As the new presidential administration implements its economic recovery program, no one knows how your electrical contracting business will be affected. It’s like waiting in line at the amusement park, with one big exception. At the park, you choose the rides you enjoy the most. In the economic environment, you don’t know what ride you will be on until you get to the head of the line, and it may be a ride that scares or bores you. Which ride you prefer has a direct relationship to your degree of risk tolerance and the business decisions you make. Do you want to stay with the rides you enjoy or try something new?
The roller coaster
Roller-coaster fans are risk takers. They enjoy the slow, steady climb and the fast drop on the other side, looking forward to another climb or a series of fast curves. They scream while their stomachs drop with each downward plunge, but they get right back in line. The terror is part of the fun.
If you enjoy roller coasters, then you find stimulation in the unpredictability of contracting and the adventure of bigger jobs, new clients or constructability challenges. The whiter your knuckles as you wait for that big check, the more you appreciate receiving it. Risking the company and acting outside of your comfort zone is part of the fun.
You have the advantage of enjoying the ride, no matter how risky or crazy the changes in speed and direction. The disadvantage is you have the tendency to bet the farm, scaring the daylights out of your employees.
It goes around and around and never seems to make progress, but the path of the carousel is predictable, the music is cheerful, and the rise and fall of the colorful horses is soothing. The rider is not forced to reach for the brass ring unless the value of the prize justifies the risk of a minor fall. If dizziness occurs, it’s possible to step off and rest before resuming the ride.
If you are a merry-go-round rider, you appreciate predictable cycles in electrical contracting. You work to solidify your relationships with customers and employees, and you seek to repeat familiar work. You may choose to reach beyond your comfort zone if the risk is reasonable and the reward appropriately attractive. Knowing what to expect is more important than excitement or adventure. When you feel overwhelmed, you back off and take a break to refresh yourself.
The advantage to your business is a carefully planned strategy and a moderate approach to financial decisions. The disadvantage is the tendency to miss opportunities or become complacent.
The crank car
The crank-car rider is a plodder, not a high flyer. The car is self-propelled, and the rider uses just the arms, while the legs stretch out idly on either side of the center crank. It takes a lot of cranking to get the car moving, and the speed is slow and steady on a defined track. Except for the occasional push from behind by a more aggressive car, it is easily one of the safest and most peaceful rides in the park, while not the most exciting.
If you are a crank-car aficionado, you appreciate security, and you don’t mind working hard for a modest return on your investment, as long as the risk is low. You are careful about the projects you accept, deliberate in your pricing and estimating, and conservative in managing your cash.
The advantage of being a crank-car rider is your ability to reduce risk and ride steadily through tough economic times. The disadvantage is the frustration you may cause in your staff, when you resist adjusting to changing market conditions.
The bumper-car aficionado is aggressively competitive, risking whiplash and minor injury to get the best of the other drivers. The cars have no brakes, and the fun lies in a continuing balance between attacking and defending, staying alert and ready for challenges coming from all directions. There is no cycle in this ride, just chaos and change.
If you are a bumper-car fan, you like the scramble of competitive bidding and the fight for market share. You find change and unpredictability stimulating, and you dig in and become more aggressive in tough times. You have no fear.
The advantage of this approach is that you will probably always have work and successfully defend your share of the market against all competitors. The disadvantage is the possibility that you will sacrifice profit for volume and take jobs you should avoid.
Choosing your favorite ride is easy, compared to making decisions for your business, but the choices are driven by similar aspects of your personality—your tolerance for risk and your ability to adapt to changing economic conditions. Be aware of the patterns in your thinking, and experiment with some new choices. Most importantly, remember why you came to the park, and enjoy the ride.