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Looking at it from a purely operations management and economics standpoint, we know demand is generally a linear
function, with demand falling off as rates increase. With low rates, there will be more work, but there may not be enough
profit to cover fixed and variable costs. Quoting rates that are either too low or too high will result in reduced profit.

During an economic downturn, there is an industry-wide reduction in demand. It may be beneficial for your operations
manager to revisit your quoting strategy periodically to make adjustments that will maximize profit.
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Finding Growth Opportunities
While an economic downturn results in a reduction in work, there is still work out there to be found. One of the best

things that you can do is to focus on marketing your company. Today, there are so many different ways to find new
customers. Perhaps it is time to give your website a facelift. Are you actively promoting your company on social
media? Do you take advantage of networking opportunities with the various industry associations you belong to? Have
you considered participating in low-cost regional shows, such as the Design-2-Part show? Have you sent any press
releases to industry trade magazines? Do you have your salespeople making calls and knocking on doors? If some of

your competitors have tried to compensate for reduced work volume with significant rate increases, you may find many

customers would like to talk with you. Don’t hide from them. Be proactive and make sure they hear your message.

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Look to Your Employees for Help
Perhaps the single biggest thing you can do is involve your employees in developing a strategy not only to survive but
also to emerge stronger when work picks back up. It is unfortunate, but without communicating with the employees,
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you may see the time it takes to do a job climb as things start to slow down. It is not uncommon for some people who
are worried about being laid off to stretch the work out a bit. What does this accomplish? It increases variable costs
and makes it more difficult to quote competitively. When this happens, many companies will come down hard on the

employees, resulting in animosity on both sides. There is a better way.
As work begins to slow, meet with the employees. If you consider your company as a team, now is the time to

show it. Explain the situation and ask for their suggestions on cost-cutting and ways to be more efficient. Help them
understand that if the entire company rolls up its sleeves and works to be more efficient, it will lower the variable

costs and allow you to be more competitive, capturing work from your competitor who chooses instead to come
down with an iron fist.

Combining the various strategies for financial management, marketing, and employee buy-in, you may find that you

have a winning strategy to not only survive the downturn but come out on top.
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