Optimizing profits in the slow season
Rain, snow, sleet and hail may not stop mail delivery throughout the year, but it does have a significant impact on businesses in the construction industry. This is especially true for those of us that deal with harsh winters followed by unpredictable spring weather. Although we joke that we may see three seasons worth of weather in a single day, it is difficult to find the humor when it begins to impact our bottom line.
For many businesses this time of year, the drop in temperature also means a drop in profits. Although this may not be not true for everyone this year, it is still a good time to take a step back and review your operations and expenditures. As we look forward to the new year, here are some strategies to help optimize your profits and ensure your business can survive the slow season.
Understand your expenses
Minimizing your expenses is likely the first thing on your mind when the budget is tight, but it should be something you are thinking about throughout the year. The first step is to understand your budget. An article in the Houston Chronical advises small business owners to categorize expenses. By breaking expenses into clear categories, it is easier to identify trends and review spending patterns. The categories recommended in the article are:
- General overhead
- Overhead labor
- Production overhead
- Production labor
Take advantage of internships and seasonal help
College students are often looking for an on-the-job experience that will help them build their resumes while earning spending money. If you have work that could qualify for an internship, this is a low-cost way to help students while also benefiting from their willingness to learn everything from skilled tasks to general administrative work. This mutually beneficial arrangement can also serve as an on-the-job interview for students who may want to become full-time employees after graduation.
Seasonal help in the construction industry helps business owners manage the peaks of the busy season. Often seasonal help includes motivated college students who are home for the summer. These same students may also be coming home over winter break and looking for a short-term job opportunity. This is a great resource to tap into if you are short-staffed from employees taking paid time off over the holidays, or if you have winter cleaning or inventory that needs to be done while business is slow.
Finding opportunities to outsource goes hand-in-hand with minimizing expenses. According to an article titled Outsourcing for Great Profit on sitepoint.com, outsourcing allows businesses to:
- Access skills and services not available internally
- Increase the amount of work completed by your business, which translates into more income
- Cut costs
All of these will help you increase profit margins while decreasing workload. If you choose the right partner, outsourcing can also help you build your business’ reputation. Select a partner with exceptional customer service and a commitment to quality, and your business’ reputation will begin to attract new customers based on positive reviews and referrals from satisfied customers.
Re-evaluate your marketing plan (or take the time to develop one)
When you are juggling projects and struggling to meet deadlines during your busy season, it is easy to convince yourself that you don’t need to have a marketing plan. In reality, an effective marketing plan can leverage the momentum of your busy season and help increase sales during your slow season.
Keep in mind, marketing does not just mean placing ads in a trade publication or promoting your business on social media, it should also include strategies for connecting with potential clients who have not yet committed to purchasing your products or services. Take advantage of the slow times and reach out to these potential clients. Take them out to lunch, give them a call or send a personalized note with information that you know will be of interest to them. Keep the momentum going during the busy times by asking your current clients to give testimonials and refer your business to their friends, family and coworkers.
The L.E. Smith Company
At L.E. Smith, we are committed to helping your business become more profitable as a result of your partnership with us. If we can help you optimize your profits, establish best practices or realize the potential of partnering with a single-source supplier, contact our team at https://www.lesmith.com/contact-us