Tuesday, March 16, 2021

Is Off-Site Construction Prepared for Newton’s Next “Opposite Reaction” Downturn?

What a lot of people in the residential and commercial off-site construction industries forget is Newton’s Third Law of Motion that states that for every action there is an equal and opposite reaction.

We’re currently on the “high demand” positive side of his third law and have been for longer than many thought possible. When the “low demand” negative side rears its head, will you and your company be prepared for it or do you just keep putting things off hoping for just one more good year?

Here are some areas of your business you may be overlooking today that could prove devastating when Newton’s opposite reaction (recession) begins.

Outdated Branding

Your company is not the same as it was just 10 years ago. We were coming out of a recession and working hard to keep our brand fresh and relevant. When off-site began to take a turn for the better, most factories began gearing up for more sales and planning how to meet customer demands.

What was left behind was the original definition of who, what and why your company was in the beginning. You stopped taking into account how you had evolved, what you stood for, who you were serving and how you were different. You became profit-oriented, thinking our industry was smart enough to avoid making the mistakes of the past.

You’re spending all your time servicing your builders' and developers' needs and have ignored your own branding and positioning. You’re becoming a commodity factory and your brand is becoming invisible.

Lost Your Niche

Even though you were great in the beginning at building a strategy, branding, and sales, you’re looked at as simply a commodity today, a generalist manufacturing factory that no longer has a stronghold on any market niche. Unfortunately, those niche markets may be the savior for many off-site factories when Newton shows up again.

Stopped Marketing

Things are “fine” and you’re very busy today. Referrals and repeat business are great but not predictable or dependable. It doesn’t really matter though, because you are taking orders 8 months to a year in advance.  

Without marketing, potential builders and developers will probably not know you’re out there after the recession starts because letting them know who you were and what you do did is outweighed by that huge backlog of business that could disappear overnight if the economy tanks. And if Newton has anything to say about it, it will.

No Prospectors in Your Company

Remember the days just after 2008 when sales reps were told to find anyone with a “problem to solve, a pulse and checkbook?” Do we even have sales reps that know how to cold call today?

You don’t want to wait until the recession is coming over the horizon to restart your prospecting program. You need to make prospecting a priority today while things are good. Have it in place and operational while your competitors are still asleep at the wheel. There are going to be factories closing their doors forever when the next downturn starts. Don’t be one of them.

Start prospecting in those niche markets that may be the only steady supply of work in a recession. 

Don’t Ignore Those Red Flags

Set boundaries for what you were willing to put up with and what you would not tolerate. There are builders and developers you are meant to serve, and others, not so much. Know the difference or it will kill your culture!

A major Red Flag that shows up during both sides of Newton’s law are the builders and developers that are bad fits. If you don’t have a qualification system in place to weed out the bad ones, they may end up running roughshod over your team sending a clear message that you care more about the bad client than you care about your team.

Jumping in Late

Over the past few years, demand has far outpaced factory capacity. That has led to a lot of new and simply amazing off-site and modular factories being built. 

Just because your factory is new and extremely busy today isn’t a strategy for success when the next downturn arrives. Millions of dollars have been invested in those new factories and in order for many of them to survive the downturn, they will either have to cut expenses to the bone or better yet, begin preparing today for Sir Isaac Newton’s return.


Gary Fleisher, the Modcoach, writes Modcoach News, Modular Home Coach and Off-Site Construction News blogs. 

Modcoach Connects matches Consultants with Clients. 


Contact me at modcoach@gmail.com

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