When work is plentiful, and your cash flow is secure, it can feel like the future is yours for the taking. Then suddenly, everything comes to a screeching halt, and you're left wondering what to do when business is slow.
A business slowdown can strike out of nowhere in the trade and service sector, even after extended periods of positive upward growth. Sometimes it's a lack of consumer spending that leads to slow business. Sometimes, sudden global changes halt entire industries and reduce incoming work to a trickle.
For a trade or service business owner like yourself, your options during periods of slow business can feel very limited. Either wait for things to pick up or seriously think about your current finances and whether you can keep your team employed.
But there are positive steps you can take! This article will cover how to read the signs of an impending economic slowdown, what to do when one arrives, and how to tackle slow business head-on, with tips from some of our veteran tradie partners on making the best of even the worst economic conditions.
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If you're sticking around, though, let's start by discussing what to do when you suspect tough times are ahead.
Reading the signs of an economic downturn on the horizon
Learning to read the signs of an oncoming economic slump begins with understanding that isn't going to be a set point where you notice things are grinding to a halt. You won't wake up one morning after months of great business and suddenly ask, "why is business so slow right now?"
Instead, the slowing of the trade sector happens gradually. You'll notice a number of tell-tale signs, but they might not appear to be cause for alarm when viewed individually.
A few less jobs than you'd expect month-on-month. A customer tells you they aren't as keen on solar panels after watching the economic report on the news last night. A supplier informing you that material prices will, in fact, be rising once again to meet growing costs. These small occurrences can indicate large-scale economic change and tougher times ahead.
But when viewed individually, it's hard to distinguish whether these or any other signs are anything more than a short-term slump that the industry recovers from less than a month later (like it usually does).
So how do you know the difference between a slow business month and looming economic decline?
The answer, oddly enough, is quantity over quality. You need a laundry list of indicators that, when grouped together, give you a damn good idea of whether your market is on track for a slowdown. Start by asking the right questions about your industry, then judge for yourself whether slow business combined with these factors is cause for concern.
Here are four questions you can seek answers to right away:
1. Is business slowing down for my competitors?
The first thing to determine when business is slow is whether the rest of your industry is experiencing similar conditions. Your local competitors are a sure bet in this regard, but they won't just hand over their job cards for the week and let you look at whether they've got enough work on the go.
Instead, you've got to get inventive, and one of the best approaches you can take is surveying their social media. In this day and age, most switched-on trade businesses are all across socials. When work is good, it's not uncommon to see lots of posts celebrating newly completed jobs on Facebook, Instagram and even TikTok. That means when the flood of posts stops, it's very noticeable. Check out what they've been posting recently and at what volume. Does it track similar to the amount of work you're currently getting? If so, then perhaps you aren't the only one currently wondering what to do when business is really slow.
2. Is the employment market slowing down?
When discussing how to find out whether slow business is the result of tough economic times ahead, the employment market is your best friend. You aren't here to hire, especially if business is slowing right down. Instead, you're here to try and gauge the severity of the slow down and how widely it's being felt.
More trade professionals looking for work equals a slowing employment market, where business growth and the number of opportunities appearing in the industry can't keep up with the number of people seeking those opportunities.
You can also dig a bit deeper and try to figure out where these job seeking trade professionals are coming from. If they're willing to up stakes and move interstate for work, then the current economic situation could be quite dire nationwide. It can mean that this period of slow business is going to stick around for a while and that it's best to settle in for the long run.
3. Are suppliers concerned about the future?
The severity of slow business is a burden shared between both trade business owners and their suppliers. If you're on good terms with a local supplier, then there's no reason not to reach out and ask them to give you the lay of the land from their perspective.
Your suppliers probably see hundreds of different trade professionals cross through their doors each week, and if there's been a sudden decline in material or part purchases, you bet they'll be on the trail of why.
Supplier costs can also be a big indicator of tightening economic conditions, as we mentioned at the beginning of this article. If supplier prices are hiking right as new work is becoming scarce, then there's cause for concern.
Come ready to share your slow business experiences with your suppliers too. After all, we're all in this together, and the greatest weapon against uncertain economic times is shared information!
4. Do your industry peers also think business is slowing?
Like many trade professionals who've been around the block a few times, you've probably crossed paths with others in your industry and become quite friendly over the years (if they aren't your arch-nemesis competitor, of course). When business is slowing, reaching out and leveraging your professional network is one of the best ways of finding out what's really going on in your industry.
In uncertain times, the more unique perspectives on the current trade climate you can get, the better. Ask about how much work is available right now and what your peers think the future might hold if the industry continues this trajectory.
Make sure to pass on what you learn, too, as the only way to beat long periods of slow business is to support your industry and the people working within it as much as you can.
That's all for the doom and gloom of this article, though. We've covered what to do in anticipation of a business slow down. Now let's crack on with the meat of this article and answer the big question:
When business IS slow what do I do?
Here are five techniques you can use to make the best of a business slow down:
1. Re-evaluate how customers are spending their money in your industry
When the amount of work available is limited, shifting your focus to areas where customers are still spending their money is the best way to keep things going.
Changing focus sounds like a no-brainer, but for many trade or service professionals, this may mean radically altering the way you do business, at least until things pick up again.
For example, if your business primarily works on new installations, it might be worth focusing instead on the service and repair of existing items.
This is because consumers tighten their belts when things get tough. Where they usually buy something new, they instead look to make what they have last for as long as possible, which is where a savvy trade or service professional comes in.
By identifying what customers can't do without during periods of slow business and building your service around providing for them, you can quickly scoop up any extra work out there.
But this is just a single example. There are no doubt dozens of opportunities you can pursue by tailoring your service to meet customers' needs during periods of economic decline.
Just remember that the more work you put into adapting now, the less time you'll have to spend figuring out what to do if business is slow again in future.
2. Redefine what your service means to your existing customers
Leading on from our first point, a great way to increase your incoming work during a business slowdown is to look at what your customers rely on from your service. You'll likely discover several core reasons they initially transact with your business and return as repeat customers. Repeat customers are essential, so use this as an opportunity to keep them returning when times are tough by offering value for their continued loyalty.
How you add this 'value' is up to you, but the aim is to ensure that the service and experience you provide are so good that customers choose you repeatedly.
An excellent place to start is the process you use to respond to or follow up on work. By getting back to customers as quickly as possible, you actively show them that they are a priority for your business.
You can also establish price reductions or offer other incentives for customers who do business with you regularly or over long periods. It may sound odd to actively reduce your income per job when business is slow, but a repeat customer is nearly always worth more in the long run than the extra cost to keep them coming back.
3. Re-design your workday to fit a business slowdown
A problem many trade or service professionals face during a period of slow business is what to do with all the extra hours in their workday. You might think that being ready to take on any work that comes through immediately is the right decision, but your downtime increases if that work fails to appear.
When business stalls, it's always a good idea to invest more hours into creating as many avenues as possible for work to reach you. In other words, instead of asking yourself what to do when business is slow, ask yourself what you can do with all the extra time you now have.
If you've neglected your social media, now is the time to connect and build a buzz around your business online. Or you could revamp your Google My Business listing, making it easier for customers to find you with a single search.
You could even take the time to follow up on past quotes and see if there's any work you might have missed when you were busier.
Pick a strategy that works for you, and use all that extra time to explore every possibility available.
4. Re-develop your business operations
It can be hard to change how you operate, especially if your trade or service business has existed for a long time.
But continuing as if nothing is wrong during a business slowdown can have severe long-term impacts on your profitability, and sometimes scaling back is the best option.
This may be as simple as ordering less inventory than usual or ensuring spending within your business is more tightly controlled. It could even mean taking a step back from hiring new staff and focusing on your current employees rather than trying to push through a rough patch by growing.
If scaling back isn't an option, consider ways of cutting costs that involve running your business more efficiently instead. A job management software package can help you catch every billable hour and even get paid faster, making it a great asset even when work is slower than usual.
These choices can be tough to make and require lots of thought and research before deciding on the best path for your business. But the most challenging decisions often have the most significant positive impacts on your success when business is slow, so don't be afraid to make them.
5. Re-discuss changes with your team
If you're feeling uneasy about what the future holds during a business slowdown, chances are your employees are just as worried about what will happen if things don't pick up.
When making decisions that affect how your business runs or putting strategies in place to combat slow business, it's important to ensure your team is kept in the loop. Fear spreads quickly, especially when that fear is born from financial insecurity. Transparency is critical to quelling these worries and keeping morale high in your business while working through the problem of what to do when business is slow.
A final tip: Don't let the current economic climate get you down.
Always remember that periods of slow business don't last forever, and having a solid plan and an equally solid business that can weather tough times is worth more to your future success than anything else. Ask any fellow trade business owner who has been through a rough economic patch and they'll tell you the same thing. Australia's trade industry is ironclad, so no matter what the economic report on the television may say, this too shall pass.
Searching for more ways to combat slow business? Check out another one of our articles on bringing more customers into your business with easy-to-apply marketing tactics here.
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