How to Maintain Business Activity During a Recession
Yesterday, one of my partners and I were dining at a sushi restaurant. The sushi chef inquired about our firm after spotting our trademark shirts. Everyone stopped talking and turned to look at me when I said, “Great.” I had the impression that I had ruined everyone’s party. It turned out that we had attended a gathering of builders who were lamenting the situation of the housing market and the economy.
My partner asked me why I thought we were so busy and getting more active every day while everyone else seemed to be failing or going out of business on the drive back to the project site. I couldn’t give him a straightforward response. I had a condensed version of a college course that lasted a semester. Until then, I had no idea how much of what I recalled could apply.
My business management professor was your standard PhD college professor who had never held a real job. I believed I was ignoring whatever he said until I discovered what I needed to do to pass the test. I’ve only just realized how many things he was correct about. His course’s core ideas are still valid. I discussed these ideas with my partner as I started to reassess our previous accomplishments and consider how we might be able to achieve even better.
Don’t ever skimp on quality. Anyone can do what you do at the average rate and survive in good times. When times are hard, clients become few and far between, and they only want to pay for the natural cream. Although customers might want to spend less, lowering prices can weaken your brand. If you maintain your focus on quality, you will lose fewer consumers than your rivals and may even steal some of their business due to their inferior service.
Customers who accept subpar service during hard times will now wait it out. Until they shut down and move on, your low-cost competition will keep decreasing their standards, improving your position in the market.
Do not forget who pays your bills. To put it another way, never skimp on service. Everyone I work with knows I merely sign the checks; the customers are responsible for their payment. Give your customers a product or service worth more than the money they are paying you, and they will continue to pay. If you or a staff member makes a mistake, admit it to the client; don’t try to cover it up. Let the customer know that you want to work with them to resolve the problem by being straightforward and honest. Twitter is now permanent, and one negative tweet can significantly impact.
Recently, I experienced a significant system upgrade, problems with other suppliers, and a system malfunction. After being down for two days and squandering 16 hours of the customer’s time, I had a 10-minute meeting with the decision-maker. I presented him with the facts without pointing fingers, outlined my perspective, and informed him of his options.
The first was that I would personally work to rectify the issue with the manufacturer and the other vendor; however, as we didn’t perform the initial labor, it would be billed time. Second, we could put the system back in working order, or third, and in my opinion, the best choice. Update the remaining components of the system to give them the most recent technology and a fresh warranty. He chose option 1, and in a matter of hours, we had the system operating at about 90% of its capacity.
The client called two days later while I was attempting to fix the final 10% and requested a quote for a complete upgrade. Even though the new system would not much improve upon the old one, he reasoned that since the latter had been in place for five years, it was time to entirely modernize. I could only reassure him that it would work more seamlessly with the recently improved parts.
You will lose the customer if you or your staff forget that the customer pays the bills. This does not imply that you must bow down or comply with all requests from the client. Also, it doesn’t mean that you should lower your bill if you make the customer wait longer. The consumer will recognize and appreciate the extra effort made if you and your team truly accomplished the best job they could, and they will gladly pay the cost. A recession is a perfect moment to retrain staff who are costing you customers or hiring better candidates.
Prioritize your knowledge. Your customer base may shrink slightly under challenging times, but you must resist the urge to take on tasks outside your expertise. You won’t be able to deliver the kind of service that your clients anticipate from you. There will be a loss of the increasingly valuable referral business. Get the expertise and tools first, not second, if you need to expand your horizons and add new items or services. The most prosperous people only excel at one thing in life; for the rest, they perform above average. For doing it, they are compensated the highest.
Continuously work to improve. I go to training with my partners at least once every other month and sometimes even twice a month. Many occasionally inquire how I can afford to travel so frequently, especially considering that the classes can reach $500 per day in addition to travel costs. “How can I afford not to have them go,” is my response. I might not get paid back in a month or even a year for some lessons, but the investment always pays off. Everyone enjoys the classes, breaks, and chances for intelligence collecting.
After a significant project, I also enjoy having a formal handover and training session with my clients. Many of my peers claim I waste my and my client’s time. I also learned from our conversation with them that I had substantially greater call-back and referral rates. I can recall only one client in the previous five years thought the ceremonial transfer was excessive. I can replace a system that was installed by someone else less than two years ago, and I know it works. Typically, clients never learn how to utilize the system and call a different partner out of frustration and humiliation. Customer feedback is my favorite aspect of the handover. Some people won’t give me any, while others give me a lot—good and evil.
This feedback serves as a springboard for the sales inquiry, “Is there anyone you know who could benefit from our services?” Rarely do I immediately receive a name or phone number, but usually, within a few weeks, I get a call from someone who has previously let me down. Asking your clients for feedback on improving your company encourages you to seek continual improvement, deepens your relationship with them, and recruits them to join your word-of-mouth sales force. They will continue selling for you if you keep up with them.
Keep in mind that everyone has a job. After graduating from college, I did as most entrepreneurs do, establishing my first firm and essentially failing at it: I began purchasing how-to books on how to get rich, how to start a business, and just about any self-help literature on business-related topics that I could discover. Like most self-starting small businesses, mine began with only the three of us and a $50.00 budget. I fell victim to the financial cycle of locating the client, providing the service,
and paying the bills repeatedly. Years passed before I discovered the proper way to expand the company. I was hired because I was given more extensive assignments that required workers. When the job ended, I had five people hanging out and one seeking work. After doing this for three years, I noticed that my financial situation had not changed. The most significant difference was that I now worked seven days a week instead of six and had large insurance payments, payroll, and office rent to pay. All for the exact price. I sold everything off at my wife’s pleading.
I ended up relocating as an odd consequence of the business sale to avoid some new, boisterous neighbors who had just moved in. All of my new neighbors were either young company owners or retired. I noticed the differences between their management style and mine very soon. On a wet Saturday, as I was assisting my neighbor, who is a general contractor, in pouring concrete, the realization struck. One of his employees complained that the boss should go out looking for new employment since he grew bored seeing him on the job sites. A light was turned on. It was not my responsibility to perform the work; instead, it was my responsibility to recruit and train qualified candidates so that I could move on to the next position before the current one ended. I used to feel bad if I asked my staff to work on projects when I wasn’t there. Now that I know, I can do that.
I had been operating my present firm for over a year when I had the epiphany. I was still caught in the same small business trap at that point. I made some spending reductions, purchased insurance, and hired my first partner. He did okay, while I had more time and slightly more income to operate the company. After a few months, I brought on a second partner and increased my training expenditures, and the company suddenly began to take off. I had the time to manage all of my tasks, plan my appointments better, pay my payments on time, and, most importantly, begin looking for a new job before my present one ended.
I couldn’t adhere to any of the rules above and couldn’t build a truly successful company if I wasn’t working on the business like the owner is supposed to do. I work on project sites daily alongside other vendors or contractors, who may just be themselves and an assistant. The same justifications I used for not developing also apply to others. They are all unaware that all they are doing is working for the company, which makes them the company and not the company owner.
Success in business takes a lot of bravery, effort, sweat, and tears. The rules I’ve provided are merely a few foundational elements required to expand your business and set yourself apart from competitors. What some guys figure out in days and what many others never figure out, I learned over the years. If only I had known then what I know now, as they say.
The book “So, Now What?” by Scott Bourquin is available, and he is also the CEO of Rustic Creek. Visit for more information on company marketing.
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