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15.09.2014 How to survive contractor companies on concrete cutting-drilling market of Ukraine today!
How can contractor companies survive on concrete cutting-drilling market of Ukraine today?
The situation in our country is very difficult. The construction market froze in anticipation. Many projects are stopped due to lack of funding. No one today can predict the depth of the fall and name a date of stabilization on construction market. The additional factor that has a negative impact on the construction market is a high exchange rate of foreign currencies.
But life goes on. There are two groups now among our clients which operate on the market of concrete diamond cutting-drilling and concrete floor grinding-polishing.
First group is those companies which bought equipment in credit at fantastic prices because they yielded to marketing ploys. Now they have a huge number of problems. They are at a loss and confusion. Debt is not reducing and technique often fails. The repair is becoming more expensive but the price on cutting and drilling is not growing now. The situation for that kind of companies is difficult but not hopeless.
Another group - people cautious who prefer first to count well the costs, check all marketing theses suppliers made. They choose on the most viable business model and fill confident enough today. Despite the weak market some of them even bought new equipment and increased amount of staff this year. Why? All because, at low cost and the absence of credits is quite possible to stay afloat in the market and run a business, even the prices for cutting/drilling work are low.
What to do? Having 20 years experience on the market of concrete cutting and drilling of Ukraine we allow ourselves to make a few advices for contractors:
1. Stopped all the non-core activities (those are not included to standard service offer-list of the company): segments sale and soldering, equipment sale, civil services etc. Minimal staff should do only core business.
2. Reduce unproductive staff, leave only cutting operators. If it is needed do administrative\foreman work by yourself.
3. Recalculate the cost of drilling of 1 cm; 1sq.km of wire cutting or cutting with disc. Carefully calculate the annual cost of the equipment service. To do that make a simple table that defines the basic costs; predictive margins; calculates plan profit for the year.
4. Then it will become clear at which point you can save money.
Do not fail to promote your services with all possible methods! Market does not forgive the neglect of business promotion.
5. Carefully analyze the cooperation with your key suppliers which supply equipment and tools. You may need to abandon some suppliers who cannot help with the calculations when selling equipment and tools but their main goal is to sell it at any price.
Our company will gladly help you in calculations, if needed!