Working Together to Get Through Tough Times

We’ve all heard the old saying: “Hang together or we will all hang separately.” What the kitchen and bath industry has gone through since last fall certainly has driven this concept home. Even for those remodelers who were prepared to deal with the inevitable, cyclical recession, the severity and length of what we have experienced has likely taxed, or even exhausted, those preparations.

With spring turning to summer, it seems we are starting to see the first signs of stabilization, and even hope for the start of a recovery. If you’re still in business as you read this, then your preparation for and actions during the past eight or nine months have served you well. At the same time, most of our businesses have been severely weakened during this period, as cash flow dried up faster than overhead and payroll expenses could be cut. It’s likely you have seen many competitors fall by the wayside, as lines of credit were reduced or withdrawn and cash requirements overwhelmed the ability to meet them.

My last few columns have discussed some steps to take to determine where you stand and ways to evaluate the impact of various strategies for survival. As this downturn drags on, survival is truly the objective, as the companies that do will have much less competition than there was a year ago. Granted, the market will be smaller, but there is a great deal of remodeling that has been deferred over the past 12 months, which is likely to move forward once consumer confidence returns.

So, let’s assume you’ve taken all of the steps to try to match your costs to revenue and still find your business unable to meet all of its obligations. What can you do?


The assumption here is that you have cut all of the “fat” from the organization and are down to the core group of people, those who are absolutely necessary for you to continue as an ongoing business once the economy turns around. It’s important for this group to know there will be no more terminations and, if reductions in pay or hours are necessary, this will be done equitably and transparently. In return, you should expect a commitment on their part to stick with the business until things do turn around.

If you utilize subcontractors, meet with them and confirm your firm’s loyalty to them and ask them, in return, to make sure they are doing everything they can to hold their costs down. They should have gone through the same exercises you have to make sure they are operating as efficiently as possible.

Let me stop to reiterate something discussed last time: While a market such as we have been experiencing makes it extremely difficult to increase margins, do not fall into the trap of competing on price, and don’t ask your subs to either. As previously mentioned, simply lowering your price by 10% will force you (or your sub) to increase revenue by 33% just to achieve the same level of gross profit to cover overhead costs. On the other hand, if you can lower your costs by being more productive and efficient, you can price more competitively.

The objective here is to work together with both your employees and your subcontractors to be able to stay in business until things improve. You have developed relationships with these subs and stuck with them because they have provided your company with the quality of work and service that have allowed you to succeed in the past. It’s important that you and your company make every effort to make sure they are around for you in the future.


It may seem unlikely that vendors and suppliers will be anxious to help, particularly if you are behind in payments to them. You will likely find, however, that many – if not most – of them are going through very similar circumstances, and dealing with collection problems with nearly every customer who has anything to do with the construction business.

When times get tough, it’s not unusual to feel overwhelmed by problems that seem to be coming from every direction. It is too easy to become paralyzed by this and simply give up. The first thing you need to do is develop a plan to allow your business to survive, repay your creditors and restore your employees’ income. We have already discussed communication with your employees and subcontractors, but maintaining open communication with your suppliers is critical.

Remember, your suppliers need customers and therefore need to help you fight through this, repay them and buy from them in the future. It is likely they have had many accounts go bad already and many, if not most, of their remaining accounts are in trouble. If you communicate with your suppliers, make them aware of your plans for dealing with the current situation and offer a reasonable plan for getting them repaid, they will likely go along with it.

Someone with a plan is probably a welcome relief from the majority that have just thrown in the towel and given up.


Most of us can remember a situation when we found out someone really could have used our help but didn’t ask for it. We likely responded by saying: “I wish you had just said something, I could have helped.” I believe we all would be a little surprised by the willingness of our former clients to help us with referrals, if we just have the humility to ask for help. A call or note letting them know you could use their help could pay big dividends.

The bottom line is that the way to get through hard times never really changes. It’s really a matter of everyone involved working together and helping however they can. Most of all, don’t give in and don’t give up!

On the brighter side, perhaps by the time you’re reading this, the economy will have turned and you can tuck this column away for the next time the economy tanks.