The Global Downturn is very real and has various repercussions for different businesses and industries.  There are many things we, (in the building industry) can do to mitigate risks and capitalise on opportunities which come up during these topsy turvy times.  Please find some areas to focus on in the coming year.

Harry Pontikis – Director

Financial Services

Master Builders Association

STRATEGY:

1.             Focus on new opportunities which exist in times of uncertainty.

2.             Keep an eye out for ‘deals of the century’ – e.g. Forced property sales, deceased estates or semi completed projects in distress.

3.             Look for properties needing quick settlements – if you have your funding organised, you can negotiate harder on the price.

4.             Focus on the profitability of your business and business activities.

5.             Manage costs conservatively – even if you are busy, tighten your belt!

CUSTOMERS:

1.             Know who is a ‘preferred customer’ and why they are preferred. 

2.             Reward and recognise your current ‘preferred customers with cards, gifts or thoughtful actions.

3.             Seek to understand your ‘preferred customers’ by asking them about areas you could improve in your business.

4.             Get expert advice on attracting, caring and growing your clients.  (Master Builders Business Advice service)

5.             Ensure you and your staff are focussed on servicing your preferred clients.

FINANCE:

1.             Plan your finance & lending needs for the next 2 years with your Accountant and Lending Consultant.  I.e. if you need to borrow in the near future, have your tax returns in order and consider showing more income in your tax returns.  If you do not need to borrow, ensure your current lending structure will serve your needs for the next few years and continue to minimise your taxable income.

2.             Only deal with finance experts in YOUR industry.  Deal with Accountants who specialise in the Building Industry and with Master Builder Financial Services. www.mbav.com.au  Do not deal with home loan brokers or with the banks directly as there may only be 1 solution in the current environment.  Do not take unnecessary risks with inexperienced people or with banks – focussed on their margins.

3.             Insist on paying a Fee when asking experts to deal with your business’ finances - Applies equally to your Accountant and Lending Broker.  This ensures they focus on your needs rather than making their commissions by selling you products or asking you to change banks. 

Credit Risks:

1.             Choose your customers well. This crisis affects everyone so do some diligence on your clients before undertaking any work for them.  E.g. ask for a copy of their loan approval, ask for a copy of their Credit Report www.mycreditfile.com.au .

2.              ‘Losing’ clients who do not pay are not really clients.  Use a debt collector for well overdue clients or those who avoid you.

Cash flow:

1. Do not be used as an interest free bank by your clients.  Tighten your collection policies – reduce payment to 7 or 14 days.

This entry was posted on Tuesday, June 2nd, 2009 at 3:52 pm and is filed under Monthly Loan Specials . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.