UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev | Next
Author: TheRealBCF Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 14985  
Subject: What a Time! Date: 11/21/2008 9:09 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 18
I've been absent for a while, and what a time I've had. As many of you know, I'm a structural engineer and I've worked with primarily residential projects. Business was doing OK in July, and I had cut expenses down enough that it looked like I was going to be OK in the slowdown. August was great for the first two weeks, and it looked like a record month was coming on. Then everything died. Literally - the last week of August for the first time since my first year I had no backlog, no calls, nothing. I sat in the office until 5:00 PM and waited for the phone to ring - it didn't. September was marginally better, but not much. October was a record bad month, I haven't done that bad in years. On top of that, clients weren't paying at all.

I fell behind in rent, credit card payments, and I wasn't sure what I was going to do. A family friend that is my father's age started on me for "going into debt". It's easy to do in a business when your revenue drops to a third of what it was extremely quickly and you can't cut your expenses as fast as revenue drops. It's been ugly.

What did I do? Well I've gotten agressive with my web presence. I have a number of larger projects that are in the concept stage building houses from shipping containers with various organizations for low to moderate income housing. I tweaked my Google Adwords account. Business started to recover the last week of October, and November has been fine. I make people pay me up front now. I negotiated my rent down. I had to go on pay back program with American Express - I hated to do it, but they pointed out the interest payments and late fees would eat me alive otherwise.

One important thing I learned in this period is that you have to talk to your creditors. It saved me a lot of hassle. I got aggressive in collections, but frankly it's like squeezing blood out of a rock. I have a huge amount owed to me that I will have to write off, I've placed liens on properties and turned the debt over to collection agencies, but nothing is happening. Most of my work now is coming from homeowners with serious structural issues, which is fine with me. Homeowners pay for the most part.

Some of my competitors have worse stories. At least one is losing his house. Another isn't sure how he is going to pay his professional liability insurance. Others are stuck with office buildings they own that are empty... About half of my builder clients are gone now.

One good move I did was look at how I do structural evaluations and foundation investigations. I met with some foundation repair contractors and got feedback on what they thought of my reports. I developed a canned set of specifications for foundation repairs, and a report format that is in MS Access that I just have to fill in a short narrative. I cut my fee in almost half that way, so I get a lot of business I lost before.

As for the Internet, as sucky as October was, 26% of my business came from my website that month. What would have happened if I didn't have my website? Cripes, I might be facing foreclosure like some of my friends are.

So, what lessons have a I learned so far?
- Look hard at business expenses. I've dropped membership in loads of organizations, and passed on buying a lot of stuff.
- Cut personal expenses. I bag my lunch as much as I can. I have lunch meat, peanut butter, jelly, bread, and ramen noodle soup in the office.
- Experiment with marketing. Track where business comes from. I ask everyone that calls me where they got my name, and use it to determine what works best.
- Don't be afraid to change markets and business models. What worked before won't work now. I have competitors that are holding on to old business methods and they are dying.
- Cut your prices as you can. I used to say I didn't want to work for the same amount as I would make at Burger King. Now I say I may be working for what I would make at Burger King, but at least I'm not working at Burger King (although free Cokes would be alright).
- A website is critical. Even people that get referred to me by others check out my website. It's saving me.
- Don't talk about what hassles you are having with people that have never been in business. If you do, you will get all sorts of stupid, lame advice and ill informed comments.
- I have a 24 hour response rule, potential leads must be responded to in 24 hours.

Oh, and there are certain things that I learned were bad in good times, which are bad in bad times too. I learned a couple years ago to say no to people that want me to come out because a county inspector found something wrong and wants an engineer's report. Those people never pay, and there are always problems. They still don't pay, and they still cause a lot of problems.

Hope this helps. I hope things get better, or at least not much worse. I hope you all are doing OK.

BCF
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (13) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Post of the Day:
Macro Economics

Russia Collapsing Again?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement