Running Your Business in a Recession

If you’re running a construction business in a post-recession economy, nothing in the belly may actually serve your goals better than fire! A recession can hit a construction business hard—and this past recession has been no exception. The numbers tell the story. According to the U.S. Census Bureau, the value of construction was $939.1 billion in 2009, 12.4 percent below the $1,072.1 billion spent in 2008. Today’s numbers are beginning to trend upwards—the Bureau estimated a seasonally adjusted annual rate of $961 billion in August 2014, which is 5 percent above the August 2013 estimate of $915.3 billion. Things are looking better, but this is no time to relax, which begs the question: what happens when you come out of a recession? What should you do when the phone starts to ring again? To thrive in a robust economy means leaving the sloppy habits of past good economies where they belong: in the archives.

Recessions create an opportunity to learn. As a business owner who has survived, you’ve learned how to adapt. Those in the field know what the past five years have been like: many contractors had to work with smaller staffs due to budget cuts and had to bid twice as many jobs to stay competitive in the market. New competition was created by out-of-state companies bidding on jobs which they would not have considered during pre-recession periods. This intense level of competition caused many construction firms to turn to new best practices and technologies to stay lean—in particular automating takeoff and estimating. However, as the market improves, some construction companies have begun to lose the strict business practices they developed and have started bleeding profits again.