by Henry Chew

Created on: January 25, 2010   Last Updated: January 27, 2010

In this current round of global economic recession, there is no doubt that many industries will suffer. This includes small time contractors that specialize in fabricating and installing steel structures. Many related jobs and government projects will probably be delayed or put off. This makes works like civil structures, ship repairs, oil rig’s topside and jacket, harder to get. Even if contractors manage to land on a job, the possibility of funding the work and not getting paid back is quite high. In these bad times, it is best to cut down on risks and plan your next move, cautiously. Here are some strategies to keep your business afloat while waiting for that silver lining to appear amidst this round of economic uncertainty.

Take small jobs to keep the business afloat.

Chances are that the cash flow is tight. This is the same for everyone including clients and the government. Right now, bidding and accepting big projects might not be a wise move. Your business will have a tough time funding it. Even if you managed to successfully fund the project and finish it, payment will most likely be late and your business will suffer just the same. So, it is best to keep cash aplenty and be cautious.  Accept only small contract jobs that help keep the business running and your employees busy.

Upgrade, Retain and Value Employees.

I am sure that all bosses out there are worried sick about their employees during these hard times. Questions like, “Am I able to provide for them during these difficult times?” or “Are their families coping well with the situation……?” are all too common in the minds of business owners. In this line, highly skilled employees are hard to find. Structural engineers, qualified welders, quantity surveyors, drafters are all highly sought after. The good ones are hard to find because their qualities are based on their long experiences and track record. Trust that in the long term your business will benefit more, if you retain these skilled people.

If it has become financially too difficult to retain them, try to help each other by working out a plan that benefits both staff and company. Try devising a plan which let employees work 2 days rather than 5 days a week. This win-win situation will help the employees keep their much needed jobs during these trying times. The business will benefit from the loyalty of those who stayed. At the end of the day, you will end up with much hardworking employees who look up to their boss who cares during hard times.  

If possible, encourage employees to upgrade themselves during the economic downturn. Since not much work can be done, they might as well make use of their time and upgrade themselves. They can be encouraged to get a degree, take a professional course or earn a certificate related to their work scope. When the situation improves they can expect better pay and that helps.

Stock steels

Structural steels like angle bars, steel plates, I beams, U channels etc…. are cheap now. World steel prices are coming down because of overproduction and less demand. If you have the cash, buy in some common sizes of structural steel now. When the market gets better, the price will be high again and you will profit from cheaper material costs.

There is no way of telling for sure when this round of economic downturn will start to wane off. But business owners should expect the worse and pray for the best. One thing for sure is that it will take years before we are near a full recovery. So, for the time being, it is advisable to be less adventurous and more grounded.   

Learn more about this author, Henry Chew.
Click here to send this author comments or questions.