Strategic Planning For Contractors and Developers in Difficult Times

Asset - Strategic Planning For Contractors and Developers in Difficult Times

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The sky is not falling. Yet, declining company conditions in cyclical industries like homebuilders, contractors, sub-contractors, land developers, and construction suppliers caused by the ongoing recession are going to be difficult for a while. company owners in construction industries who strategically plan and prepare will avoid work-out situations with their banks and gain great results throughout the downturn. They will be in a position to soar when opportunities return with the strengthening economy.

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My advice to owners in construction and amelioration businesses is to prepare a version of your strategic company plan showing a 30% or more decrease in revenue. establishment this version will force you to conserve cash by cutting all the fat and some of the bone from your operations.

o Many goals that would commonly be very ranked will need to be deferred in this version unless they ensue in rapid and deep cost savings.

o With a 30% reduction of revenues most of your marketing allocation will disappear. I agree with the marketing experts who say this should be the last line item you cut but at some point new prospects are not looking. Ask homebuilders about their numbers of genuine customer prospects right now.

o Do you have key citizen you could try to place with other firms? I worked with a normal contractor who settled any key employees with property supervision firms during downturns and took them back when the shop resumed.

o Are there new relationships you need to develop to outsource work that has previously been done in-house. Outsourcing saves you money as you typically only pay for time and materials as needed.

There are many alternatives to cut costs when it has to be done. You will find ways to get the work completed efficiently and products delivered or services provided. By planning in enlarge you will make great choices and you will enlarge the long term position of your firm should your shop contract.

Once you get your cash flow stabilized factoring a 30% wage reduction start seeing at where new opportunities may come from.

o Can you transfer some of the ideas for cost savings to the more optimistic versions of your strategic plan and increase profitability?

o maybe you could spend the possible cost savings in an acquisition. Over the next any years there will be great opportunities to purchase underperforming companies. If you see an intelligent opportunity make sure you understand what the other company has that could move you forward. A great storage yard or other hard assets, key relationships, primary licenses, etc.?

o Is there a stock line that will enlarge in your business even during the downturn? An example is that historically extensive maintenance services on older cars have in case,granted wage for auto dealers in downturns.

At this time, strategic plans for businesses in cyclical industries should contain a version that tackles uncontrollable wage reduction head on. In the current shop this is not pessimism, it is preparation. Good times will return and those who have prepared and conserved cash will be able to capitalize on the new opportunities to grow rapidly.

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