It’s hard to find a silver lining during recessions. They can bring decreased economic output, high unemployment, and low consumer spending. For tradespeople, a recession can make it hard to secure materials, and even harder to secure jobs.
But the best thing you can do is future-proof your business now and get things in order before the going gets too tough. If you’re on to it, you should be able to secure work as an electrician, no matter the state of the economy — and even grow your business.
Growing your business is a lot easier when you have a solid business plan in place. Use our free Electrical Business Plan Template to get on track to better growth this year!
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1. How might a recession impact the electrical industry?
Some industries will be hit harder by a recession than others — retail, tourism, and real estate are likely to suffer. But more essential services, like healthcare and the trades, will keep seeing customers coming.
That said, operating your electrical business during a recession won’t be business as usual — and there are a few things to consider:
- Fewer jobs - People cut back where they can during a recession. That means they’ll defer any non-urgent work and make do — meaning less work for electricians.
- Less cash flow - When there’s less cash circulating, it’ll impact both you and your clients. It means clients may be inclined to miss payments or not be able to pay at all. Reduce this risk with Tradify's Automatic Payment Reminders.
- Honouring loyalties - Having positive relationships with your clients could save you during a recession. When things are tight, people are much more likely to spend their money on businesses they already know and trust.
2. How to safeguard against recession now
Some things are out of your hands during a recession — like how other people spend their money. But if you’re smart, a recession might be a great opportunity for growth. Here’s how to plan for that now:
Although your services are more important than many, nothing is guaranteed during a downturn. People may delay non-urgent matters, which means a limited cash flow for your business. While the going’s still good now, invest your money wisely and manage your cash flow.
Be strict with spending and only invest in things that will help grow your customer base and increase profit. Review where you’re spending and what you could cut, or change suppliers if it saves a few pennies. Check if you can ditch the multiple subscriptions you’re running and streamline them with Tradify instead.
The best place to start is to get your cash flow in check with our free Cash Flow Forecast Template.
Streamline business processes
The last thing you want to deal with is an admin overload, wasting valuable time filing or chasing paperwork when you could be chasing new jobs. Tradify can streamline business processes so that if a recession does strike, managing messy admin is one less thing you have to worry about. Plus, with more time to focus on growing your business and generating more income, you’ll have a more robust financial backing to rely on in a recession.
Make good habits now
The survival of your electrical business depends on how pragmatic and organised you are now. If recession strikes, and you’ve never quite got on top of your business processes, like sending prompt invoices or accepting job bookings, the wheels of your business could quickly fall off. But, as the old saying goes, the best time to plant a tree was 20 years ago, and the second best time is today — so don’t delay getting the bones of your business plan in order now. It could be what saves you down the line.
Tweak your marketing
Boosting your marketing efforts now might be the most valuable tool in your recession-proofing toolbox. During a recession, it’ll be harder to get new clients over the line and win more work, which is why you need to do that now. Check out social media ideas for electricians to get you off on the right foot and add those ideas to your marketing plan:
Check you're tracking business expenses
When was the last time you claimed your business expenses? If it’s been a while, you could be a few pennies short — which isn’t the best way to head into a recession. Your federal government or state might also offer support in a recession, and there’s no shame in accepting the help — it could be what you need to keep afloat until the dust of a recession settles.
Learn more about business expenses in your country:
Upskill and pivot
It’s no question that people cut down to the basics and look for cheaper alternatives to get by during a recession. That, paired with a global drive to become more environmentally conscious, means that being skilled in solar and electric vehicle charger installation could be a saving grace for your business. Without those skills, you could lose potential business all year round — not just during a recession.
Optimism might be the last thing you feel like in the midst of a recession, but it could be what saves you. If you can rise above the tough times — and be optimistic about riding through the waves — you’ll come out the other side better equipped and maybe even with a few extra clients than before the recession.
It may feel like doom and gloom, but it needn’t be. Although they can be challenging, recessions can also bring great opportunities. Putting in the groundwork now — whether that’s investing in the right resources, upping your marketing efforts, or streamlining business with Tradify — is the best way to future-proof your business against anything thrown your way, including a recession.
Try Tradify for free, or pop over to one of our live demo webinars to see it in action.
Please note: this article is a general overview of how electricians may be impacted by a recession. We strongly recommend speaking to an accountant or financial advisor about your individual financial situation.