This is not a time to erect barriers between customers and your business.
are in a terrible economic environment, and many of you are feeling the pinch.
There’s nothing you can do to increase demand for holes to be drilled, so the
focus needs to be on increasing your share of the diminished market. This means
landing a higher percentage of the jobs available, and focusing on the most
profitable ones. Here are some ideas for doing so.
1. Less can mean more.
The natural tendency for contractors when work slows down is to frantically
chase any job around. Projects that might have had a handful of bidders a year
or two ago now may have a dozen or more. The marketplace comes to resemble a
shark feeding frenzy, except nobody gets enough to eat.
Long ago, I read of a study that maintained when there are a dozen or more
bidders on a construction project, it’s virtually impossible for a contractor
to turn a profit. That much competition will drive the bid prices so low, the
only way to win is to make an estimating mistake. So think outside of that box.
Instead of joining the feeding frenzy, look to nibble on little market niches
that may be underserved.
During the early 1990s, the construction market in California hit the skids. I
was attending a mechanical contractor convention back then when I struck up a
conversation with one of the members from Southern California, and asked how he
was weathering the storm. He told me work had dried up almost completely when
he got an opportunity to handle a parking garage project. There wasn’t much to
the mechanical scope, just drain piping and a little bit of ventilation, but
none of his competition was interested in the job, and he was grateful for
table scraps. His firm took on the project, and it turned into a slew of
similar jobs around the region that he said kept his company alive during the
I’m not sure what might be comparable to parking garages in your line of work,
but you know your markets better than I do, and you might do well to start
considering jobs you formerly turned up your nose at. Maybe they were too
inconsequential to bother with when business was booming, but now may deserve a
Caution: If the reason you decided against pursuing certain jobs was you didn’t
trust the owner or GC, that’s still good reason to avoid them – more so now
2. Do what you do well.
Every business does some things better than others. What’s your specialty? Is
it wells or foundation work? Residential or commercial? Maybe you handle
certain types of jobsite challenges better than most people in your field.
Maybe certain types of jobs have proven more profitable than
Define for yourself what your business specialty is. Then start promoting your
company as the problem solver in that line of work.
3. Network like crazy.
As noted, the bid markets tend to be overcrowded at times like this. As much as
possible, you want to land negotiated jobs where you’re not competing against a
horde of competitors, some perhaps of questionable competence and integrity.
You want to be invited to take a look at challenging jobs or get a last look
after the bidding is done. This means firming up your business contacts and
making new ones at every opportunity.
Networking means more than schmoozing with strangers at a cocktail party. In
fact, it’s even more important to stay in touch with people you already know.
Make calls to former customers you’ve worked with successfully to see if they
have any work in the hopper or can refer you to someone who does. Join local
business, social and charitable groups, and show up at their meetings and
events. Mingle with people from other trades for the sake of mutual referrals.
Collect business cards from influential people until your pockets can’t hold
any more. It’s more important to collect business cards than to give yours to
them. That’s because you have no control over what they do with yours. Most
will discard them or file them where they’ll never be seen again. But once you
have their contact information in hand, you have the ability to follow up with
e-mails, phone calls, mailings, personal notes, business leads, etc.
4. First impressions last.
Making contact with influential people is like getting fish to notice your
bait. The bigger challenge is convincing them to strike and then landing them
in your boat. You can put in hours of schmoozing to get the phone to ring with
a potentially lucrative business deal; then a phone receptionist with a
lackadaisical or surly attitude can kill it within seconds.
Customer courtesy and customer service always are important, but critically so
when times are tough. Make sure everyone in your company who comes in contact
with customers is trained to put on a happy face, and make customers and
prospects feel good about doing business with you. Teach them to learn clients’
names and address them by such. (Use Mr. and Ms. formalities until first-name
bonds get established.) Grant them little favors, and always keep in mind that
you never know when the job of a lifetime may drop in your lap. Assume that
every phone call, every conversation, could be the one that turns your life and
5. Make it easy to do business with you.
I’m continually astounded by the unnecessary barriers that many businesses put
in place between themselves and customers. Not long ago, I needed to pick up
something at a local lawn and garden center, and called a little before 6:00
p.m. to inquire whether they were still open. “We close at 6:00,” said the lady
answering the phone. I told her I could be there within 10 minutes, and if
she’d mind staying open just a few minutes longer. “Sorry, we close at 6:00,”
came the stern reply.
Guess which lawn and garden store never gets another dime of my business. This
is not a time to invoke stupid rules and rigid company
Here’s a positive example: For many years, I’ve dealt with an HVAC company
that, as a rule, doesn’t like to accept credit card payments. But I prefer to
pay for home services with a credit card as a matter of convenience, plus I
build up miles with a card linked to an airline’s frequent flyer program. No
problem. Even though they don’t advertise credit card payment, the company will
accept them upon request. If someone wants to pay for your services with a
credit card, don’t say no. Get yourself registered with a credit card provider.
If customers’ schedules are inconvenient to you, bend over backwards to alter
yours to accommodate theirs.
6. Practice guerilla maketing.
“Guerrilla Marketing” is a term coined by advertising and marketing expert Jay
Conrad Levinson in a popular 1984 book by that title, along with numerous
sequels. It encompasses low-budget, unconventional ways to promote your
business by using energy and imagination instead of big marketing expenditures.
I encourage you to pay a visit to www.gmarketing.com, and read some of his
articles and books. You’ll come away with dozens of ideas for getting your
phone to ring at much lower cost than big-budget Yellow Pages
Here’s one example: Look for cross-marketing opportunities between commercial
and residential clientele. The employees who work for the businesses that hire
you also may have home projects that need to be done, or neighbors to refer you
to. Similarly, homeowners you work for have jobs with businesses that also may
need your services at certain times. Considering offering discounts and
referral fees to people who come through with job leads.
7. Build trust.
Successful business relationships hinge on trust. People want to do business
with people they can rely on to keep promises and perform all the crucial tasks
associated with a given job. Hard times make it extra important for your crews
to show up on the job when needed, meet schedules and perform professionally in
every way. If someone does make a mistake, ’fess up to it, and do whatever it
takes to make it right.
When work is slow, desperation tempts many contractors to exaggerate their
capabilities. That always comes back to bite you. A favorite saying of mine is,
“under-promise and over-deliver.” If you tell someone you’ll get something done
in a week and it takes 10 days, it tells that person your word is no good. If
you tell him it will take two weeks and you get it done in 10 days, you’re a
hero. Same result, but the latter builds trust, while the other destroys
8. Distinguish between nice to have and critical.
Businesses tend to accumulate a lot of luxuries when they’re on a roll – and
many of you were on a roll throughout the 1990s and the early part of this
decade, thanks to the greatest extended construction boom this country has ever
seen. That’s over, and now it’s time to fix a penetrating gaze on your favorite
It’s easy to rationalize gas-guzzling SUVs, club memberships, plush quarters
and other expensive accoutrements as business assets. But do their benefits
align with their cost? Nobody likes to give up anything, but current business
conditions may compel cost-cutting, and cutting back on big-ticket items goes a
longer way toward sustaining your business than rationing paper clips.
9. Protect your people assets.
Employees rank high as a big-ticket expense, and letting some go may be
unavoidable in a downturn. But make it a last resort rather than a knee-jerk
reaction, at least when it comes to good performers. The market eventually will
regain health, and when it does, you don’t want to be turning down work because
you don’t have the manpower to handle it. Then you’ll have to scramble along
with everyone else to fill positions, and may end up hiring warm bodies of
To the extent you can afford it, you can make good use of slack time by putting
your people to work on things like equipment maintenance or training. If you
have people of more or less equal value, before letting one go bring them
together, explain your economic pinch, and ask if all of them might be willing
to give up some pay or hours as an alternative to laying off one or more of
For years, I’ve listened to construction contractors identify labor-force
recruitment as their single biggest problem. If you have diamonds in the rough,
make it a priority to retain them.
10. Reinforce community ties.
Most people and businesses prefer to patronize local companies that walk the
same streets and contribute to the same tax base. When times are tough,
organizations like the Chamber of Commerce, Rotary Club and various other civic
and charitable organizations can be a lifeline for struggling companies. Fellow
members tend to do business with one another, and are a rich source of
Instead of tossing megabucks at Yellow Pages advertising, invest your marketing
dollars in local church bulletins, youth sports programs and the like. Expense
tends to be norminal and the return on these investments high. Church bulletins
are read by virtually the entire target audience, and those people will go out
of their way to patronize and refer companies that support their religious
institutions. So, too, will the parents of kids on the baseball and hockey
teams whose uniforms bear your logo.
Smart Business: 10 Tips for Surviving in Bad Times
October 1, 2008