EZG Manufacturing
Federated Insurance
Fraco USA, Inc.
Hohmann and Barnard, Inc.
Husqvarna Construction Products N.A.
Hydro Mobile, Inc.
iQ Power Tools
Kennison Forest Products, Inc.
Mortar Net Solutions
Non-Stop Scaffolding
Southwest Scaffolding
Tradesmen's Software, Inc.
September 24, 2011 8:00 AM CDT

It’s comeback time!

Contractor tip of the month


Have you hit bottom yet?

Have you hit bottom yet?
Has this recession kicked you in the teeth like it has almost every contractor in the country? Have you hit bottom yet? And, where is the bottom?

There are plenty of horror stories out there about how bad each of us got slaughtered during the last three years. The bigger your company was, the worse you got drained. (That doesn’t work out very well for a fellow like me, who has several companies as the world comes crashing down.) When this happens, you either move fast to make cuts and changes, or go out of business even faster. Many decisions I had to make weren’t popular, but they had to be made. However, due to my open-book management approach and incentive-based pay systems, my managers were experiencing the down turn with me. That made it easier as they could see in advance we had to adjust to the changing times.

With the banks and bonding companies breathing down my neck – telling me they were going to stop extending credit and bonds to the construction companies, and due to the blood bath two of my companies were taking, it was like we were down 24-7 in the last quarter of a football game. One company, alone, had dropped from $10 million in sales to $3.6 million virtually overnight.

I remember the meeting during which I told my people we had to do the unimaginable to save that company. We were going to have to turn sales around, even though no one was buying. That’s when a dose of reality hit me like a freight train: The bad economy was here to stay. The first thing I had to do was stop blaming the sales problems on the bad economy and learn to adjust to it. In other words, I had to find out what was still selling and adapt to it. I told my controller and CFO, “If that ship is going down, I am going to be on it as the captain always goes down with the ship.” I was going to work hands on, daily, with this one company until we fixed it, or suffer the embarrassment of failure together with the managers of that company. It was time to develop a comeback plan!

The plan included making enough cuts and changes to drop our break-even point from $700,000 per month to $400,000 – not an easy task to accomplish. On top of that, we had to take sales that had dropped from an average of $800,000 per month to $200,000, back up to $500,000 per month. It was unthinkable that we could pull it off, but I rolled out the plan anyway.

Now, I will have to admit that I had a hard time believing my own plan at the time, but I knew we had no choice but to make it work as the alternative was fatal, not only for this company, but also for my other companies. Everyone immediately got on board with the plan, and only three months after rolling out the plan, we brought sales to the $400,000 monthly break-even point. Not too bad, considering we had 18 months of continuous losses when the plan was rolled out. Then, eight months later, we started exceeding our new $500,000 per month goal and have made a nice profit during the last six consecutive months. Wow, talk about a close one!

Is it comeback time for you? If so, here are a couple tips. First, look at your situation for what it really is, while understanding that we are now living in a different economy that is most likely here to stay. Second, make a plan based on that reality, and carry it out. You may be surprised by what your people can do when they have a “comeback” plan and a leader bold enough to lead them through it.

About the Author

Damian Lang is a mason contractor in southeast Ohio and inventor of many labor saving masonry systems and products. Lang has served as the Marketing Committee Chairman for the Mason Contractors Association of America. He is also author of the book Rewarding and Challenging Employees for Profits in Masonry. To network with Damian on contractor tips or tips you have and would like published, contact him at or 740-749-3512.


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