I’ve been a consultant for contractors for over 40 years. While for the younger readers this qualifies me for being an old goat, the reality is I’ve seen and endured quite a few economic downturns. Right or wrong, I think we may be entering the beginning of an economic slowdown. Frequently, the stock market is an early warning of a decline and it has taken a hit the last few months. Wage inflation has started. The national debt is rising. The government shutdown is slowing spinning. The world economy is not as strong as in the past. And most importantly, it has been 10 years since the last economic slowdown and recessions tend to be cyclical. In reality, recession or not, you should run your business efficiently and be prepared for a slowdown.
We see many of our customers getting sloppy. There’s no question good times and high volume can create high profits. But focusing on the top and bottom line without keeping a close watch on costs can create a precarious business situation. Smart business people should run their business like there is a disaster around the corner. Business in itself is risky and failure to pay attention to details can be fatal. We see too many trips to supply house, chaotic workforce management, poor collection practices and many other questionable business practices. So here are some things to watch out for: