Weathering Economic Turbulence: 3 Practical Strategies for Contractors

Transcript:

Weathering Economic Turbulence: 3 Practices for Contractors in Uncertain Times

Introduction

Hello, this is Jayme Dill from Contractors Business School, and today I'm going to be talking about weathering this economic turbulence that we've been experiencing.

It's been a little bit crazy, and it's what? It's April 20th, 2025. In case you're listening to this later, we're in the world of tariffs of economic, potentially slowdowns the R word, which strikes terror into the heart of business owners in this, especially the contractors and trades that I work with, right? All of this is up in the news and in our faces on a very regular basis.

So I wanted to connect with you and share some practices because what I'm seeing among my clients is quite a spectrum of responses. Many of you aren't directly experiencing any impact right now, but you're still feeling wary that our word is out there. We remember 2008 maybe, or we've heard stories of it, and that's what brings some of the people I'm talking to are really catastrophizing.

Even one client I work with, we joke about, but I'm not sure it's such a joke of PTSD. He came damn close to losing his business since the 2008 downturn. So he's really doing everything he can to keep his mind out of catastrophizing and imagining worst case scenarios that have return.

But many of my clients are so damn busy that they don't even have time or the desire to think about it. So they're not really bearing their heads in the sand. They're dealing with business as it is and maybe just kind of hoping it'll blow over. But it's still important even when we're busy, to be paying attention to the bigger, broader trends in our industry, in our culture, in our economy.

So wherever you are on that continuum, I'm going to share three specific practices. Actually more than three. I'm breaking it down into three areas and sharing a couple practices in each area.

But these are things that you can implement right away that can help you not just survive, but potentially emerge stronger. And these practices align with the four cornerstones framework that I use with clients. They've helped hundreds of contractors, business owners, whether the ups and downs of business, because whether it's all of us together going through an economic downturn or just an individual client or individual business, losing maybe a key account or a key employee or a downturn in their specific market, their geographic area, whatever it is, ups and downs of the nature of business. And I've used these tools a lot with clients over my 30 plus years of coaching.

Practice #1: Power Cornerstone - Mental and Emotional Strength

Practice number one is tied to the power cornerstone, and this is about you. So if you remember, the power cornerstone is all about your leadership foundation managing you because how you lead in general matters, but especially how you lead this matters and how you lead you determines how you lead this.

I hope that makes sense. There's a lot of leading going on there, but in turbulent times, it's really critical to keep your mind and your eyes clearly focus on the outcome that you most desire in what the military calls VUCA environments.

I think the origins of VUCA is, I'm saying vuca, VUCA. I should be careful there, right? I think the origin is military, but I've heard it applied a lot in business. And the VUCA stands for volatile, uncertain, complex and ambiguous. And when we're in an environment like that, which I think our current situation definitely qualifies as an environment like that, when we're in that, we get stirred up as humans, we get stirred up mentally and emotionally.

So this is not the time to lock down and pretend like it's not happening. Instead, it's the time to use all of your mental and emotional tools.

My Mantra

Personally, I developed a mantra, actually, I did this at the very beginning of Covid when we were in another VUCA environment and everything was shut down and we weren't sure how it was going to affect our health, our wellbeing, our businesses, the economy.

I developed a personal mantra that served me, and then I've shared it with a lot of clients. And what I say is I don't know exactly what's going to happen. I don't know how difficult it's going to get. I don't know how ugly it's going to get, but I do know that I will do everything possible to come through this stronger and more resourced than I entered into this with Covid. I was like, I don't know how long it's going to last. Like I said, it was like, this is crazy land, but I know I'm going to do everything. That was my mantra through that, and it served me well.

And like I said, it served my clients that I've shared it with who've used it. So it's not about blind optimism. It isn't about I'm going to align the stars every night because it's backed by action and by tools.

Tool #1: Eyes on the Prize

So what this means is doing things moving into action that brings that determination and that intention to life. So the three that I use most myself and with clients, first and foremost, eyes on the prize, when difficult emotions and thoughts arise, which they will in vuca, if you're human as quickly as possible, we go back to our vision.

What is it that I want? What is the business that I want to be having? And we take maybe five minutes each morning to visualize your business, not just surviving, but emerging stronger. You see yourself making good decisions. You see yourself pulling your team together. You see your processes become more efficient because again, this isn't woowoo BS, this is visualizing is the precursor to action.

So if we visualize it, then we need to give ourselves someone a little kick in the butt to move into action. But we have a path, a course of action to take. This is why it's a favorite with elite athletes. They're visualizing, right? They're visualizing their outcomes. They're going through it with their music on bouncing their heads before they're competition, right? That's what they're doing. It's very, very helpful not only to manage the noise, right? All the distracting noises of, oh my God, it's going to fall apart. I'm going to be in the bankruptcy or whatever, all the noise and the fears, and instead, focusing on where you want to be going.

Tool #2: Control the Controllables

This ties to the second tool for you to use with yourself, and that is control the controllables. And this is a commitment to focus on what you can control rather than what you can't.

So again, athletes use it. A lot of the performance, a lot of the mental tools that I use with my clients, I've gotten from performance elite coaches who performance coaches for elite athletes, easy for me to say.

So I got really into that for a few years and started really bringing over some of those tools for myself and for my clients. So this is rather than hyper focusing on the news, we got to keep our eyes on it. We got to keep our eyes on that. But rather than hyper-focusing on the news and what you can't control, economy, politics, whatever, build the hell out of your business tools, your leadership.

So the actual process of figuring out what you can control and what you can't is really important. You just do it. Good old fashioned. Create two columns. This is what I control, this is what I can't control, things I can't control.

And then writing down everything that you can think of that your mind dwells on a regular basis or that you're trying to take action on a regular basis and put it in which column it is. Can I control it? Can I not control it? And then develop a course of action for the controllable column and then practice the let go ritual for the uncontrollable items.

Things I cannot control, which go back to the previous practice I had, right? Eyes on the prize. Just bring your head right back into controllable and let go as quickly as possible the uncontrollable. These are mental practices that will help you, but they're practices. You got to hone your muscle, build your muscle around this.

So elite athletes, again, practice this regularly, especially before high pressure competitions keeps you from wasting mental energy on BS. Stuff that you can't control. Weather, competitors, economy, whatever.

Tool #3: Implementation Intentions

And then the last one I'm going to share under this first area of the power a new managing you is implementation intentions. This is also called if-then planning. And it's a structured approach, proactive approach to decision making that helps you get out of the burden of in the moment choices.

So instead, you're planning ahead, if potential, what are the potential challenges or obstacles that may arise? And then say, if this happens, then I will do X. So we're thinking it through ahead of time, and then we're mentally rehearsing for these plans.

Again, we're not catastrophizing or fueling up our fear. Instead, we're saying, if revenue drops below x per month, if profit falls below X per month, then I will make the cuts that need to be made in order to rebalance my profitability.

So again, this conserves mental energy. It helps you be prepared for high stress situations. It prevents decision or analysis paralysis, and it creates automatic responses that bypass emotional reactions. I'm not going to say aren't going to have emotional reactions, but you have at least a plan, and you're not trying to make good decisions when you're at your weakest IE in a fear-based emotional response.

Yeah, yeah. So the last thing I want to say about this area of power is remember, your business can only be as stable as you are. Your team is looking to you. They can handle difficult truths delivered with confidence, far better, better than they can handle uncertainty or mixed messages.

Allow yourself, give yourself the grace to be human. If you're like most of the clients I've worked with, you're going to have your freak out moments, but you use these tools as much as possible will strengthen your resolve, your stability, and minimize the freakout moments.

Practice #2: Process Cornerstone - Strengthen Your Network and Marketing

Practice number two, we're going to be focusing on the process cornerstone and the process that I see that needs to be revved up, reinvigorated, re-imagined. Let see if I can find any more words more than any.

In times like this is your network and your market, your marketing, and revving up those processes. So there are a lot of processes depending on the business. There are a lot of different processes that I might look at and fine tune or tweak during a time like this, depending on what's going on within the business. But this is one that's pretty universal that we are looking at and making sure it is robust as fuck. Excuse my language, this happens with me.

Revitalizing Your Referral Network

Yeah. So let's just be honest here. In the strong economy that we've had with pipelines full with more bid opportunities than most of us can handle with backlog, all this great stuff we've been experiencing, many of us have gotten a bit lax about having a robust nurturing process for our referral partners and consistent marketing.

Many contractors I work with have never really developed a robust marketing or referral partner network and processes around this. So wherever you are, now's the time to either dust it off and strengthen the process or really look at how do I build this?

Again, don't wait until the economy really starts sliding. Do it now. Build this up. If the economy slides, you'll be further ahead. If it doesn't, you will have the great opportunity to have even more work than you're already busy with and start really selecting out the projects that you best can deliver and that are best for your company.

Or if you're just like, yeah, I don't want to do that, then you build the fricking process and you have ready to turn on at any time when if needed.

So a great way to start this is by making a list of your top 10 referral sources from the last couple of years, and then start scheduling a time to nurture these relationships with what does that mean, right? It means getting together with someone if they're open to it, at least having a call.

I always call it like shooting the shit, but it's not just shooting the shit. It's really connecting with someone, a referral partner, asking how it's going for them, not necessarily how it's going for them. Do you have any business for me? Kind of thing. But really how it's going. You're building relationship at this point. How is it going? Can I take you out for a beer?

Would you like to go out for lunch? Whatever fits within the nature of that relationship. Some of my clients work with construction managers as their main clients and aren't, a lot of times they're not even the same geographical area. So it's not the beer or lunch kind of crowd, but instead it's just a regular touch base.

How can I help you out? What problems are you experiencing that we might be able to help you with? Even just asking if you can connect them with someone else in your network, you're really starting to build that relationship and cross networking.

The thing that I find that's really, really fascinating to me with this is my client base tends to fall in one extreme or another with this. Some are excellent and just bind their own nature, do this. They're networking, they're cross referring, they're helping people out.

They're staying in touch. They really enjoy the relationship aspect. Others, it's like pulling teeth to get them to do that. I would fall in that camp. It's like, we can psychoanalyze me at another time. I have my thoughts. But if you're in that camp, then finding the way that is the most natural for you to engage.

So for me, it's more about actual, if there's a business to business reason, then I'm all about what can I do to help them. If it's social, not so much for me. So finding what's natural to you. And then also if it's not your thing, give yourself a push, right? Set a goal of X number a week. Don't wait until you have the time. Make the time, put it on your calendar.

Refreshing Your Marketing Approach

So that's the networking. The reason I bring that up is that's so huge for most of my contractors. This is where they get so much of their work is from other people within their network. But we don't want to forget the pure marketing front, and this is the time to reexamine your marketing process all the way from what's our messaging to how are we, where do our leads come from, and how do we drive that process?

It's more than I'm going to go into today. It's probably a whole nother audio or webinar. But the main thing today I want to say is I'm shaking my finger at you. Do it, do it. Don't wait. Get it robust now. Get it ready to roll out it, when and if needed.

Practice #3: Performance Cornerstone - Data-Driven Decisions

Practice number three. So the third practice comes from the performance cornerstone, which is all about making data-driven decisions and using data at any time in a business. As if you've heard me talk about the importance of this before, you know that measuring, monitoring performance, I value this at all times in the business. To me it's like playing a game and not keeping score or tracking data. Watch anything sports related. And if you know me at all, I don't very often, but when I do, I'm amazed at the data and the scoring. It's really fascinating to me and not surprising. If you want to improve anything, you need to be watching those numbers.

So in relationship to weathering storms, this is really important and I'm going to be talking about three specifics that I see people get tripped up on during downturns. And those are tools, skills and willingness.

Ensuring You Have the Right Tools

First tools, you have to make sure that you have the tools and the processes in place to gather meaningful data about your business. This means going beyond just looking at your bank balance. That doesn't mean a whole heck of a lot. It means something, right? Sometimes it means the difference between a good night's sleep and not so it means something.

But we need more than that minimally. And I say minimally you need your monthly profitability and how it's trending and why, and your cashflow. So if your financial reporting is weak, you're flying blind and flying blind at any time in a business is not great, but especially in turbulent times. So we want to get the systems together. We want them to be as accurate and as robust as possible for your size of business.

Now I work with businesses of a pretty wide variety of sizes. Some people have a full staff to create, monitor and forecast data for their businesses. Isn't that awesome? But that would blow away many of the businesses I work with that are doing just fine with a part-time bookkeeper, right?

So depending on the size of your business, you need to get the appropriate scale of tools for most. Like I said, this means absolutely positively, minimally. I'm a little emphatic about that, aren't I accurate and timely. PNL timely means you're getting 'em mid month, following the month that is being reported. You're getting a balance sheet and you're getting cashflow on a regular updated basis. We can do a lot with those three tools for others with a full staff. Those three tools aren't going to do it for you. You've got data coming out the ying yang and we've got an analyst to cover it, et cetera.

So no matter what the level of tools that your business needs and has, first you got to get it in place, make sure it's accurate, make sure it's timely, whether you have the full data reporting or if you have minimal, again, depending on the size of your business. But the second tool is really about you as the CEO, the founder, the owner, whatever you have, use it.

Developing Your Financial Skills

Which brings us to the second point skills. Now, one of the things that I find really interesting in working with a business owner for the first time is how many of them come in kind of sheep sheepishly saying they don't really fully get what's going on in their financial reporting. Sometimes they really just don't understand it. They don't make time for it. But there's this kind of embarrassment. It's more common than you would believe, but that doesn't mean it's good for you or your business, right?

We don't want you flying blind and making decisions. We want you upgrading your skills. If you find yourself in that place, getting some training, bringing in outside help to help you understand what's going on, whatever you need to do to get yourself and your own financials and data skills to a leadership level. You don't need to be able to necessarily create the data. You need processes and systems in place, but you as the owner, as the CEO, you need to be using the data and making decisions from it. That takes skills.

So like I said, this is critical. I can't really stress it enough. We want to be watching the trends. We want to be catching them early and we want to be knowing what to look for and how to interpret the data. So when we're watching trends, we're not reacting to individual data points.

This is like the stock market going up and down and stuff. Your analyst, your broker will tell you that they're watching the trends and when is it a good time to respond to that? Same thing in your business. You're going to have the emotional volatility that we talked about with Cornerstone, the first cornerstone. So you're going to, if you're like most humans have that emotional volatility, but you want to be able to watch for trends, the rule of thumb that I use is three data points starts a trend. One data point is just could be an outlier. It could be the beginning of a trend. Second data points starts to clarify us. But by the third data point, if you visualize that in your head, you've got a line going somewhere.

If you've got a trend, you've got a line going somewhere. If it's just bouncing up in town, we don't have a trend yet. So when you have a trend is when you want to start looking at just making decisions from this data.

The Willingness to Make Tough Decisions

Which gets us to the last point in the performance cornerstone that I want to talk about. And that is willingness. This ties back to the first cornerstone again, and specifically mental and emotional strength. We may be called on to make difficult decisions and we want to have the strength in place to do that when and if it's needed. And often this goes to the if then planning that we talked about above. It means having predetermined triggers for when you will take action. The if then scenarios. For example, if revenue falls below X for three data points or more, we will reduce revenue to hit profitability, to hit breakeven.

Having these triggers in place ahead of time will help you think more clearly and help you make. What sometimes in downturns are difficult decisions. Since the 2008, nine ish, whatever, I think we're all calling it 2008. For some of those it was longer and extended, right? It was during that ugly period. I watched businesses not make this call soon enough, waiting for the next month, the next month.

Since then, I joke with my clients, it's like, you know what? During our downturn is the time that you are not going to want to spend money on coaching. But I'll tell you what, fire me now. Save your coaching dollars and call me back up when the downturn happens. Because the willingness to make these difficult calls at the right time to potentially save your is worth some coaching dollars. I'm not pitching myself here, you guys know whether you need a coach or not.

But this is a time where having someone objective in your corner can really help you around that willingness.

Conclusion: Strategic Preparation Beats Reactive Response

Alright, so the performance cornerstone. We talked about skills, tools, and willingness. We've talked about a lot today. The three practices of maintaining mental and emotional focus and strength and some tools that you can use to do that. Creating robust networking and marketing processes and making sure that that's being utilized. And then last that we just talk about making data-driven decisions. All of these tools are going to serve you and your business no matter what happens with this economy.

And I hope like hell, it just continues doing what it's been doing over the last few years. And all of you are so busy managing capacity in your pipeline and more business coming in than you need that. That's a different challenge that we'll be, will be working with.

But no matter where it goes, you can be prepared and use these tools. So the contractors who not only survive but really create more of a solid foundation during economic uncertainty are the ones who approach it strategically rather than reactively, the ones that come in with tools and plans.

So as I've said many times during this talk, I don't know what's going to happen. Nobody does. But I do know that implementing these practices will help you out if you found this valuable. I'm going to be following up with some more specific strategies around each of the four cornerstones in your email over the next few weeks.

In the meantime, I'd love to hear back from you, which of the practices are you using? Maybe you have questions about some of them. Maybe you don't think that some of them will work for you and want to understand more about why I'm suggesting it. Or maybe you have different challenges in your business, you'd love to talk through. I'm here. I'd love to hear from you.

And in the meantime, thanks for listening. And remember, if you're listening to this, you've already built a business, right? You've already built probably a successful business and you have whatever it takes to weather this storm and emerge stronger. Just continue to build the tools and the skillsets that you are using already. Take care.