As I write this, the first major effects of the economic flood, drowning our U.S. economy and other national economies, are being felt.
From the home mortgage market being essentially frozen to commercial real-estate projects being abandoned, leaving the subcontractors holding the bag, down to replacement and remodeling markets suddenly vanishing because home and business owners are afraid to spend a penny, our world as contractors, project managers, estimators and just poor working stiffs has been turned upside down overnight. We're all going to have to cope with this new reality.
But what new reality is this “new reality?”
Fate, dumb luck and the powers that be haven't decided the specifics of that yet, but I'm pretty sure it will include a handful of new business paradigms.
First, all new construction will be driven by actual local and national market demand, not by speculation. This means a definitely smaller and shrunken pie in most local and regional markets, but there will be a pie, nonetheless, to divide up. You might not like the new filling or crust, but there will be enough to go around for all that are left at the table.
Second, success or failure in the future will depend on what you do now to hang on with some liquid and goodwill assets intact for when the recovery eventually begins. What has happened in the first stages of this Great Depression redux has had as much to do with losses of face and faith as it had to do with straight economics. Fear begets fear. It's like a giant dam breaking, sweeping along all those in its path that didn't see those first few cracks before it gave way.
Those who had good reputations as being honorable, honest and decent firms and folks will come out of these circumstances in even better shape than when they went in. Reputations for keeping one's word, for being stable and for not being willing to shaft somebody over an extra nickel will be worth even more when it's all over because great reputations will help mitigate fears of instability on the part of potential customers.
Third, our business has been stripped bare of its excesses. That's a good thing. All the fancy new offices, trucks and high-fixed overheads are sinking the firms that bought into the myth that the great times would last forever. In the future, there will be no shame, and it will also be a selling point for a firm, even a large mechanical firm, to operate out of a modest building with none of the trappings of money not well-spent.
This is all well and good, but what about you, my project management and senior estimating brother, what about you? What do you need to do to survive, to keep your head above water when the next series of large waves hit?
The most important things you can do right now are relax and don't panic. This might seem trite and cliché, but I'm serious. What's going to happen is going to happen. You can't do anything about the macro events, you can only do something about how you let the events affect your professional and personal life. If you panic, you're going to make decisions based on fear and not common sense. That will cost you a lot now and even more in the future.
If you have a job, even if your company is on shaky financial ground - for Pete's sake - don't quit it right now no matter how ugly things look. Right now, a job is a job, and income is income. Anyone who has even a few dollars in his pockets is king. Right now, a salary isn't a salary, but cash flow, and you need cash flow to help you survive this storm of disastrous economic times. Jumping ship before it actually sinks to another ship is a calculated risk since you don't know how many holes the other ship has in its hull. At least your head is above water where you're at.
Don't sacrifice your continued long-term strategic game plan for immediate short-term tactical moves. I'm talking specifically about maintaining any and all professional licenses and certifications you may have. If you let any of them lapse right now (I know they're expensive), you'll be in worse shape when we emerge from this mess because most licenses and certifications are much harder to re-earn back. Without them on your resume, you simply won't be as employable as you were before.
Keep your fences mended and your networks strong. Those who have been your fiercest competitors in the past, finding themselves in the same boat, can become valuable allies. Reach out to them and offer to help them if they'll, in turn, help you. Don't be afraid to make the first move. The worst they can say is “no,” and if you build new quality professional friendships and alliances now, you'll be in the catbird's seat once things have settled down.
Finally, find comfort in the fact that what we do as project managers and estimators can never be outsourced. All new building construction and service and remodeling is local, which requires local talent at the job site to be able to actually do the work. Not that the next couple of years, regardless of who may be elected President of the United States, won't be chaotic and full of massive change. But in the end, we will all still end up with decent jobs because we do what only a handful truly have the temperament, knowledge, intelligence, experience and desire to do.
Kent Craig is a second-generation mechanical contractor with unlimited Master's licenses in boilers, air conditioning, heating and plumbing. You may contact him by telephone at 919-521-6895 or via email at [email protected].