The upside of a downturn

In the world of small building businesses, market retractions can be daunting. However, they actually present an opportunity for growth, resilience, and long-term success, says business coach Graeme Owen 

While the path out of a downturn may seem uncertain, here are some strategies to not just weather the storm but to emerge stronger.

1. Look to diversify

While defining your target market carefully and focusing on it exclusively is a proven path to long-term success, it does not guarantee success in changing times, nor when there is uncertainty in the marketplace. 

So, look around and explore new avenues within your area of skills and within your locality. It may be that you will want to diversify into some different areas. Maybe there were job offerings that you focused on in the past that you could resurrect to get you through slower times. 

For example, if you have been focused on new builds, you might explore moving into renovations –  provided you have the necessary skills. Or maybe there is a growing demand in your area for eco-friendly buildings. Would it take much to add this to your offering? Perhaps you could look to offer maintenance and repairs. It has been hard for homeowners to get hold of a builder in recent years. Now might be a good time to capitalise on their desire to get long-awaited maintenance done.  

By diversifying, you expand your client base and revenue streams. Remember, every client, however small, is an opportunity to get a referral. 

2. Focus on your value proposition

In a retracting market, clients are still looking for the best value. This translates into the most they can receive for the best price. Remember, it’s always about price, so make sure that yours includes valuable extras. Don’t just say that you deliver quality. Rather, detail what you give and how it adds value for your potential client. 

Set aside a little time and list the unique aspects of your service. These may include quality craftsmanship (because of your quality control process), attention to detail (because of your highly skilled team), your innovative solutions (from your close connections to designers) or your additional guarantees (above and beyond industry standard warranties). 

Then build into your sales process ways to showcase how these add tangible value to your clients’ projects. Doing this will set you apart from competitors.

3. Cultivate customer relationships

Building trust and developing strong client relationships is a game-changer when your potential client has a choice of builders. People will not purchase from someone they do not trust. You can build trust by giving exceptional customer service from the very first contact. 

Keep your word about any promises you might make about getting back to them. Ensure your communications are clear and don’t be afraid of being transparent throughout the whole pre-build and build process. Becoming a trusted building professional ensures your clients will want to purchase from you – and that they will refer you to friends. 

4. Embrace technology and efficiency

Look for technological advancements to improve your productivity and efficiency. Investigate tools like project management software, Building Information Modeling (BIM), and energy-efficient building solutions to streamline your processes and add value to your service. It may mean that you have to engage in a learning process! 

5. Financial planning and cost management

During market retractions, careful financial management is crucial. So, keep a close eye on your costs, negotiate with suppliers where possible, and utilise every tool you have to maximise the productivity of your team, while ensuring that your projected budgets do not compromise on quality.

6. Leverage networks

Get in front of other businesses in related industries such as architects, suppliers and interior designers. Go and meet them and ask about their business and how you can help. Don’t simply go cap in hand asking if they have any work for you, as they are likely facing the same issues as you. Use these meetings as an opportunity to expand your reach, generate friendships and lead to mutual referrals.

7. Marketing

Enhance your online presence and your marketing efforts. Look for the cheapest methods first and test them before increasing your spend. Review your website and share success stories to showcase your expertise. A strong brand and consistent marketing efforts will keep you in front of potential clients even in a retracting market.

8. Maintain a positive mindset!

Challenges are part of the journey of business ownership. Every setback can be an opportunity to learn and grow. So, stay resilient, adaptable, and open to innovation. Remember that with determination and good planning, your business can continue to flourish – even in challenging times! 

 

Graeme Owen is a builders’ business coach at thesuccessfulbuilder.com. Since 2006, he has helped builders throughout New Zealand get off the tools, make decent money, and get more time in their lives. Grab a copy of his free book: The 15 Minute Sales Call Guaranteed To Increase Your Conversion Rate or join Trademates and connect with builders who are scaling too.