Given the slew of shocking data and the seemingly inevitable fate that awaits construction I thought it worthwhile casting my mind back to the horrors of the early 1990s and to try to recall the mistakes firms made in reacting to recession.
So here is my: Top five mistakes in a recession
- Go for turnover at all cost - the classic mistake of the early 1990s. Turnover without profit and laden with risk is a burden you may not be able to carry through to the return of the good times. Chasing down prices may screw your competitors, but it will screw you too. Seek out profit, keep risks down.
- Stick with crap clients - if they don't pay well, if they absorb valuable management time, why are you bothering? Ditch them and expend more effort on those who are worth it.
- Let your clients treat you like a bank - trying not to upset your client with demands for money that you have a right to is a quick way to becoming a used doormat. The more they owe you the less you dare complain. Keep clients' credit under tight control.
- Screw your suppliers - you need all the help you can get, irritating the people on your side is not a top move. This applies to your staff as well. People will accept that you can't be generous, but be honest and treat them well and there's a better chance they will help you in times of trouble.
- Diversify - it sounds like top advice to spread risk and diversify. But ask yourself this: if you weren't in it in the good times why now when times are getting tougher and you have no track record? Stick to what you do well.
Obviously I can already here the voices saying "that's all very well, but..." so if you disagree or have better advice, let me know your views