What do you expect? We are in the midst of a war that was predicted to cost $50-60 Billion and we have spent $800 Billion to date. By the time its all over they are predicting it will cost $3 Trillion.

But all that aside, we are lucky <knock on wood>. We have a full plate through 2010. I just signed a contract on an entire steel mill yesterday. Now I just have to hold my breath that scrap will stay strong......

I have to agree with NukeWorker on this one. Not only the things he stated above, but the banks are getting worried about loaning money and the cost off business has gone up, including oil.

Think about it, if your looking at expanding your work plant and the cost of diesel to run your machinery keeps increasing and there is no sign of letting up, you would have to put those plans on hold just to cover the cost.

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Most business executives, engineers, project planners, and estimators in today’s business economy are or should be fully aware of inflation, deflation, cash flow economics, etc. These contingences are or should be built or developed into project estimates, contract documents, or scope of work – which are what I call “derivative costs” of doing business in today’s demolition economy.

Don’t let the doomsday and the careening markets or war costs scare you into a panic attack. We have been through this before: Oct 1987 meltdown, S&L crises in 1990, and the tech bust of 2000. While it is tough to see anything good about these rocky markets these markets present opportunities. The real challenge we think will be inflation – not the near term economic worries that the press or postings by some members are hanging on to.

Don’t expect the good times to roll for quite some time, but here are a few of the things that I will share with the readers of this community that our group is doing and planning to make our company better, stronger, and faster:

• We plan to keep building – When the top line looks shaky and the bottom line looks worse, the temptation is to go after discretionary spending. Fine – but we are not considering innovation, project development and building the company optional. Sacrificing our business future for a slightly more comfortable present is not worth it.

• We plan to communicate intensively – We will get information from where the client action is fast. We therefore will be ready to act on solid information and will be primed to shoot ahead of the cynical cycle of contracting. For example one of our client’s marketing gurus told us that sure projects are slow, but no big deal – But we found out by talking to the executive group (CEO) that they were anticipating a deep and prolonged drop in some project areas. We acted on that information reconfigured our business strategy to fit the new and unpleasant reality.

• We plan to evaluate our clients – In good times manage the P&L, in bad times cash and accounts receivable matter more. We are identifying our high risk, cash poor clients and developing a different strategy for them.

• We are saying no to across the board costs cuts – By all means we are going to cut costs if it makes sense, but we will make sure the cuts have purpose. Being on the downside of the business cycle is not much fun, but this is also an opportunity if you use the sense of urgency to improve business strategy, management, and discipline.

We feel that once the economy recovers like in the past years our gross and operating margins will be better than the industry medium and our P/E ratio higher. We have designed and are continually developing an escape plan. Research has shown that when people have thought through their reactions to high stress scenarios – such as a disaster or being a victim of a crime – they are much more likely to survive it…Ditto for the demolition business..

Again these are just our groups management opinions…

TKC