Top Tips for Surviving the Downturn

Published: 18th September 2008 | Author: Tom Klein

As with everything what goes up, must come down; but be prepared when it does! Here’s some age old advice that helped businesses stave off the last recession and will do so again. Builder Superstore doesn’t just offer great prices on building materials at huge stock levels – we give helpful tips too!

Top Tips for Surviving the Downturn

Cash cash cash – make an extra effort to get money in, even lower your terms with new customers and keeping a closer eye on cash flow will enable you to survive for longer.

Trade Account – try to increase terms on all your accounts however keep to existing levels of debt for as long as possible.

Be absolutely clear on your “value proposition” – Have no doubt as to why customers should use your business?

Remember, there will be a “flight to quality” – make sure that your quality offer is as high as it ever has been and try to ensure delivery of real quality on every job with truecustomer follow through.

Make sure ALL your employees know the value proposition and can articulate it.

Borrowing – If you have an overdraft, be prepared for it to be halved by your bank, can you survive on less?

Be realistic, do not kid yourself ie do not try and make the numbers work. Spread your risk across customers.

Do not use the R word as an excuse, in recession the value of total sales should still grow, but it will be at or below the rate of inflation as measured by RPI for two years.

Give it Two More Years

Construction will remain in recession for the next two years due to higher materials prices according to a survey published by the Construction Confederation. As the market slowdown is worsened by increased energy prices and materials the Construction Products Association says that building output is expected to shrink in 2008 and 2009.

This survey asked respondents how they had faired in the past two years and 17% of contractors reported a drop in the second quarter of 2008 compared with the respective period a year ago.

They also reported that output dipped in all sectors compared to the first quarter, most notably in 26% reported a drop in new public sector housing. A much higher proportion, 48%, showed falls in private housing. Whilst wins are still to be had in social and affordable housing, all this could change when Gordon Brown’s coffers run dry and spending in this area is thwarted.

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