I don't have a magic crystal ball to tell what’s going to happen when this recession, now being commonly called the "Great Recession", ends. Of course, on many levels there will be improvements in business, employment, and the economy in general. But reflecting on past recessions I've had the misfortune of living through, and from what I've seen in this recession, got me to thinking about what life will look like after the dust has settled. Maybe from this, we can craft a strategic plan to improve our financial situations in the near future and be prepared for better times and then the next recession (yes, it will come again).
Recently several visitors to this site have lamented that even as the economy shows the beginning of an economic recovery that jobs are not following suit with any sort of a recovery, and in fact may be sliding backwards. This is an unfortunate ramification of a slow business environment and hesitant business owners, who are reluctant to invest in human capital. So, here are five of my thoughts on the post recession and our profession.
5 Post Recession Professional Land Surveyor Thoughts:
- Credit will remain difficult (and expensive) to obtain. Unlike the happy, heady, heyday of boom years past, more and more people will also shun credit in favor of a more pay as you go approach. This is not a bad thing at all. Let’s get back to some “old-fashioned thinking”, borrowing the least amount necessary only, I said ONLY, if there is a genuine need and high probability of being able to pay back the principle and interest while retaining a good profit, too. If you do need to borrow money, say for a new piece of surveying equipment or surveying software, make sure that what you are purchasing brings more for you in return in the form of sales and PROFIT to more than cover the expense of the purchase and financing, together. Don’t make up numbers to suit your needs. Use good data, a business plan, and follow through – Or don’t do it at all!
- To make sales, surveying equipment and software suppliers will be well served by including the financing into their prices, as a package, essentially making the loans themselves. I can’t imagine the lost revenue and sales surveying equipment and software suppliers suffer by farming out the financing. If they believe in their product and service their clients (we surveyors), I think there is no better business strategy for them than to invest in surveyors and themselves. Besides, this strategy may allow them to leverage this strategy and have lower prices with increased sales.
- Those professional land surveying companies (and engineering companies) that continue to provide credit and financing to their clients will suffer from mass delinquencies and poor to non-existing cash flow resulting in anemic profits (if any), which often lead to poor professional decisions. This death spiral will continue to drag down our profession. This may seem at odds with the last paragraph suggesting manufacturers should take on loans. The difference is that manufacturers and suppliers are more savvy and have more resources to extend credit, they are smart enough to do credit checks, and they often use secured credit (or close to it) whereas surveyors generally extend unsecured and crazy credit. We are often just asking to be taken advantage of and then surprised when it happens. If you want a different outcome, try a different approach!
- Business will improve, profits will be small for those who refuse to innovate and make serious hard decisions regarding their processes, procedures and business practices. While those of you that took the hard look at yourself in the mirror and made smart innovative improvements to your surveying procedures, surveying equipment, and surveying software will see better profit margins than most. Become smarter than the average bear!
- Lastly and sadly, many jobs may never come back. Many of the more "manual", or not knowledge based jobs, in our professional industry have or will soon become extinct. If you are you a "drafter", and by this I mean hand drafter/connect- the-dots CAD operator (there's no difference, really), then you most likely will not have a job waiting for you when the economy recovers. If you're a professional land surveyor or engineer who can only "markup" a plan for someone else to draw - Things look bleak for you. "Instrument Operator" - You will be gone, too. For no fair reason at all, besides economic realities and ever changing surveying paradigms, many good surveyors – field and office – will not have a job waiting for them and may never work in this industry in the way they are used to, if at all. Administrators and many back-office personnel with jobs providing zero project productivity - you're also a goner. So instead of being a "drafter" learn to use more design oriented CAD packages, like AutoCAD Civil 3D (one example), becoming a "designer" so that you will be productive, useful and employed. This is the same for those professional land surveyors and engineers that cannot design/draw using these very same software packages (tools).
So, I suppose this all seems bleak and rather discouraging, particularly if you’re currently an unemployed (or under-employed) professional land surveyor or surveying technician. Well, on that personal level it is no doubt bleak and discouraging. And for businesses, there are still difficult times ahead. But, if you can look beyond the personal struggle and see the bigger picture, you will realize that recessions are about adjustments, corrections and, ultimately, about opportunities.
In a future post I will write about how recession can have an upside – at least once you’ve survived it and the skies become sunny, again.