The CFA Board of Directors met recently in Chicago for their fall meeting and preceded the meeting with what amounted to a 2 hours round table discussion on the economy and what steps they were taking with their businesses to survive the current downturn. Summarized below are a few of the points. You may be already have implemented some of these ideas.

1) INVOLVE EMPLOYEES. Most contractors are making across the board cuts in every aspect of their operations. Pay rates, paid vacation days, health insurance, and hours, are but a few of the cuts mentioned for both management and field employees.

These are tough decisions but nowhere is this more apparent, and controversial, than with benefits.

When you are getting this deep into cuts, consider involving your employees in the process. At a minimum, explain the issues and the options you are considering. You don’t need to go into numbers but you can related the obvious in generic terms such as % loss in business, etc. without laying it out for everyone to see.

Outline the cost cutting measures you have been considering including cuts at the management level. They need to know they aren’t the only ones that are suffering. If it boils down to lay-offs or pay cuts versus loss of a company vehicle, they will better understand if they know how much needs to be cut and that everyone must be part of the solution.

2) COMPANY VEHICLES. One of the benefits that employees often cherish is the use of a company truck to drive to and from work – often on company gas.

That can translate into a lot of payments on trucks doing nothing if business is down. Worse yet is that it may be the primary form of transportation for some workers. What to do? Mention the change well in advance of the cut and make certain that everyone knows that this isn’t the only cut and that they aren’t being singled out.

If you need to sell vehicles, consider letting the employee purchase them and offer them good terms. The bank or auto dealer probably isn’t going to do you any favors so let the employee have a good deal on the purchase.

There are some other negatives besides the employee’s attitude. One of those is the loss of advertising from having those trucks on the road. Consider a reduced price or a monthly bonus if the employee will keep your logo on the side of his/her truck.

3) LOAN TERMS. Most bankers don’t want to see you fail. Your assets are worth far less to them than they are to you. Negotiate with your bank. The three most common approaches are to pay interest only for a period of time; extend the length of the note; and, renegotiate a totally new note.

You shouldn’t, however, even go to your banker until you can show him the cuts you have made or are contemplating and a plan of action as to how you will meet the new terms based on current revenue.

If you base everything on a quick return to former times your banker will probably show you the door.

4) OVERTIME. Many workers rely on overtime to boost their regular paychecks. Careful monitoring of overtime by crews on a daily basis can save the extra wages and put more of your crews to work. If you monitor each crews hours you might be able to shuffle them around to avoid overtime and avoid lay-offs. Nothing is worse than one crew working overtime while another sits and collects unemployment.

5) GOOGLE YOURSELF AND YOUR COMPETITION. This isn’t necessarily a recession hint but it is certainly a good idea. Periodically “Google” yourself and your company, your competition, and your key employees to see what is being said about you. You might be surprised. You don’t need a web site to have a web presence.

If you attend a public meeting and make a statement that is picked up by the local paper, you might just be in the “Google” search engine.

Blogs and other public access sites might include someone posting or disseminating incorrect information about your company.

If your company was mentioned in a lawsuit, a newspaper article, a police report, or any form of public communications it will very likely show up on a “Google” search. Give it a try.

6) CUSTOMER BACKGROUND CHECKS. The last thing you need in this day and age is a customer who doesn’t pay. One way to reduce the number of instances of dead-beat customers is to run a credit check on them. This should be obvious for new customers but you might want to run one on someone who has been a good customer for years, in particular if they start to stretch out payments.

You might also consider a criminal background check. You aren’t looking for murderers but all you have to do is look at the headlines nearly every day to see that criminals can also wear suits and ties.

7) DIFFERENT PAY RATES. You are trying to get by with fewer and fewer employees and you are keeping your best men onboard but you probably also have them doing many different jobs, some which don’t necessarily rate foreman pay. Consider a division of jobs so that one employee might be getting paid different pay rates depending on the job they are performing.

8) RECYCLE, REUSE, CUT WASTE. How much material do you haul away after each job? Lumber, reinforcement, chemicals – all can be culprits.

First do a better job of estimating and allocating so there are less unused materials but also consider uses for the pieces that are left. Short rerods can be used for dowels, form anchors and a host of other things.

Make certain you get the maximum number of uses out of lumber – even short pieces. Construct some forms for splash blocks or other precast elements so that any extra concrete can be put to use.

9) DIVERSITY. Jobs are fewer and farther between so do what you can to get more work on each job. Retaining walls, both cast and CMU are possibilities, as are decks over garages, or decks over the basement.

Most forming systems have the equipment to build decks and there are other systems available that don’t require much in the way of special equipment. Consider installing the sewer and water installations from the main to the home or even the under-slab plumbing.

How many times have you had to wait for the plumber or another excavator just so you could do your job.

Performing some of the above tasks (plumbers must make the final connections in most jurisdictions) can make you some extra money and make your life and you builder’s life easier.

How about landscaping. Again, you have most of the equipment on-site. Do the finish grading, the seeding and sod, even plant the trees. You probably do at home, why not do it for your builder and get paid for it.

10) HIRE A MARKETING PERSON! What, hire additional people when I’m laying off workers?

Before you dismiss this suggestion, think seriously. You are probably traveling farther just to get the jobs you have and you are probably giving more quotes. The main thing you need is more opportunities.

There are a lot of qualified sales people who know your industry – they could come from suppliers or your own work force. Consider hiring them on a base plus commission to keep costs at a minimum. You will need to supply them with the tools they need to promote your company and follow-up with quotes when they bring you a customer but your time and cash investment will be minimal.

11) RISK MANAGEMENT. Consider hiring a risk management consultant.

These professionals are experts at looking for patterns, areas, and procedures that are particularly CFA Forum, continued risky.

Their recommendations could result in lower insurance rates, greater productivity, or both. If the CFA decides to pursue the self-insurance concept, the benefits are based almost entirely on risk management and paying only for the risks inherent in your industry instead of a much broader insurance pool.

12) BAD ATTITUDES. A bad attitude can be like a cancer or disease, spreading throughout a crew or the company. It is important to single out people with a bad attitude and work with them to correct it or remove the cancer.

One company, which felt they were offering their employees a fair deal, dealt with individuals with bad attitudes by offering the trouble-maker two week paid to go look for a better opportunity.

Their only requirement was to come back and report their findings. In most cases they found out that they didn’t have it so bad and stopped their disruptive actions.

ARE ANY OF THESE IDEAS HELPFUL? Would you consider participating in a regional event where information and ideas such as this are exchanged? If so, give Jim Baty or myself a call or email. We are considering a concept where we would have two or three different round tables of non-competing companies simultaneously exchanging ideas. The cost would be minimal and we would plan it so it could be conducted in a single day. Contact us at 319-895-6940 (866-CFAWALL) or by email at esauter@cfawalls.org and jbaty@cfawalls.org.