Everything I'm hearing lately says that we're either in a recession or heading into one. In our 25 plus years of business, my husband and I have survived a couple of financial slowdowns and, from our perspective, no matter how financially solid you are, it's not an easy time. For small shops that exist on tight profit margins, it can be a do or die situation.
The question of recession
Whether there's a recession or not depends on who you talk to. Even the experts disagree about what a recession is and whether we're in it or exactly when it starts.
Some shops have told me that things have slowed down considerably for them. Others are telling me that not only are they not showing any signs of a drop off in business they're busier than ever. In the end, it may come down to what you make, where you're located and how many years you've been in business.
One man's recession may be another's boom time. In the early days of our business, we would feel the slowdown before anyone else.
When the rest of the country was really hurting, our metalworking business was booming, primarily because we manufactured parts for old equipment. Rather than buying new machines, companies had to repair what they had.
What to do
I'm not going to give you a magic bullet on what to do if you're in a slowdown. If I had the answers I'd be rich and if they were that simple, we wouldn't be having these problems.
How much you're hurt by a financial downturn or a work slowdown and whether you survive or not can be a result of how diversified your business is, whether you're dealing with high-end customers or whether you're debt free or not.
In this issue
Mark Roden, owner of M&R Custom Millwork, our cover story on page 34, has grown from a small shop doing wood gift type items to high-end residential and commercial cabinetry. He's diversified into closets and is also looking to sell garage cabinetry online. Diversification, outsourcing, automation and high-end clientele have kept his sales growing steadily for years.
Building your business and getting jobs may be all about finding new sources for jobs. In the case of D&L Cabinets on page 60, using online contractors' sites has proven to be a great new way to get jobs, without the headaches of traveling.
Having gone through a few tough times, I can tell you first to cut your costs wherever possible. Cutting your energy costs can help and on page 30 you can read the first of a three-part piece by Gene Wengert on saving energy and costs.
Of course, weathering tough times is easier when you're not mired in debt. In today's economy with sharply rising material and energy costs and personal discretionary income dropping, I know that being debt-free is not easy.
In fact, for some small businesses being debt-free may be virtually impossible if new equipment is necessary to compete. But it's definitely a goal to shoot for.
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