It’s easy to be successful in a great economy. You can get away with a lot of bad habits, lack of systems, and high overhead when jobs are large and margins high. But when the economy contracts, job sizes shrink, and margins erode, those bad habits can have a huge affect on the health of your company.
Focusing on the right things when times are good are key to recession-proofing your business.
In this episode, Dave Edwards talks to Victoria and Mark about the lessons he learned and the changes he made to create a healthy company following the last recession, and how that positions it to survive and even thrive in the next downturn.
Dave is the founder and president of Earth Bound Homes, a home-building and remodeling company in San Jose, CA. Before he joined Remodelers Advantage Roundtables in 2014, Dave spent 12 years learning all the different ways to not build and run a profitable construction company.
His path to recession-proofing his company came after watching other remodelers and builders go out of business in the last recession. After his company almost went bankrupt in 2011, he joined Roundtables and also went to counseling. He talks about his path to success in business and in his personal life, and how he has built a company that can withstand an economic downturn, including:
- Focusing on others’ happiness as the key to achievement
- His metrics for success — it’s not all about money
- Recognizing when someone else has better ideas, and running with them
- The Stop/Start meeting to improve the company
- How to bill like a lawyer
- Making project management a source of income
- Working with a tight subcontractor market who need extra management
- Helping architects get their project packages together
- Identifying bad habits and how to fix them
- How unbilled labor can cut into your profits
- Why he cut his field staff to boost his revenue
- Getting the best people and keeping them happy
- The power of diversity in company culture
- And more …
Dave says the three big ways to ensuring your company’s survival are figuring out how to live on your salary as a business owner, banking your cash to be able to pay and retain your team during a downturn, and reducing your mark up to still be profitable.