Over the last few years, small- and medium-sized builders have been hit hard by the recession and an ailing real estate market, causing many in the industry to resort to “survival mode,” cutting back on marketing, staff and overhead costs in an effort to weather the storm.
A majority of these contractors have slashed prices to reduce inventory and are executing a duck-and-cover approach to management. While this seems intuitive, it is not a strategic approach that lends itself to long-term viability. In actuality, savvy builders should do the opposite, by investing time, money and resources into their company to ultimately thrive in the post-recession economy.
To actively participate in this business environment is to lay the groundwork for good habits and procedures for years to come. If a company can hone systems that work today, it will enjoy strong profits in the future. Just as a prevent defense in football may actually hinder a team in winning a game, survival mode in the competitive and embattled housing industry will keep a company from making key changes that will ultimately help the business succeed.
During this downturn, small- and medium-sized contractors should constantly evaluate their company and make bold decisions that help improve their position now and once the market bounces back. The reality is that a lack of excess funds will sharpen decision-making and focus attention and can benefit a builder long term.
Consider doing the following to remain competitive in this tough market:
• Invest in people. Hire and assemble the best possible team. Good employees are a long-term asset to the company and the best bet for a strong financial future. Because of the slow economy, there is an inordinately large pool of talented people out there that urgently need jobs. Many are experienced professionals who can improve your company and bring a fresh perspective to the business. Once you have the right people in place, invest in continuous training, coaching and education to best unlock their potential.
• Invest in building and marketing your brand. Although authorizing expenditures now may seem counter intuitive, there is no better time to focus on marketing than during a slow economy. Instead of cutting back on spending, commit to investing more in your company’s image and ensure that you are finding new ways to reach your buyer through creative and thoughtful campaigns.
If you don’t have a strong brand, develop one by engaging with a branding and/or marketing firm and be sure to promote it to your target buyers. Many firms are struggling for business right now as well and will offer great rates for their work. In addition to advertising and direct marketing, hiring a public relations firm is a smart and affordable way to increase brand awareness and credibility. Nothing is as effective in building your reputation as a third-party account of your activities and achievements.