So the British Chambers of Commerce, the Bank of England, and many others are predicting that we’re about to enter a recession. What can we do about it?
On a large scale, very little indeed. If it’s raining you can’t stop it raining, unless you have some kind of superhero powers (Maybe you do?), but you can put on a raincoat, you can grab an umbrella, and you can make sure you have some interior decorating work to do.
How do you remain solvent and successful even when the economy is in the dumps, when some businesses are going bust, when the construction industry is in a go-slow mode?
One of the biggest problems in a recession is people not paying their bills. So the first thing you do is make sure all your outstanding invoices are paid, as soon as possible. The people I’ve known in the industry who’ve gone bust or quit their business, is often because a builder or some other contractor has owed them a lot of money and just not paid.
Make sure you’ve got staged terms in your contracts – weekly payments can work really well as people know where they stand. Get money to buy paint and other materials before you buy, or at least get agreement that the client will pay you back immediately.
Don’t be a bank
That brings us onto the second thing, don’t give credit. Get deposits for every job, even for regular clients if you can. Don’t just invoice at the end of a job, especially if it’s a significant amount for your business. The client has now got what they want, but you don’t. They’re in a position of power now, and you’re in a position of hoping they’ll pay you promptly. That’s not on. Don’t give credit.
Have a Plan B and a Plan C
I know I’ve banged on about this before, but always get jobs lined up in case another job cancels. You’ll know which jobs you can do that with, I always made sure that with every exterior job, I had interior work to drop into if the weather is bad.
Remain flexible, if you specialise in new builds but the housing market is stagnant, find out what else you can do, lots of people choose to renovate their existing property when they can’t buy a new home.
I break my costs down in a weekly spreadsheet, so I know what’s coming out. If money is tight, see what you can cut without having an impact on profits, but be careful about throwing the baby out with the bathwater. If you have a key employee who does great work but is your biggest cost, think very carefully before giving them their P45.
Make sure you’re visible to the people you want to buy your services. When looking for new work, your first port of call must always be your past clients. But also, make sure your website is up to date, write a new blog to freshen it up, put some interesting posts on social media about work you’ve done or are doing, or even some advice about getting properties spruced up for Christmas. If you want commercial clients, try a bit of business networking, it’s low cost for potential decent returns.
Don’t give discounts, but give options. Cash might be tight for some people but they still need work done. Perhaps that ceiling will do for another few years? Perhaps you can just decorate a few key rooms instead of the whole house? Perhaps advise something a little more relaxed and better value than that gold wallpaper… Especially if the client might be moving house soon.
Attitude is everything
Don’t batten down the hatches and hope to ride out the tempest, grab hold of the mast, put your face to the wind and ride out the economic storms with positivity, responsiveness, gusto and determination. That’s how you’ll succeed in a recession.
Want to learn more?
Find me at www.chinbadgermedia.co.uk