Economic Downturn - Remain optimistic but be prepared

Many business leaders in the Scottish Construction and Property sector are wondering if the industry is recession proof. Despite all of the depressing news about the credit crunch, reduced rates of growth forecasts and rising mortgage rates the Scottish Construction Industry remains buoyant and optimistic. The recent RICS Construction Market Survey showed growth slowing across the UK except for Scotland where surveyors were more positive about future workloads.

Is Scotland therefore immune to the global financial difficulties or is there a delaying effect on the back of current high levels of construction activity? This is a difficult question to answer. No one wants to predict a coming downturn as it might be a self fulfilling prophecy. There is no doubt that some commercial activity is being put on hold and Miller Group reported an oversupply of 2 bed flats making that part of the market flat.

Can history help find an answer. The last major downturn was in the late 1980’s early 90’s and only a few of today’s business leaders were in management positions then and some were still in education. Interest rates in 1988 were at 9%and then rose almost 80% to 14% in 1989 and there was a dramatic 33% slump in house prices. The real problem then was a dramatic fall in the commercial market in England with contractors going overnight from turning away work to being unable to find any new work at all. The effect in Scotland was serious but did not have the same massive impact as workloads had not grown as quick anyway.

I was the Regional Director for Norwest Holst at that time and can recall some of the impact on the industry. “One of the most difficult things to deal with was the sudden downturn in work as nobody had the experience of managing this situation. Everybody had spent 10years growing their businesses with positive cash flow which offset some of the problems. The downturn meant cash flow reduced and high interest rates made borrowing very expensive. Companies had to cut back and there was round after round of staff redundancies. This was a very painful time and the Scottish Construction Industry was reshaped in the coming years as a result of this period. Big names changed, my own company Norwest Holst pulled out of Scotland, Miller Group totally reshaped their business, Tarmac and Wimpey swapped their housing and construction portfolios, Taylor Woodrow pulled out of main stream construction and names like Lilley disappeared.”

Based on the experiences at the time I would recommend all businesses to consider the possibility of a downturn and to have a strategy in place for dealing with such a situation if it happens. Every business should review their strategy on a regular basis but when things are going well and everyone is busy a review seems to be unnecessary. In times of change this can be a very serious omission and leave the business vulnerable and unprepared. Don’t repeat the errors of 1990 be optimistic but be prepared.

if you would like a free copy of our Strategic Marketing Workbook to help with your strategy review please email at brian@businessfix.co.uk

Why not bookmark this page for future reading.

Brian

Be mean with your time

Everyone knows that their time is their most precious resource, but how many of us give time away?

On Wednesday I met with one of the business leaders that I coach. How was she doing, not particularly well. She had been through a very busy period, running from meeting to meeting and not achieving her important objectives. Not sleeping well and failing to use the time set aside for exercise. Why was she doing this? Because she is a really caring and thoughtful person who looks to help everyone.

We talked through the situation and about time management. She knew all the theory but was being driven by other people's agendas and the hectic schedule needed to build the new business that was kick started at the beginning of the year. The strategy was being threatened by new opportunities and ideas that might be good to look at.

How can she retrieve the situation?

Be selfish with her time and use short term objectives to identify the priorities when accepting invitations to meetings and events. She needed to realise that her time was more important than everyone elses' time (except for clients).

• Let people come to her and don't allow meetings to over run.
• If it only needs 5 minutes only use 5 minutes.
• Delegate every thing that someone else can do
• Ensure there are gaps between meetings
• In town use a taxi, or get someone to drive you
• Keep time for you

All very useful tips, but the key to using your time successfully is to have a clear strategy with short term and long term objectives. Use these to prioritise your time and plan your diary.

Look at your diary for the past month and see how it could have been better organised. How much time could you have earned for yourself? how much would it have been worth?

Thanks for visiting

Brian