Monday, January 24, 2011

The State of Our Industry

Another year has passed us by, and we are no better off than we were one, two or three years ago. As a matter of fact, too many contractors find themselves a lot worse off and a future that is bleak, if not unpredictable.

To be honest because someone has to be, gone are the promised results from trillions in dollars and whatever else this Administration has promised.

Gone is the promise that if we "invest" unemployment would not reach 8% Instead, we have a wildly underestimated unemployment rate of 9.6% To be honest, and as I have said someone has to be. Unemployment is somewhere around 16% (M6 numbers) and if we take into account all the small business owners who are unable to earn enough and going without, it is encroaching 25%

Gone is the promise of "shovel ready jobs." Instead, hard-earned taxpayers dollars have been wasted on highway signs boasting of results never produced and their insidious lies to the American people, and other pork they shoved down our throats.

Gone is far more than I believe the average American realizes.

Had we a crystal ball, possibly we could have seen through the inability and the inexperience of this Administration to improve the American economy. Maybe, people would have seen the fallacy of Green and LEED. Let's be honest (since someone has to be), until costs come down, demand goes up and there is an incentive (taxes) Green, and LEED is D.O.A., or at best, hemorrhaging profusely.

Good News and Bad News

Unemployment will not be addressed until Americans feel confident that Washington has a plan to control spending, balance the budget, and reduce the deficit. Meanwhile, big business will continue to keep its operations employment lean and hoarde their earnings, and small business will pay the price for being small and being the target of progressive politics.

If anything, I hope that you understand that you cannot wait for the Big Government of Washington to solve your business problems. Instead, you need a plan of your own. Here is why.

Housing will remain in a flux for most home builders until the inventory is reduced, or they come up with a better mousetrap. That mousetrap will have to be small, affordable, efficient, convenient and close to the homeowners place of work. Okay homebuilders, I just gave you the formula for your success.

Remodeling, renovating, and repairs will lead many to sales providing . . . they market properly. People and business will stay put until they feel confident. They will remodel, renovate, or repair what they have. If you are already in this sector of the industry, low expenses and smart marketing will be the key to your success.

Commercial construction will be plagued by its inventory and this is a major concern. Delinquencies and the failure of our banks to lend will keep the return of this sector in a head hold for years to come. Again, look to remodel, renovate, and repair to commercial properties as your major source of income. Low expenses and targeted marketing will be your tools for success.

Many were pinning their hopes for survival on the Promised Land of Infrastructure. With a broke Federal government and many state government's teetering on the abyss of bankruptcy, forget it because it ain't gonna happen! I hate to say it, but the HUGE union pensions for government employees, and the COSTLY progressive entitlements will keep them in the red or until they can shake these gorillas off their backs through bankruptcy court.

Agriculture is doing well so expect to see capital investment made in this industry. I believe that there is great potential for manufacturing. I see a lot of us getting fed up with China and its inferior products, for example 'drywall.' If you're like me, I would rather spend a little more but get the great quality and reliability from a product that says: "MADE IN AMERICA." To hell with the Chinese and their crap.

In the petroleum industry drilling is as dead, just like Obama intended. Watch the natural gas industry because Pickens was right. At this present moment big petroleum is looking to buy out the ng producers. What do they know? Well, oil is getting expensive and we have plenty of natural gas and Americans won't like paying $7 or more per gallon for diesel or gasoline. If they bring it on-line they will have to spend billions redoing their infrastructure

The good news is that the country will not come to a screeching halt. Life will go on. The affluent are still spending and people are finding a way to address their needs. You will see sales but few of them. At least nothing like five years ago. Those that will survive and thrive will have to educate themselves on managing their business far more efficiently than they do today. They will have to produce lean production costs, controlling overhead costs and producing effective and targeted marketing.

In short order, if you do not have a plan and strategy coupled with an adapted business mindset and focused marketing to capture your fair share of the limited sales opportunities that will present themselves within your marketplace. You are screwed. We are in this for the long-haul.

If anything, I hope this insight will help many of you. Maybe even rattle of few cages, so to speak. The doom and gloom will be a reality for those who do nothing to improve their businesses. Success will come from adapting, improving, change and something called evolution-flexibility.

Will you evolve or become extinct?

If you would like to discover how to evolve and adapt, I will be addressing this at my yearly SUPER Business-Building Conference in Orlando this March 21, 22, 23, 2011. So, be careful; if you do nothing or decide to do something for yourself and your business, it will profoundly determine your future.

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