5 Ways to Weather an Economic Downturn

There's no doubt about it - nearly every business in the U.S. today is affected in some way by the current economic recession. Plumbing and HVAC contractors are no exception. To see how the economy has affected you, we conducted a survey of our readers last month and here's what we found:

  • A majority (63%) of you who responded predicted a decrease in your 2008 gross revenues, while only 9% believed their businesses would see an increase in revenues.
  • Although your business outlook was more optimistic for 2009 - with 45% predicting a further decrease in revenues and 18% predicting an increase - it's obvious you believe that the economy will not recover overnight.

In this month's feature article, we offer 5 proactive ways you can help your business weather these challenging economic times.

1. Go With the Flow
Flexibility is the name of the game in business today. In other words, now may be the time to “reinvent” your company and the services you offer to help counteract the negative effects of the economy. If new construction has been your company's specialty, for example, this may be a good time to add remodeling, repair, and preventive maintenance to your roster of services. Because more home and business owners are looking for ways to cut energy consumption and costs through more efficient heating, cooling and water usage, “green” technologies may be another area to focus your company's new business efforts.

2. Keep Your Current Customers Happy
When the economy is struggling, it seems customers are even more determined to get the most for their dollar. That's why now is the time to be sure your customer service is the best it can be. Ways you can do that include:

  • Emphasize to all of your employees the importance of being respectful and responsive to every customer.
  • Be prompt about getting proposals out.
  • Send a thank you at the completion of a job.
  • Consider offering more flexible payment terms.
  • Ask your customers for feedback on ways you can improve the services you provide.

3. Employ Good Financial Practices
Good financial practices are always important, but even more so during tough economic times. Some indispensible good financing practices include:

  • Keep good records and create a budget for your business.
  • Manage your credit and stay on good terms with creditors.
  • Keep a close watch on the outstanding debts owed to your company: Be firm when needed, but willing to negotiate when appropriate.
  • Monitor your cash flow carefully and spend only on the things that contribute to the success of your business.

4. Be Proactive: Advertise!
“Without promotion something terrible happens…Nothing!” This quote from P.T Barnum - 19th century American circus entertainer who created The Greatest Show on Earth - sums up the absolute necessity for marketing. Too often business owners make the costly mistake of cutting their marketing budgets when the economy takes a turn for the worse. Yet, this is when you really need to keep your company's name first and foremost in customers' minds. This is a good time, however, to take a closer look at your marketing plan and shift your advertising dollars to the promotional efforts that have proven to be the most successful for your company.

5. Keep A Close Eye on Your Competitors
It's a good idea to keep track of your competitors at all times, but especially in a bad economy. Look into what your competitors are up to as far as pricing, special promotions, advertising placement, etc. In doing so, you can help prevent losing business because your customers find comparable services or products for a better deal.

Overall, it's important to keep a positive, proactive attitude. Don't sit and wait for the economy to turn around. Instead, search out new business opportunities. Most importantly, keep your customers happy so they'll keep coming back, as well as spread the good word about your company.