As noted in the Part 1 of this article, the contractor’s or builder’s objective must be to keep the company viable during the downturn and ready to spring back quickly when the economy begins to thaw. Following are some specific strategies for your crisis management toolkit:

• Remember that if ever your employees needed strong leadership, it is now, and that leadership is you.
• Remain laser-focused, with the least possible amount of insulation between you and the part of your business where your money is made or lost.
• Your employees will be impacted many ways by the loss of business. Share as much of your concern with them as possible so that they will not feel in the dark. Let them know you are feeling the pain along with them, i.e., “we are all in this together.” Give them the opportunity to express their feelings to you, and offer them hope. Be frank with them about the hill you and they have to climb, but avoid whining and what-ifs.
• Let your employees know that the company's survival depends largely on their continued dedication to their responsibilities. Do not talk about failure unless it becomes a certainty.
• Slash overhead to a minimum.
• If necessary, ask your vendors for leniency in payment terms. If you have paid your bills as agreed for some time, they may see you as a good risk, and that giving you some slack is a better option than cutting you off and losing your business forever. It is usually better to directly acknowledge that you are having some problems than to simply fall into a pattern of paying bills much later than agreed.
• Sit down with your banker and let him know in the most positive (but honest) terms possible what you are doing to get through the current situation. Try to rework payment terms if necessary.

The author of this article, Nick Ganaway, was a successful general contractor for 25 years. He is a consultant in Atlanta, Georgia for contractors and other small business owners. Nick has described how to set up and manage a construction business that is profitable, enjoyable, and enduring in his book, Construction Business Management: What Every Construction Contractor, Builder & Subcontractor Needs to Know.

Related Articles

• Contractors’ and Builders’ Recession Survival Strategies (Part 1) New Business Opportunities
• Contractors’ and Builders’ Recession Survival Strategies (Part 2) Marketing and Training
• Contractors’ and Builders’ Recession Survival Strategies (Part 3) Shed Expenses and Maintain a Positive Outlook