Are you prepared for a recession?

[Robert86]

Was just talking to someone this morning about this. They have several friends in the trucking industry that got laid off recently do to slow downs. That's a pretty good early warning sign of a coming recession.

I'm personally not too worried. The growth I've seen in my business in the last couple years I believe has less to do with economic highs and more to do with changes and decisions I've made in my company. I'm also getting in good with some rental agencies. I've managed to keep my operating costs low so I can offer them and their tenants lower rates than a lot of the other companies which means I can keep a good amount of work flowing in from those. And being a college town, there is a lot of rentals with high turn around as students come and go. And when the economy gets bad, college enrollment goes up, so rentals needing cleaning will stay steady.

So things will likely get tight, but I feel I can weather the storm.

 

[ACP]

I think if your running 1-3 trucks it's nothing to worry about, if your running 10 with big loans then probably will have decisions to make.

Carpet cleaning is pretty recession proof, like said above.. people will clean rather than be so quick to replace.

Homes also are still being sold whether people are upsizing or downsizing.

 

[Jim Davisson]

The last recession we seen an immediate sharp decline in residential for a long while, the large hospitals, malls and commercial buildings we cleaned went back to in house cleaning again or to the lowest bidder and property management wanted everything possible patched, dyed, stretched, saved etc... as they scaled back on below the line expenses.

The times of full days of residential and gravy commercial at night changed for us, residential turned into smaller ticket jobs, commercial prices got so low it was ridiculous and we passed on most, but realtor and property management tickets went way up with less stops per day. The super rich and water damage tickets stayed the same. It was a long slow process for the pendulum to swing to where it was before October of 08 where everyone had money to burn. We had to increase prices for gas when it went to $4.50/gal here, but everyone understood that. It never was scary for us, the game just changed a bit and not having all our eggs in one basket made it easier to adjust. Some residential only cleaners flat out died here, just like home builders and large commercial construction firms. Diversity was our saving grace.

 

[Todd the Cleaner]

The last recession we seen an immediate sharp decline in residential for a long while, the large hospitals, malls and commercial buildings we cleaned went back to in house cleaning again or to the lowest bidder and property management wanted everything possible patched, dyed, stretched, saved etc... as they scaled back on below the line expenses.

The times of full days of residential and gravy commercial at night changed for us, residential turned into smaller ticket jobs, commercial prices got so low it was ridiculous and we passed on most, but realtor and property management tickets went way up with less stops per day. The super rich and water damage tickets stayed the same. It was a long slow process for the pendulum to swing to where it was before October of 08 where everyone had money to burn. We had to increase prices for gas when it went to $4.50/gal here, but everyone understood that. It never was scary for us, the game just changed a bit and not having all our eggs in one basket made it easier to adjust. Some residential only cleaners flat out died here, just like home builders and large commercial construction firms. Diversity was our saving grace.

I was working for Coit in Las Vegas st the time and we were hit especially hard. Las Vegas had been going through an explosion in home building at the same time that housing prices were at their all time high. A lot of people lost everything. People had paid a half million dollars or more for their new home just to have the market crash and suddenly their homes were worth half as much. A lot of people ended up walking away from their homes and letting the banks foreclose.

Construction came to a screeching halt on thousands of homes in the process of being built and most of those half built homes sayed that way for the next 5 years. Almost everyone in the construction business lost their jobs.

Las Vegas also being a popular vacation spot lost a lot due to people not having the extra money to take a vacation. Our tourism industry was hit hard and thousands of people lost their jobs.

At Coit we saw business cut in half. My boss being the kind man he was did not lay anybody off which actually hurt all of us. We worked on commission only so when the workload went down by half so did all our paychecks. Towards the end when I left I was taking home around $600 every 2 weeks, sometimes less. It was at this point that I left Coit and started my own business.

Seeing all the guys here saying they weathered the recession just fine makes me feel a bit better but the thought of another big recession still makes me nervous.

 

[Jim Davisson]

I was working for Coit in Las Vegas st the time and we were hit especially hard. Las Vegas had been going through an explosion in home building at the same time that housing prices were at their all time high. A lot of people lost everything. People had paid a half million dollars or more for their new home just to have the market crash and suddenly their homes were worth half as much. A lot of people ended up walking away from their homes and letting the banks foreclose.

Construction came to a screeching halt on thousands of homes in the process of being built and most of those half built homes sayed that way for the next 5 years. Almost everyone in the construction business lost their jobs.

Las Vegas also being a popular vacation spot lost a lot due to people not having the extra money to take a vacation. Our tourism industry was hit hard and thousands of people lost their jobs.

At Coit we saw business cut in half. My boss being the kind man he was did not lay anybody off which actually hurt all of us. We worked on commission only so when the workload went down by half so did all our paychecks. Towards the end when I left I was taking home around $600 every 2 weeks, sometimes less. It was at this point that I left Coit and started my own business.

Seeing all the guys here saying they weathered the recession just fine makes me feel a bit better but the thought of another big recession still makes me nervous.

Not all areas of the country can be lumped in together, in our examples they are not the same for other areas of the country. Your area with the major industries of tourism and construction booms suffered, like our area of banking, furniture makers and construction booms. SUV's were for sale everywhere, pawn shops full of tools, lots of unemployment, etc...

I should have bought a pile of Bank of America stock when it fell to $5.25 a share, still kicking myself for that one...

 

[OxiFreshGuy]

Yeah ouch Jim, could've quadrupled your money.

I know ZeroreZ plans for recessions - that's how they take over markets. Wait for it to hit and cause all the little guys to fail and then they are the last ones standing. Just gotta weather the storm.

 

[ACP]

Ita not going to hit like 2008 at all... that was caused by lots of unsecured loans, people taking out ridiculous mortgages that they would never realistically be able to pay off in 50yrs.

Plumbers making 70k/year were buying multiple homes lol.

 

[Select]

Ita not going to hit like 2008 at all... that was caused by lots of unsecured loans, people taking out ridiculous mortgages that they would never realistically be able to pay off in 50yrs.

Plumbers making 70k/year were buying multiple homes lol.

I can agree with your point.
But how do we know if something else besides loose lending is brewing?

Maybe my way of saying it would be nice to be so certain in my opinion. Maybe once I achieve a certain level of success in the industry or in my own business I will develop the ability to proclaim my thoughts and opinions as fact.

Just thinking out loud on this one is all guys (and gals?).

 

[Jim Davisson]

I can agree with your point.
But how do we know if something else besides loose lending is brewing?

Maybe my way of saying it would be nice to be so certain in my opinion. Maybe once I achieve a certain level of success in the industry or in my own business I will develop the ability to proclaim my thoughts and opinions as fact.

Just thinking out loud on this one is all guys (and gals?).

That's the best part of being an owner. You can run fast and loose or tight to the hip, it's YOUR company to run as you see fit. I listen to other owners operations, but know that their blueprint isn't mine and if I followed it I would fail, just as if they followed mine they would fail. I play to my strengths and work on my weaknesses daily. If your passionate about what you do, you won't fail... I promise you.

 

[awratchford]

Since we dont clean anymore, strictly general contractor with a speciality in insurance claims we've been able to put back a good personal war chest. Secondly working on stock piling long term food supplies to last at least 3 years, some cash kept in a safe instead of bank. Supplies of propane, wood, water, etc. That's how we prepare for a recession

 

[OxiFreshGuy]

Food is the easy part - water is a different story =(

 

[KwikDri]

I was working for Coit in Las Vegas st the time and we were hit especially hard. Las Vegas had been going through an explosion in home building at the same time that housing prices were at their all time high. A lot of people lost everything. People had paid a half million dollars or more for their new home just to have the market crash and suddenly their homes were worth half as much. A lot of people ended up walking away from their homes and letting the banks foreclose.

Construction came to a screeching halt on thousands of homes in the process of being built and most of those half built homes sayed that way for the next 5 years. Almost everyone in the construction business lost their jobs.

Las Vegas also being a popular vacation spot lost a lot due to people not having the extra money to take a vacation. Our tourism industry was hit hard and thousands of people lost their jobs.

At Coit we saw business cut in half. My boss being the kind man he was did not lay anybody off which actually hurt all of us. We worked on commission only so when the workload went down by half so did all our paychecks. Towards the end when I left I was taking home around $600 every 2 weeks, sometimes less. It was at this point that I left Coit and started my own business.

Seeing all the guys here saying they weathered the recession just fine makes me feel a bit better but the thought of another big recession still makes me nervous.

I agree. I was one of those guys in Arizona. I lost everything. Wong timing for me I guess. Dumped a lot of capital into a start up in 2007 and it just turned to the worst after that. We lost it all. Luckily I had some emergency funds saved to weather a storm but it was much larger of a storm for me to handle. Very humbling time for our family. I will say though that I have become stronger mentally because of it. On the grind back up now.

 

[rob allen]

This thread was not to predict future economies or to even be negative about the future. Rather a positive thread to help others see this industry is “recession resistant” but still it’s best to keep overhead low, bills paid up and live under ones means.

 

[PistolPete]

Recession doesn't always mean catastrophic fallout like 2008.
That was an anomaly caused by the government backed mortgage crisis.
Recessions are typically non events and are barely noticeable.
Ignore the doom n gloom media machine.
As Rob said, keep debts low and savings up.
That's just good practice anyway.

 

[PistolPete]

Opinion | Recession Fears Are Overblown

The yield curve is no longer a reliable predictor, and other economic indicators are strong.

www.wsj.com

 

[OxiFreshGuy]

2008 hurt me a lot personally. I had just graduated college. No good jobs out there. Spent the summer at the tennis courts...developed an awesome serve I still carry to this day! =)

 

[Lars]

I hope we can all weather the storm and make it out on the other side ok.