GARY A. PORTER
G.A. Porter Construction
Taking a job just to stay busy is a last resort. I'd rather pay my overhead using cash reserves I've built up.
I'm a full-service custom design contractor. I'm not set up to go out and take a roofing job. A roofing contractor will drive out to a house, meet with the homeowner, measure the job, and have a contract signed in just a couple of hours.
Not me. My processes and systems require that I spend more management time than my roofing contractor. I'd have to come back to the office and write up a detailed contract after measuring the job — I don't have a one-size-fits-all contract I can use.
I could try for those jobs with a smaller markup to keep me competitive with the other guys. But is it worth it to tie myself up to a job that keeps cash flowing but doesn't earn me any profit? Or would I be better off developing systems, marketing, and calling past customers to get myself a project that will give me my target gross profit? If I'm preoccupied with a job that doesn't make me any money and I therefore can't pay attention to a job that comes in later that will be profitable, I've shot myself in the foot.
The Lifestyle Group
If we can be efficient and successful with a reasonable client, we'd rather have some of something than all of nothing. Relaxing our margins a little bit to stay competitive in this challenging market sacrifices a little profit in the short term but it keeps our people busy and gives us another client with the potential to add to our business via referrals.
We're also less selective in a slow market in terms of the leads that we work. We sill have parameters in place, but if a project falls into that gray area of whether it's a good fit, we'll work it to its conclusion and try to turn it into a sale. In busy times, we might be inclined to let it go. If we have excess capacity in sales or in the field, why not make use of those resources?
In a slow market, a company has less “maneuvering room” because of less plump projects and higher costs of sales. In such an environment, resources are stretched thin and there is less room for error in the bottom line. This is why a company must focus on its core competency — the type of project at which it has the most proficiency. Doing so will set the company apart from the competition, benefiting the otherwise-eroding bottom line.
Do not compromise your margins. By all means, find a more efficient way to operate; reduce your overhead; find more competitive vendors; improve your systems; and shed inefficient workers. All of these will help make you more competitive.
Shaving your profit margin, however, will make yours a weaker, less stable company. This will ultimately hurt not only you, but your clients, as well.
Anthony James Construction
There are certain jobs we won't take unless there are special circumstances, such as work for a past client or the opportunity for entry into a new neighborhood. However, now that we can no longer be selective the way we could the last few years, we are taking on some jobs we wouldn't have before.
We're taking smaller projects. Changing the size of the jobs you typically do may not be desirable, but it isn't going to get you in trouble. It's changing the scope of the project to something unfamiliar that you have to be careful about.
Kerry Bramon Remodeling & Design
Winter is typically a slow time for us, no matter the state of the economy. To fill in the gaps, we do smaller repair-type jobs.
I have an excellent core group of versatile, dedicated employees. Keeping that intact is my No. 1 priority. When business is slow, they do everything they can to keep busy. Their ability and willingness to do things they don't necessarily like to do is critical to this strategy. When things pick back up, small jobs have to wait until we have a gap in the schedule.