Different Strategies to Prepare for Economic Downturn

There are different strategies contractors should consider to be always ready for any economic condition.

Avoid Over Staffing

This seems to be the obvious option however, as a contractor you should avoid this if your staff is supporting the less profitable side of the business or can easily be replaced.

Conserve Cash

Another common mistake is to pay your bills early. Pay your bills on the due date; You should only consider paying your bills early if there is an incentive to pay them earlier. In another word if the company offers you to pay less if you pay earlier.

Go Easy on Entertainment

Entertainment comes with any type of business, however they could become expensive if things gets slow. If entertaining your clients is part of your business it is good to take them out without committing to an entire season.

Auto Expense Myth

Be practical when it comes to purchasing your vehicle. As a business owner you should rather drive a practical car for 20 years rather than an expensive one for 3.

Line of Credit

Make sure to secure a line of credit for rainy days.

Sell your unused items

If you need to sell or get rid of an old equipment it is better to do it today while there is a market for it. Never procrastinate.

Avoid Overtimes

While it should be obvious and it is a better option than over staffing, paying overtime should be kept to minimum.

Set your marketing budget

You should always be on top of your marketing expenses. If you're too busy that you're turning down work, why spend more on marketing? It doesn't make sense, but companies tend to spend on marketing when they need it the least.

Establish Lasting Relationships

You should always work on your network and establish lasting relationships with vendors and customers. Investing in people will always pay off at the right time.

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