ForConstructionPros.com

Read the papers and I'm sure you're all opening the windows getting ready to jump. Listen to the economists and you start pulling yourself back in but are still ready to take the dive at the least provocation.

Contractors and equipment dealers are nervous. Depending on your area of expertise and location, many of you have reason to be. It's going to be one of those years where you need to keep focused on your backlog and cash flow.

If you look at the industry, it's not as bad as you may think. If you're in commercial, road, and industrial markets, 2008 may not be too bad. In the housing market, it will depend if your area is already overbuilt and needs some time to correct. If the Feds step in to ease the foreclosure issue, housing may rebound sooner than expected.

While some aspects of this market can be bad, there may be opportunities to consider, as well. Certain types of equipment will be available on attractive terms. Interest rates are also attractive at this time. Rental rates may also reflect market conditions, and commodity prices may decrease because of lower demand.

Ensure cash flow
So what do we all have to do? Budget to take into account a lower sales volume for 2008. Take into account what it will require to earn the sales. Use your variable cost of sales to determine gross profit, then deduct personnel, occupancy and all other operating costs, including interest expense and taxes.