Mechanical Contractors: How to Survive and Thrive in a Recession
The word recession is thrown around a lot in the news and at the water-cooler at work in recent years. It seems like everyone keeps strapping in for a crash but it ever looms out on the horizon as this big boat of an economy keeps breaking against the waves of tragedy on the Homefront and in the greater world. So how does an industrial and commercial mechanical contractor not just survive a recession but thrive in one?
Step one: Be an expert. This should be a no-brainer but alas it serves well to get into the weeds a little to drive the point home. What I meant by simply stating, “be an expert”, is you need to have an engineering background along with a few gray hairs of experience to be able to help your clients navigate tough budget years. You may be able to prove a three-year payback or an insanely good life cycle cost analysis of why the client should replace a large water-cooled chiller or boiler, but if the project is half a million and the repair is $75,000, but will carry them another 2-years with some proper maintenance, educate them, give your recommendation, and let them settle on what is best for their business at that particular moment. You have no clue what is on their balance sheet or how their quarterly financials look, so just educate and whatever they decide to make it the smoothest it possibly can be.
Step two: flexible maintenance. During the 2008 recession the first call I got from a lot of my clients was they asked to stop maintenance on their equipment to save some cash. This was a catastrophic decision because a lot of the equipment could quickly run to failure in 24-hour operations. What we did was move from quarterly maintenance to just annual maintenance and get their maintenance staff to put their eyes on the equipment once a quarter. Once the client bounced back, we resumed quarterly service and they hummed along with no real issues.
Step three: Long-range planning. Clients usually have no clue how their HVAC system works. They usually just know that it makes cold or hot water or air. This means they have little idea if it's being maintained correctly or if any of it needs some major service (bearing inspection, PIC panel upgrade, etc.) or approaching the end of its useful life. By sitting down with your client and coming up with a 5 to 10-year plan, you can help them with a budget and give them peace of mind as they ride out a possible recession.
To conclude, if things get hairy in the coming years, be ready to think quickly on your feet and use sound logic instead of fear or emotion to drive how you handle whatever is in front of you.