Don't Start Celebrating Yet

I bet we're all watching the daily stock market reports and wondering what we're missing, since the market keeps trending upward without much support that I can see. Business is slowly recovering, but credit is tight, consumer spending is off substantially and commodity prices are bouncing around enough to keep us all uncomfortable.

I asked an investment counselor I know who manages a large sum of money what's going on out there. He tells me it's a matter of people not having anyplace else to put their money, so they put it into the market and push up the prices - the old demand and supply theory. Since investors get minimum returns from savings and other fixed income investments, and real estate offers little in returns at the moment, investors find the movement of the market attractive until other investment alternatives offer better returns. Makes sense.

The point of bringing up the market and talk of recovery is that in the construction sector, those types of discussions still have no legs to back them up. The construction industry is clearly in bad shape, and may remain so until the commercial real estate markets shake out and housing rebounds to a degree where it actually means something. That could be two or three years from now.

So don't get all excited about a recovery and take risks that will put you further on the road to financial ruin. If you've made it this far, you're doing something right. Cash is still king and you have to control yourself to not jeopardize cash flow with any fixed or semi-fixed obligations, or get involved in any jobs where you are going to find it tough to get paid.

Elements of Future Success
To make your business more competitive and profitable, you need to:

If you find you are unable to do any of the above, you should seek training or help in the areas where you have a weakness.

There is no kidding around anymore. A lot of businesses made it this far because they had reserves that allowed them to hold on, and they now find those reserves depleted or on track to be depleted in the next three or four months. If yours is one of those businesses, you need to take action now to right the ship.

Take a team approach
You can better manage the business if you have a team with which to discuss opportunities and problems. The team could include other contractors, a banker who knows the industry, an equipment dealer or a rental company. They are all looking for customers themselves and should be willing to help. In return, they will expect some loyalty when you have business you can throw their way.

The editorial staff of this publication and I are also willing to be a part of that team. We're currently working to make useful input available to you - stay tuned for further developments. And if you have ideas about what you want to see or hear about, or what you would like us to make available to you, please let me know.

Keep plowing ahead, but keep checking your "six" (watch your back). You made it this far and it would be a shame to crash and burn now because you took a risk you should have avoided.

Garry Bartecki is the managing member of GB Financial Services LLP and VP Finance for the Associated Equipment Distributors. He can be reached at (708) 347-9109 or gbartecki@comcast.net.

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