Are You Ready for 2001’s Economic Roller Coaster?

In a perfect world, the economy is steady and predictable. Your crews are booked 365 days a year. The phone rings constantly with new job leads. Everybody wants something, and many of them are calling you to get it.

In the real world, the ride can get a little bumpy. A sluggish home market, volatile investments, sinking consumer confidence—it comes in cycles, and experts suggest we may be heading toward a slowdown again. The key to navigating the twists and turns of this year’s economic roller coaster is preparing for all scenarios before the ride starts.

Phil Jacobs of Exmark Landscaping saw it coming. His irrigation installation business near Chicago depended on new-home starts for 80 percent of his revenue. When construction in his area slowed down, Phil began implementing his pre-planned business-building strategies.

He used some of his down time on winter days to develop and maintain relationships with clients and business contacts who could be sources of regular work or referrals. As a result, many contacts thought of him as their friend, not just their contractor.

You can do the same. Offering referral incentives such as a discount on future services or a cash reward is a great way to subtly build relationships by keeping contacts positively focused on you. Remember to send thank-you notes or small gifts upon the completion of a referral project. Tickets to a ballgame or a certificate for dinner can make lasting impressions.

A good marketing plan gets your name in front of key contacts every 60 to 90 days. With a well-designed one-page newsletter, or just a personalized form letter, you can tell customers about new services or products, offer landscape ideas and provide seasonal tips that are of interest to them. Whatever method you choose, keeping your name in front of potential customers and business contacts always pays off.

Finding Profit in Related Areas
Prospering in a slow economy requires looking into related services that will keep money flowing in. When the market for new construction declines, homeowners spend more on remodeling and retrofit. What services in these and other areas could you offer?

Phil and several key employees brainstormed, setting a weekly goal for a specific number of new ideas. One employee suggested they expand their landscape lighting installation division. Since the crew had received training and was getting more experienced in that area, Phil hired two part-time telemarketers to initiate the expansion. Now Exmark averages six to eight profitable lighting projects per month.

How about a free irrigation evaluation to help homeowners save water and improve their landscape? Offer this in a form letter or doorhanger with your name, professional background and phone number included.

Watch Expenses
Successful contractors know what their costs are and monitor them diligently. Before the economy takes a dip, you could design a worst-case cash-flow projection that assumes a decrease in sales. Focus on where the money is going as well as on where it’s coming from.

If you have equipment you’re not using, perhaps you could store it and get a reduced insurance rate for non-use. Also make sure your insurance premiums have been adjusted for the depreciated value of all your vehicles and equipment.

Examine every aspect of your business. Could you hold off on the new company car, office furniture or computer system? How much cash would that new pipe puller realistically bring in?

Generate New Leads
Marketing strategies that work in a booming economy may not be as effective if belts tighten. During slow periods, contractors who market poorly and have no strong name-recognition are usually the hardest hit. Here are several ways to generate leads and sales and keep your name in front of the public.

Networking
How many people do you know on even a casual basis? How many of them know the work you do? How many work in an industry that could bring jobs or referrals?

Phil got out his Rolodex and his personal address book and discovered that he knew more than 200 people on a first-name basis. Perhaps you know even more.

But don’t stop there. What about all the people you don’t know yet, but could?

• Property managers, masonry specialists, hardscape contractors, nursery managers, wholesale growers, pool and spa builders, landscape architects—they can all be great sources of business. Get to know them, and stay in touch by phone, letter or e-mail.
• Join civic groups with members in allied professions.
• Donate labor to a goodwill project in your community.
• Attend home and garden shows and home-improvement expos, and exchange business cards with people in various fields.

Telemarketing
Part-time telemarketers working on a small base salary plus incentives could bring you an endless stream of leads. Develop strategies for contacting homeowners in both new and older neighborhoods as well as owners of commercial businesses.

When calling on clients, work out a script guide in advance, and have your callers be courteous and polite. For commercial clients, send a brief letter prior to the call to alert them that someone will be phoning. In most cases, you’ll be looking for interest in your services, not actually selling. Therefore, have your phone people use a guide, rather than a verbatim script, with important points highlighted that they can explain in their own words.

Develop a Solid Relationship with Your Century Branch
Century Rain Aid can provide you with an excellent networking base. By joining the Century Point Program, you’ll develop a solid business relationship with the Century staff while taking advantage of rebates, price protection, seminars, job referrals and more.

Century works directly with general contractors, landscape designers, architects, municipalities and specifiers who all seek qualified irrigation installation contractors. You may see yourself as a “local” company, but the Century network is active in major markets, nationwide. If you and your work are well-known to the Century staff and you are an active participant in the Century Point Program, your company could become a top referral.
     
Like all other irrigation contractors in his area, Phil Jacobs of Exmark had to face a down cycle. But by being prepared, staying proactive and focusing on how to grow rather than how not to run off the tracks, Phil is keeping his company stable until the inevitable economic upswing comes back around.

Take advantage of these and other ideas before work slows down, and you’ll position yourself to ride out any economic roller coaster. While the ride can be hairy at times, it can also be a great learning and growing experience.

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