The news has been pretty grim lately. Unemployment’s back up. Housing is heading down. The Federal Reserve is out of arrows. The debt rating services appear poised to downgrade the government’s credit rating. Meanwhile, the government response is to keep spending like a lotto winner, boost taxes by a trillion dollars or so, and promise to unicorn budget cuts a decade from now. The only thing worse would be mild weather.
Fortunately, this summer’s proven to be a scorcher for most of the country. About the only thing that can interrupt contractor bliss from wallowing in triple digit temperatures is the prospect of a double dip recession. Lately, it’s all the talking heads can screech about. Listen to them on the radio. Watch them on the cable news shows. Screech, screech, screech.
So are we headed for a double dip? I don’t know. You don’t know. No one really knows. And it doesn’t matter.
You can’t control the economy. You can only control your own company. Your personal economy can expand even as the nation’s economy contracts.
At the depth of this recession, the economy contracted 6.8% for one quarter. Across all of 2009, the contraction was 2.6%. Instead of $100 of sales, the economy generated $97.40. Heck, the typical contractor drops his price more than 2.6% whenever a homeowner hiccups.
That was then. If we double dip, it’s not going to be as deep. More than likely, growth will simply be a little more lethargic. You can hustle through it.
Some of your competitors, however, will panic. They will freeze. They will try to save their way to prosperity. This creates opportunity for you. As they contract and disappear, you can pick up their market share. There’s more opportunity among nine contractors fighting for $97.40 than ten chasing $100. Divide $97.40 by nine and $100 by ten to see what I mean.
This has been a good summer for most contractors. You’ll end the season with money in the bank. Use it to invest in your company and your market. Here are a few investments you should consider:
1. Buy the competition.
Mail letters to your competitors and offer to buy their companies. Tell your territory manager you’re interested in acquisitions. He would rather you picked up one of his dealers than a contractor selling a competitive line.
The acquisition opportunity is real. Contractors trying to save their way into prosperity have instead saved their way into bankruptcy and desperation. I’m hearing about contractors picking up some tremendous deals on companies, essentially paying pennies on the dollar to grab their mail list and phone numbers.
2. Build your brand.
Now is the time to invest in your brand. Focus on your company. Direct all of your marketing around your business, why you’re unique, what you can do that no one else can.
3. Expand your offering.
The classic way to grow in a down economy is by expanding with new products, moving into new markets, or both. Are you selling generators? Have you added a solar offering? Is this the time to move into plumbing or electrical?
4. Focus on customer retention.
Your best results will come from existing customers. If you don’t have a newsletter, add one. Save money by gradually converting your customers from print to email. Market tune-ups and service agreements to your customers. Send anyone who opted for a repair over the summer a “second chance” letter, where you give them a second chance to upgrade by applying the price of their repair to a new system.
5. Get social.
In 1849, people rushed to the Northern California foothills in search of gold. Today, gold can be found in social media. If you lack the time and/or experience, hire a college student or recent graduate. They know social media and need the work.
6. Invest in yourself.
If you haven’t been to HVAC Comfortech, this is the year to go. Talk with other contractors who refused to participate in the downturn. Find out what they did to continue to grow. Sit in on presentations by the industry’s elite contractors, sales professionals, consultants, and marketers.
7. Join a buying group.
If you do not belong to a buying group today, you’re like the guy paying full fare for an airline ticket who is sitting next to the bargain fare flyer. You’re flying in the same section of the same plane, you’re just paying a lot more. How’s it feel?
While we can’t avoid the news, maybe we can change the news we follow. Instead of listening to talk radio during the day, tune into sports talk. Instead of cable news, watch cable sports.
Above all, don’t let the talking heads get to you. You can create your own expansion.