Acting on the warning signs . . .


I am happy to report that I have had no calls from anyone regarding my last two articles — which is extremely good news, if not slightly surprising, as they were about very real life situations.

This month we are going to look on the brighter side of growth, cash flow and partnership problems — the brighter side being a true story of a business in trouble whose owner turned it all around.

The background is pretty typical — a tradesman two years out of his time, wanting something more than working for wages, going out on his own and slowly growing.

Ten years later he’s married with two kids, a mortgage, overdraft and a construction company that has had some great successes but has fallen on some quieter times three years ago. It’s not an uncommon story and, in fact, a very common story of late.

So why is this one different to the Best Bro’s Builders story I wrote about in the past two issues of Building Today? Well, this guy did not play the ostrich game of sticking his head in the sand and hoping it would get better — he acted at the first sign of possible trouble.

He saw the forward order books had gone from six months to “what are we going to do when this one finishes”, the debtors were taking a little longer to pay, the creditors were getting harder to pay on the 20th of the month, his competitors were dropping the prices of their quotes and tenders to win jobs, and his stress levels were rising.

So what did he do? He took five very important steps:

Of course, there is a downside to this, and that is the possibility of losing good tradesmen, which is an ever-increasing problem in the industry. So think very carefully about this whole scenario, even though this step actually saved this business.

He tried charge-up for group housing companies and, while this kept a team or two occupied, the margins were not quite there. He competed for Ministry of Education work — a very competitive market but one that proved consistent and paid on time.

He contacted all the big shed and barn companies and built several units there. He also made a decision not to turn anything down, and this paid dividends when a fence job referred him to a new build client.

The traditional margins were not in any of this work, but it kept the company going, kept the six employees steady, and ensured a profit was being made.

The secret of this story is to act fast when trouble looms, and don’t be scared to change — oh yeah, and ask for help if you need it.

This chap now has five contract teams working, Ministry of Education work is a consistent part of the work flow, there is also a small works team, and his new build order book is three in the waiting.

That’s what I call a success, and one that I’m proud to call a client. So if you are needing help, call Trades Coaching New Zealand on 09 485 3350.

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