After experiencing years of abundance and growth, many remodelers find it difficult to adjust to the thought of merely surviving. They all know what the word “survival” means, and they understand that they will personally survive. But few remodeling company owners have really spent time reflecting on what survival means for their business during this turbulent period.
In a recent radio interview I did on “Survival of the Fittest,” the host commented that “... Businesses need to come to grips with the fact that it is OK to be proud to just survive this market.” Although “pride” is not a word most growth- and success-oriented people associate with just surviving in business, these are extraordinary times. In this business environment, “success” and “survival” are closer in meaning than ever before.
That’s a difficult idea for most businesspeople to embrace, but everyone needs to spend some time defining what “survival” means for their business. Here are three themes to help you think about it.
Most remodeling companies are “practices” not “businesses.” This is more than a semantic distinction. A practice is totally dependent on an individual owner, whereas a business has a life of its own. This is not to say that a business owner is not essential to the company, but the goal here is to think about the business as an entity that, apart from the owner, will or will not survive. The business is the “patient,” not the business owner.
What enables a business to operate independently of its owner are its assets, which include people (who may, in fact, be its greatest asset), brand, client base, and so on. These business assets have produced a return on investment. As they begin to shrink or even disappear, think about what you will be left with in the future. Will your business become a practice? If so, how will that change the way you go to market?
One of the biggest reasons why small businesses fail is due to lack of capital. Capital is the fuel that keeps the business operating, but it also affects day-to-day decisions. When cash is tight, people tend to make business decisions based primarily on how much money is in their checking account. Unfortunately, the result more often than not is a bad decision or a short-term decision that leads to unforeseen — and undesirable — long-term consequences.
As you think about the health of your capital, try to look not just at your cash positioning, but also at how lack of capital has changed your decision-making process and whether those changes have been detrimental to the business. In this economy, all company owners need to buckle down, but they must also keep one eye on the future and continue to make choices that support the long-term health of their business.
Most businesses have had to adjust to new market conditions, but current circumstances require a whole new attitude that I call a “survival mindset.” In the face of the kind of economic adversity we are currently experiencing, it is critical to adopt an attitude that always looks for success and doesn’t admit the possibility of failure.
A survival mindset is about work ethic. If leads, sales, and revenue are down 20%, 30%, or more, are you and your team working that much longer, that much harder, that much smarter to make up for it?
A survival mindset also includes the realization that, now more than ever, survival is a team effort. Is your team fully aligned with the task at hand? Are they working well together? Are they completely committed to the business, or are they just hanging on to their jobs?
These themes are easier to write and read about than they are to implement. But in these times, previous success is no guarantee that your business will survive. In the end, business survival is an option you choose.
—Mark Richardson is the author of How Fit Is Your Business? and is co-chairman of Case and The Case Institute of Remodeling; email@example.com; 301.229.9580.