ForConstructionPros.com

No matter where you are, you hear things like:

"It is getting better out there."

"Business is picking up for the summer."

"Banks will start lending soon."

"It's not over and we have not hit bottom yet."

"Expect a reversal in the third quarter 2009."

I'm sure you can add a few comments of your own. We've heard them all, and they are all over the place. Chances are some will pan out, but most will not. (If you believe the one about the banks lending soon, I have some swamp land you can buy.)

Where you fit in the construction industry will decide your overall outcome from this recession. For example, a review of stimulus projects by state shows a majority of the funds going to road, bridge and water-related infrastructure projects, so I guess those of you working in those areas may see a recovery in '09. For the rest of you, it still looks to be slow for a while.

Admit that you need help
Last month, we covered ways to improve and keep your profit margins. We discussed ways to manage pricing, margins and overhead to keep your head above water, and provided a method to make overhead reductions that made sense and were fair to your entire staff - all steps to keep you in a positive cash flow.

So what happens now after you have made every adjustment you can think of, yet still find yourself in "the glass is half empty" crowd? You made all the right moves and expense cuts, and were aggressive with the bidding process, yet still don't believe you will make it out of this situation in one piece. If you find yourself in this situation, it is time to take a realistic view of your financial scorecard with a goal of minimizing any forthcoming financial disaster.

If cash flow is nonexistent or negative, you have stretched out vendors as far as you can and you find your jobs being liened for collection, you need to address the issue before someone else does it for you. This means trying to negotiate with your banks and major vendors to work out a program before the "work out" guys come in. Once they enter the picture, it is almost impossible to produce a solution that will come out in your best interest.