Some ACTIONABLE Ideas to Protect Your Business
My builder friends, I know we all receive a constant influx of “information”…emails, ideas, tips, and the like. If you follow the news, it feels like the world is always ending. There is no way to predict what will happen in the economy, but we do know that the unexpected (COVID-19) happens and resulting downturns are inevitable. So, I want to lay out some actionable ideas you can implement.
Two things, first:
Check out our latest episode with Treacy Duerfeldt talking about some of his risk management strategies for this time. Also, check out my other article on this topic, Bulletproofing Against Downturns, as a complement to this one.
My opinion: It’s easy to fall into fear or panic right now, or “catastrophizing” over what MIGHT happen, especially if your wasting your time in front of the TV or in social media. I have a better proposal…roll up your sleeves and get to work.
All right, on to my list of things I’m personally doing in my business right now, and I encourage y’all to consider the same:
1. Maximize cash right now. Collect any and all outstanding invoices and change orders, and take advantage of your full length of payment terms with vendors. We are putting everything we can on credit cards, which adds another 30-60 days to your cash cycle without costing you anything as long as you pay the balance in full at the due date.
On a similar note, with rates so low and the Fed trying to keep the economy afloat, it’s probably a pretty good time to refi properties to get more cash in the bank or at least lower your rates.
2. Strengthen client relationships. Now is the time to take care of your clients and provide them solid guidance. We had one client say they may have to stop the project midstream if they lose their job. My response was, “Well, you have financing in place to finish the project. You’re gonna suffer much more damage if you stop the project midstream and are on the hook for a half-built house than if you use your financing that’s already in place to simply finish and sell it.”
On that note, if any clients do have to stop their projects, all the more reason to follow number two above…make sure you are making draws for progress and collecting change orders as soon as possible, so you aren’t upside down if God forbid the project must come to a halt.
3. Narrow your focus…essential activities only right now. What activities are actually bringing cash in the door or tangibly reducing expenses.
4. Execute your core biz. This is the cousin of number three…keep going with your core operations. This is how you put food on the table. Even in tough times the best players usually survive. Focus on habits and systems that will make a difference.
5. What kind of leader are you? Anyone can lead in good times. The bad times are what separate us and what define us. Every good story contains a struggle, an unforeseen development, something to overcome. And everyone of us is the author of our own stories. How will yours look?
Take care of your team and your vendors. They are looking to you right now. Communicate more than normal, help calm them, give them assurance you will be there for them. We’ll get through this!
Be well, head down, focus forward, and get to work.
BTW, if you are looking to improve some of your company’s systems, head on over to the Building Optimal Shop to check out some of our swag to build a better business. Proceeds go to benefit, Exponencialistas, my non-profit investing in entrepreneurs transforming their communities in Latin America.