stone cautions that while times are economically good now, it would be foolish to assume these times will last.
You might think an economic downturn won't hurt construction this time because there is so much work available and so few workers. When the economy tightens up, that changes. People start delaying projects, and new home builders become remodeling contractors. Everything changes.
Stone advises that remodelers should prepare for stretches of time when the phone doesn't ring and business slows to a crawl during an economic downturn. He advises that now is the time to make sure that your "financial house" is in order so when those bad times do come, your business can ride out he downturn.
While business is good, Stone also advises, finding and keeping good employees is of paramount importance. A premium may need to be paid to afford this in the form of high wages and additional benefits.
Don't tell me you can't afford to pay higher wages or provide additional benefits. You can if you charge enough for the work or service you provide. Too many talented contractors are afraid of sales, so they fuss and worry about the prices. They think giving a low price is the way to make the sale. It isn't; it's the way to go broke.
To alleviate these costs, remodelers can work on sales presentations that address clients' fears, not your own fears. Charging the price you need to cover costs and make a reasonable profit, and making sure you receive a price that allows this is part of your job. Stone also provides additional advice on recalculating markup and job bidding to wrap up his beginning of the quarter advice.
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