More "House Bubble" Construction Reports
Friday, September 08, 2006
Some housing bubble reports from Wall Street. "The housing market is looking sicker by the day. Economist Ian Shepherdson said that the housing market is so far gone that 'it's not rescuable anymore. The housing market is beyond the control of the Fed.' He compared it to a football game played on a mountaintop. Once the football goes off the edge, he said, it doesn't stop until it reaches the very bottom.""Even the homebuilders, long an optimistic bunch, are all but throwing in the towel on the current market’s condition. 'We're running our business today as if we're in a prolonged downturn,' CEO Ara Hovnanian of Hovnanian Enterprises told analysts."
The Union Tribune. "Each of the six economic indicators, residential building permits, unemployment filings, local stock prices, consumer confidence, help-wanted ads and national economic growth, has been in negative territory at least three of the four months from April through July. 'What's been frightening over the past four months is how negative all of the indicators have turned, reflecting general weakness in the economy as a whole,' Alan Gin said. 'In April and May, all six categories were negative.'"
Contractors with AOL Accounts
This is a message to all of our contractors who have registered or subscribed with us, using an America Online account. We've had ongoing battles with AOL to get our emails through their spam filters. They've got some of the toughest around. Since we regularly send you updates about all the jobs available via email... we want to make sure you're not being left out. My suggestion would be to add a new email account, from one of the free services, so that you can continue to receive project updates. Here are a few suggestions of some free email services, but there are several out there (Google's gmail is an option, but for some reason you still need to have a friend recommend you... not sure why.) Check them out:
MSN's HotMail
Yahoo! Mail
9 Ways to Improve Small Business Cash Flow
To stay in business, companies large and small need to maintain proper cash flow. A lack of operating capital is one of the main reasons that businesses fail. Here are some suggestions on how to make sure your building, remodeling or repair business has enough cash on hand:1. Bill Promptly - It's easy to think about moving on to the next job, but it's important to send homeowners a detailed bill with obvious payment dates. Also, send a reminder about two weeks before the official due date.
2. Stick to Budgets - Know what you're going to spend for new equipment, equipment maintenance, and on company supplies and stick to it. It can hurt your cash flow and cut into your profit margin.
3. Offer Early Payment Incentives - You'll be surprised at how offering a 1% to 2% discount for early payments will make your clients mail out their checks in a hurry.
4. Pay by Credit Card when Possible - Do this only if you're receiving 0% credit card offers for an initial period. It's a great way to keep cash handy and you can transfer the balance to another card once the initial time period is up.
5. Schedule Payments - Pay suppliers as late possible, avoid late fees, and plan out a payment schedule so that you're not paying everyone all at once. Spread out regular payments and try to arrange alternate payment dates to work with your schedule.
6. Avoid Slow or Non- Paying Customers - In your qualifying phase, make sure the homeowners have payment options in place. If they have trouble even coming up with the initial deposit, you might have to pull away from the job. Think of the man hours you'll spend trying to collect on the job during and after.
7. Barter Instead of Cash - See if you can find a barter arrangement for services. You might provide plumbing work in exchange for a website design - talk with your potential clients to find out if they provide a service you need.
8. Don't Spend it When You Get It - Avoid the urge to spend a portion of any payments you receive. Try to find an accountant or money manager who can watch over your transactions (possible barter?) And when you've got cash, don't stick it under the mattress. Place it in an interest-earning account and let it earn money for you.
9. Maintain Timely Collection Practices - Collections are not fun, but plan for some collection activity time during every week. You don't need to be mean and nasty, but you need to provide constant reminders for payment to make sure it doesn't get out of hand.
Be sure to Bookmark our Contractor Update page and return to it often for new new posts, new information, and additional ways to help expand your business and make you more profitable.
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