Navigating a Construction Business Through Economic Uncertainty: Lessons from Sailing
Running a construction business during these uncertain economic times can feel like sailing a yacht through stormy weather. Just as a skilled captain must adapt to strong headwinds and turbulent seas, you as a business owner must navigate choppy economic waters with foresight and agility. If you have a team under you, they will be looking for direction and confidence. Here are some strategies for steering your business through stormy economic seas:
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Chart a Course for your construction business
Just as a captain plans a route before setting sail, a construction business owner must chart a course for their company. This involves reviewing financial projections, setting goals, and developing a budget that accounts for potential economic fluctuations. Your team members may be worried about a falling workload and their increased mortgage payments. Showing them you have a plan is one of the key elements of increasing confidence and personal resilience. It’s up to you as the owner to come up with that plan, but you don’t have to do that alone. A good business advisor (like me!) or your accountant, or both, can help.
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Trim the Sails
In stormy weather, a captain reefs in the sails to maintain control of the yacht. Similarly, construction business owners must look to trim costs and optimize efficiency to weather economic downturns. This may involve renegotiating contracts, streamlining operations, focusing on cash and identifying areas for cost savings. It may even mean dropping your workforce size. Effectively tossing crew members overboard never feels good, but if it means the boat survives and can continue its journey, it may need to happen.
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Navigate by the Stars
In the absence of clear visibility, sailors navigate by the stars. Similarly, business owners must stay informed about industry trends, market conditions, and regulatory changes to make informed decisions and adapt their strategies accordingly. Make sure you talk to other business owners in similar positions to yourself, but also seek outside advice from industry, economic and financial experts.
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Steady the Helm of your construction business
In stormy seas, it’s crucial to keep a calm, steady hand on the helm. Business owners must provide strong leadership, maintain open communication with employees and stakeholders, and remain calm and focused amidst uncertainty. In particular your crew will pick up on your worry and stress and may make plans to abandon ship, just when you need them most.
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Adjust your course
When storms are severe, sailors adjust their course around the worst of it and even seek shelter in a safe harbour. Similarly, business owners should diversify their services, strengthen client relationships, and explore new markets to mitigate the impact of economic downturns. A safe harbour strategy may be scale back projects significantly, or focus on serving past clients with add-on services.
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Weather the Storm
Above all, sailors know that storms eventually pass. Likewise, business owners like you must maintain a long-term perspective, stay resilient in the face of challenges, and position your company to capitalize on opportunities when the economic climate improves. Not all businesses will survive the next 6-12 months. While this is not good for those involved it will create even better conditions for those that come out the other side stronger for the experience.
If you want my assistance in reviewing your current course and developing an alternative plan for the next 6-12 months, email me at andy@tradescoach.co.nz for an initial no-cost discussion.