We have all heard about companies that make 40 percent to 60 percent of their annual sales during the winter holiday season. Many businesses have up-and-down cycles that occur throughout the year, ours included. For me, the slowdown occurred during the winter months, vacation times like spring break, and the week after school gets out. I am sure you have experienced these slower times, as well as the busier times throughout the year.

I have recently heard from a few businesses that it seems to be slowing down a bit, and that got me thinking: Am I prepared for a slowdown?

Most of us need leads coming into our business every week, and when the leads slow down, we know that our deposits and installations will slow down as well. We then look at our financials and think about how long our cash flow will last during a slowdown.

The goal for a business is not much different from that of your household: to have 6 months saved to pay all your basic bills. If you pay attention to the news, even a little, you have heard that the average American does not have much savings. It seems that it is the same with many small businesses. So, step one is to begin saving. I am reminded of that old proverb, “When is the best time to plant a tree?” Just like having a savings account, the answer is “20 years ago.” When is the second-best time to plant a tree? Today! But if you do not have a savings account, know you are not alone.

Many years ago, a friend of mine had an aluminum siding business. As part of his sales process, he only took a $250 deposit at the time of sale. He put that $250 deposit into a savings account and deliberately just forgot about it. He built his business from completed and paid-for jobs. After many years, his wife joined the business to begin marketing with brochures and a website. He presented her with the savings account that had grown to over $40,000, and they agreed to use that for marketing.

We all know that our economy has cycles; however, we never really know when the slowdown will arrive, so being prepared will help not just your business survive but also help your stress levels.

Next, when a slowdown happens, determine if this is just part of your normal calendar or if this is something else. Knowing it is normal not only calms your mind and your staff, but also allows you to “catch up” on a few projects that you may have wanted to do for your business.

What do most companies do during a slowdown? Reduce expenses. This includes laying off some staff, reducing marketing expenses, selling some assets that you no longer use or need, like trucks, and many others.

I understand reducing expenses, and I would assume you and your competitors are doing the same thing, but is it the RIGHT thing? I would suggest that you do not reduce marketing but rather increase marketing. There will be fewer leads, and this is an opportunity to gain market share in your area! Gaining market share not only will help you have more work than your competitor, but will also make you stronger coming out of a slowdown.

Not always, but often when I experienced a slowdown, I used that time to work “on my business”(see sidebar). 

Slowdown periods can also have upside to them; the key is to pay attention, be aware, and not ignore the signs that it is coming. To learn about more things you can do, email me to request a PDF of “Ideas for when it slows down” at [email protected].

It is not a matter of IF a slowdown will occur, it is a matter of WHEN it will occur. Plan, be proactive, be ready, and use that time to grow and improve!

SIDEBAR

Improve training for:
- Designers with selling skills to help increase their close ratios
Practice design appointments: literally pretend you are the customer
Send them out on installations or in the shop to see how their ideas become reality
- Installers
How to fix common problems “in the field” so they don’t have to come back to the shop
How to install what they can’t install, like crown moulding or lighting
Lean Concepts
     - Loading a truck
     - Staging a job
     - Tool belts or buckets
- Office support staff
Cross train to make it easier when someone calls in sick or goes on vacation
Get organized: in the office, the shop, the trucks.
Reduce inventory, it will bring in cash.
Update your showroom or create new displays.
Do a staff assessment.
Update your forecast and budget. (If you don’t have one, now is the time to create one.)
Update and make your actual costs accurate and then check to make sure your selling prices reflect the gross profit you want to make.
Can your software be improved? (If you don’t know the below, just Google or send me an email to help understand.)
- Accounting
- CRM
- CAD
Create a competitor file.
- List all your competitors
- Write all the strengths and 
weaknesses of each
- Ask each of your staff to do the same
- Discuss these at a meeting
- Develop specific strategies to address each competitor and how you compare
If you do not compare well, now is the time to work on fixing this.
Reach back out to your “lost jobs” to see if they ever did the work. If so, see if they were happy with whom they selected, and see if you can convince them to give you a second chance with their future work.
I have learned that in a slowdown those that have money will continue to spend it, but wisely, and want to take advantage of potentially lower prices or specials.
Call on custom home builders that match your level of quality, service, and price.
Call on interior designers the same way.