The recent downturn in the economy has had an enormous impact on businesses of all sizes. Major corporations are laying off employees by the hundreds in an effort to stay afloat. Businesses of all sizes are cutting costs to the bare bones to survive and many of them are closing their doors. The trickledown effect, affects everyone, both individual and the business owner.
When someone loses his or her job, if a pay cut has had to be taken, or if a usually relied upon bonus is not forthcoming this year, expenses must be cut. So many people right now are experiencing drops in income so severe that not only can they not afford “extras” anymore, but also sometimes even basics are hard to come by. For example, a homeowner may have planned to do some home improvements, to paint the interior of the home, do some tree removal or planting, or add a new deck. These things are all valuable to homeowners, of course, and they add value to the home as well, but now they must be put on hold.
What that means is that contractors, too, are being affected by the financial crisis in our country. Normally, contractors depend on the type of business as discussed above and that, while in demand during flush times in the economy, experience a dry up in business and income flow, as these types of extras are no longer afforded. When people are short on cash, they are going to pay the basics first — food, mortgage, etc. They are going to wait on putting in a deck, to have the roof repaired, or to have the interior of their house painted unless damage is such that repairs cannot be put off.
What that means is that these types of contractors are often the first to feel a tightening economy’s impact, no matter what caused it to do so. And of course, contractors can continue trying to find business as they normally would, such as through networking, advertising, and so on. However, they will likely find that while they might have had an immediate response at first, now they only have silence. Customers become ever harder to drum up.
Even those people who are still doing okay and are solvent in this financial crisis are cutting back. It is natural in a time of widespread hardship. Even people more solvent financially are either consciously or unconsciously making preparations for the time when they may not have the resources or options, they have now. Because they want to be “safe,” they save their money instead of spending it.
More and more, this is happening in our country. Spending is down everywhere, in every sector. Even necessities like food, household needs and clothing are down, but what is most apparent is that so-called discretionary spending is significantly down, and this includes contracting jobs like putting in additions for homes, painting a house, and so on. At least for the time being, these jobs are in short supply indeed.
As the number of customers who are looking for contractors decreases, competition between contractors for each available customer becomes more intense. Where once a contractor could get his asking price, he now must lower it to even get in the ballpark with the other contractors.
In addition, if consumers are feeling financially pinched, as they are, they are much more selective and much more cautious about the contractors they use. Instead of getting one or two bids on a project, they now get three and four. Comparison-shopping is all the rage as consumers seek to find the best deal.
All of these things make it very difficult for contractors to find work. It can be so frustrating, because they seem to be thwarted from every direction. And as income drops for contractors, advertising costs, too, must go down; this, in turn, only complicates things further. Indeed, contractors are among the hardest hit in the job market during these most difficult economic times.
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