How to prepare for (and make the best of) market uncertainty.
Coronavirus: A Black Swan Event
During the past month, we have seen a Black Swan event enter the market with the coronavirus creating hysteria in the financial markets and the media. The hysteria will calm down and you as a decision-maker will be faced with making strategic choices on how to move forward.
Up to this point, it might have looked like the economy was on autopilot with the housing market being under-built. Housing Tides™ gave you valuable intelligence, with forecasting and a platform for tracking housing supply indicators. With plenty of business at hand, you could plan for smooth sailing. Then, the unexpected Black Swan swam into your pond, panicking your ecosystem.
Strategically Position Your Business
- Staff Appropriately
Right-size your company. If there is a slowdown in housing, make sure you are staffed with the best people. In an age where it has been a huge challenge to hire anybody, take advantage of any employment tightness easing. - Watch Your Debt
With interest rates so low it has been tempting to borrow to expand your business, make capital investments in machinery or expand property and buildings. Corporate debt is as high as it has ever been. Be prudent. Trim your debt to capital ratio. Strengthen your relationships with your lenders and capital partners. - Keep Your Customers
Your customers are your most valuable asset. Take every opportunity to reinforce your relationship with them. Your customers will have issues and problems. Work with them in solving what is most important to them.
Hold Steady
We don’t yet know what impact the coronavirus will have on the housing industry. Don’t overreact. Once the fog of the hysteria clears, keep in touch with the ever-shifting tides of the market.
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About Jeff Whiton
Jeff formerly headed operations for Lennar and KB Home in Colorado building nearly two per cent of the state’s total single-family housing stock. He was honored as Colorado’s Home Builder of the Year in 2001. Whiton also served as the CEO of the Home Builders Association of Metro Denver for eight years reviving the association from near bankruptcy after the Great Recession.
2 Comments on “Coronavirus: Preparing Your Business for Turbulent Times”
Thank you for this logical, reasonable approach…to calm the hysteria that is brewing. My clients at Building Knowledge Canada so appreciate all you do. Thank you!
Hi Tracy! We’re so glad that you found our post useful, thank you for your kind feedback. We appreciate all of you at Building Knowledge Canada!