Surviving a Downturn: Now is the Time to Take Action
In the business world, knowing when to take action can be the difference between your company's continual growth or eventual decay. Timing is everything. The coronavirus pandemic has created significant challenges and uncertainty for many, particularly those in the housing industry. While these challenges are substantial, now is not the time to simply stand idle and hope your business is lucky enough to survive. Now is the time to: Be proactive, not reactive. Surveys have shown most successful people want at least 80% of their efforts to be proactive and no more than 20% reactive. In recent months, many business leaders were pressed to be 80% reactive. Functioning this way is neither sustainable or beneficial to a successful business. It is critical now to move back to being predominantly proactive. List the things you can control and adjust your business plan accordingly. This will not only make you productive but also help your mindset. Prepare for some very challenging months ahead. Like with any home building or remodeling project, preparation is very important. When you know a storm is coming, you know what to do to prepare. Similarly, when you know there will be a tough cash-flow quarter, you know you need to shore up as much cash as possible (both spending and collecting). Prioritize. This crisis is unique because what is best for your community (and society as a whole) may not be ideal for your business. Many short-term aspects of your business might need to take the back burner until conditions improve and markets begin to normalize. You need to determine your priorities and identify any potential revenue-generating alternatives that might be needed to keep the doors open. Know your numbers. For a small business to survive a significant economic downturn, it’s critical to intimately know your numbers. Cash flow forecasts, website traffic, and even staff productivity are things that should be monitored constantly. If you're "flying blind," you aren’t likely to arrive safely at your destination. Reconnect with former clients and colleagues. Now is the time to be more connected with other people. This can be personal or professional. While your clients may not be in a position to buy a home or commit to a project, many would welcome a virtual check-in or even a simple email. Make a list of at least 50-100 friends, clients, family members and fellow HBA members, and just chip away a few each day. Think and plan. As the pace of your personal and professional life has gotten faster and faster, you probably spend less time refining your business plan. This is an opportunity to think about what you want your business to look like next year. What about five years from now? Ten years? Are you on track, or are there specific changes you can make now — or post-coronavirus — that can help put you in a better position to reach those goals? For more information and best practices on business continuity, visit nahb.org. Mark Richardson is an author, columnist and business growth strategist who contributed to this article. Richardson served for more than 30 years as president of Case/Design Remodeling, and was inducted into NAHB’s National Remodeling Hall of Fame in 2008. He is also a senior fellow at Harvard University’s Joint Center for Housing Studies where he serves as an advisor and liaison between Harvard and the remodeling industry.