In fiscal year 2007 I saw a declining remodeling market and decided to combat this with increased marketing. My average job size shrank, but my revenue soared, and I broke the $4 million mark. Did I mention that I had less profit than the year before at $3.5 million?
In January 2008, I faced my first layoffs in 17 years. It was difficult to let good people go, and it also came with a feeling of failure.
Six months later, I purchased a commercially zoned 1930s Dutch Colonial in the center of town. It had a high traffic count, great exposure, and a dilapidated garage that I planned to remodel into a workshop. In the long run, this building will be a terrific investment, but growing overhead and shrinking revenue meant another tough decision. My wife and I decided to sell the acre of paradise on which we lived. After getting permission from the town for temporary “mixed use” zoning, we moved into the Colonial and I put my offices in the rear of the building. At the end of 2008, we had another round of layoffs.
To keep as many of my stellar employees as I could, I took a pay cut. It was surprisingly easy after re-forecasting: operating a $4 million company should come with more compensation than operating a $2.5 million company. In addition, I lowered personal expenses the same way that I lowered business expenses. I told my employees that I took a pay cut.
What was more difficult was laying off friends and family and telling people that I had to cut their full health insurance coverage by half.
Now I roll up my sleeves and no longer wear a sport coat to work every day. I can sometimes be found at the lumberyard at 6 a.m. to get one of the leads materials by 7 a.m. I let my existing customers know that I now could use their referrals more than ever, and that if there are smaller projects, which they thought we were over-qualified for, to please send them our way.
What Goes Down Must Come Up
These times are not really new; they are just new to some of us. I am just 44 years old and I remember one of my early jobs, pumping gas when there were long lines at the pump. What? An energy crisis! Unheard of. The late ’70s and early ’80s were tough, but now I see that these things are cyclical. History shows us that a downturn is usually matched by an upturn. The thing to watch for is the new opportunities that will come as the economy recovers. I’m confident that times will be better and that those of us who are passionate about this industry will have improved strategies for how to make the most of our efforts in the next good cycle.
So pull up a chair, grab a slice of humble pie; there is good company here. If it were not for remembering my humble beginnings, I would not have made the strategic decisions to invest in a more expensive business-zoned location -- even if I have to live in it. I will surely be in a better position to ride the storm and enjoy the next up-cycle. --Ray Wiese is the owner of The Wiese Company Design-Builders, in Sherborn, Mass.