Tightening Your Belt and Maintaining Quality

Find ways to maintain quality in an economic downturn.

Now is not the time to sacrifice your commitment to quality and customer service. Many contractors - trying to juggle tighter-than-ever margins while not giving anything away for free - can be tempted to let their commitment to excellence slide just a bit. We must fight through this, even in very difficult financial times. Let's look at four areas that can assist your leadership and practical commitment to maintaining belt-tightening efforts while not giving up any commitment to quality.

1. Stand for excellence.
What do you stand for as a contractor? Even if you are tempted to "cut" here and there from your normal efforts to produce first class results, don't give in to such temptations. While most of your customers might never know the difference, you do, and so do your employees. In the end, many leaders and business owners are most dignified by challenging times and are watched closely by those who know them the best. Should your employees see you waver in your overall commitment to quality, even with tightening budgets, you risk losing their respect and hard work.

So, stand for excellence and remain committed to doing things right the first time. Not only will this reinforce your personal commitment, doing things right the first time will actually cost you less in the long run. Remember, most customers don't pay for our mistakes anyway, and they are sure not going to begin to do this now. Stay committed to quality even if you're on a shoestring budget.

2. Rethink customer 'freebies.'
As contractors, we often like to give something away or at least put a little extra in our margins in order to give some extra time, material, etc. to a customer. When budgets and profit margins tighten it is critical that you rethink whatever services you may have provided at no additional charge in the past.

A brief example might include a contractor who spends a few extra man-hours to clean up a customer's site that goes beyond just cleaning up where his or her crews may have worked. I've known contractors who might give several hundreds to several thousands of dollars away in free labor or extra material to gain the favor of a client. Be careful with your giveaways.

3. Diversify and look to add-on services.
Tough economic times should invite a contractor to examine what additional services - for pay - they can add to their current menu of services and products. With our current financial crisis many contractors have gone out of business so there may be opportunities to pick up new clients from other contractors who have left the market.

Another aspect of this is to re-examine any complimentary services that you have considered in the past. This may be a time to look more closely at adding such services. Again, look at the market, how it is being met today and who the "players" are in the market currently. This might come by adding another service for your existing customers or it might be taking your current areas of expertise to another geographical market. Either way, if you have a good cash situation and have little to no significant debt, it might be a great time to expand into a new area of construction or new market area.

4. Recruit volunteer sales people.
A good effort to exercise during tight finances is to recruit "volunteer sales people." These "VSPs" can come from several sources. You can look at retired individuals who may have once sold for you or for another contractor but who still knows the business. In some cases, these folks have good relationships with clients, are relaxed (because they are retired), and are often interested in picking up some extra money.

Another source for your VSPs is to engage some of your better and current clients into selling you and your company to others. This can be done by paying them a referral fee for passing along prospects that you close for new work. Another effort here might be to conduct some "lunch and learns" that a growing number of contractors are finding to be productive and profitable. Often your happiest clients are only too quick to help you during these tough times. Let them help you!

There are no easy answers when times are tough; it takes every fiber of your body and creative juice you can muster to win in today's market. However, in all that you do, do not give up the integrity and purpose that led you to your current existence. The fact that you are even reading this article is a testament to your survival skills. As the old saying goes, "When the going gets tough, the tough get going!"