We’re fast-approaching the half-year point in the worst economy in nearly 80 years. Most of our clientele is doing better than the economy. We’ve had only one of our customers go out of business, not bad out of the roughly 50 companies we work with. (The one that didn’t make it was an anomaly- the president skipped the country, which really had nothing to do with the viability of the business.) I think the fact that we’re all still in business speaks well of companies who have recognized the importance of solid business procedures. All our clientele have invested in Timberline, US Cost, Win Estimator, Primavera, OnCenter, Dexter & Chaney, and in some cases more than one of the above. That commitment to process is one of the attributes that separates the good companies from the also-rans. Our commitment is expertise with those systems, to help our customers get maximum efficiency and productivity from that investment. We at Cassell Consulting are having a decent year. Our revenue is down 11%, not as good as we’d hoped, nor as bad as we’d feared. In January I stated that a good year in this economy would be between 90% to 110% of last year’s revenue. Considering the economic news that we hear and read on a daily basis, I’ll take it.
Our clientele reports that it is mainly living off last year’s backlog, a pervasive trend in this market. Not even ENR’s Top 100 are faring any differently- it’s a good thing that 2008 was a good year. The trends of the last quarter are continuing – decreasing profit margins, more bidders on every job, and at times companies bidding what appears to be downright foolishly. Large contractors are bidding smaller jobs, small contractors are bidding larger jobs, and unfamiliar names are appearing on bidders’ lists, out of their primary area of expertise. The good news out of all this remains the same: the pretenders won’t be around when the market improves, and those of us with staying power will emerge leaner and smarter. We’re hearing from several customers who’d fallen behind on their housekeeping, too busy last year with all hands on deck just to run their projects. Now they’re taking the time to go back and re-tool, to maintain the sharp edge on their estimating and project management systems.
We’re staying busy. On the Sage Timberline side, we’re building a full suite of new custom assemblies for our SAP customers, Seedorff Masonry (Iowa & Nebraska), and Absher Construction (Washington), as well as for Wadsworth Builders (Montana), on a daily basis. Beachside Roofing Hawaii and PBC Companies (California), and Montana Builders are all up and running, bidding 100% of their work with completely revamped systems that we jointly designed with them. We have smaller projects going with Martel in Montana and Arita Poulson in Hawaii. We’ve been doing some project management consulting on a residential project in Hawaii. We have a Primavera SureTrak proposal out for Guam, and some larger Timberline proposals closer to home, but just like in construction, definite “maybes” don’t produce cash flow. Finally, we’re continuing to invest time in our future initiatives: Modelogix from WinEstimator and Success Estimator & Enterprise from US Cost. Vico Software (along with AutoDesk & Bentley, leaders in BIM-compliant tools), contacted us this week and is interested in enrolling our company in their new certified consultant program. What is your company doing now, to gain a step on the competition? Where will it be when the market turns? Stay tuned, and let us know what you’re seeing on the horizon.