Canadian Business Magazine: How to Build a Slump-Proof Business

Deborah Aarts from Canadian Business wrote an article about Ryan Murphy Construction featured on the ProfitGuide.com website. Read the full article here.

Resilience might not be exciting, but it’s what separates businesses that survive tough times from those that don’t. Just ask the owners of PROFIT 500 winner Ryan Murphy Construction, a Calgary company thriving amid a brutal local downturn.

Lara Murphy and Karen Ryan were feeling pretty confident at the advent of their construction business. They had experience. They had connections. They had fire in their bellies. They even had a name—Ryan Murphy Construction, a playful nod to the male-dominated industry they were about to take on. And in Calgary’s oil heyday, they had a client base desperate for the kind of skilled commercial and corporate construction work they were poised to offer. “It wasn’t ‘Hey, can you give us a quote?’” recalls Murphy. “It was ‘When can you start?’ You didn’t even need to discuss money.”

The pair had every reason to believe their new venture would be an indelible and immediate success when they incorporated the company in September 2008. Then the global financial markets fell apart.

Almost overnight, prospects disappeared. Instead of filling their days with strategic planning meetings and sketching out a long-term vision for the company, the pair donned hard hats, wielded hammers and changed light bulbs on whatever projects they could scrounge together. They didn’t have the funds to hire any skilled labourers, so the higher-level work of steering the company happened whenever they had a spare moment. “It was not,” Murphy reflects, “an easy time to be in business.”

They didn’t know it then, but that arduous launch forged a resilience in Ryan Murphy that has helped it to not only grow—revenue increased 595% from 2010 to 2015, placing the company in the No. 126 position on the 2016 PROFIT 500 ranking of Canada’s Fastest-Growing Companies—but to do so in very volatile conditions. Even as the recent oil downturn hit and once again set their Calgary base into retreat, the company added customers and increased overall sales. Why? Because its leaders have spent the past eight years building a slump-proof business.

Preparing for the worst is not a particularly sexy activity, which is why a lot of entrepreneurs don’t bother—especially in boom times. “It’s fine to talk about being prepared, but when you’re in the excitement of building a business and things are going well, it’s very hard to keep that top of mind,” explains Jim Dewald, dean of the Haskayne School of Business at the University of Calgary. But Murphy and Ryan had no choice: If they didn’t weigh risks carefully, plan smartly and resist the nagging entrepreneurial urge to act impulsively, their company would have failed.

They waited years before hiring their first employee—a woman they still refer to as “001”—because they wanted to be absolutely sure the business could afford the expense. They pounced on every networking opportunity, even when they were exhausted after long days of manual work. And they became fanatical about good bookkeeping. These steps helped position the company to grow when the economy recovered, and prepared it for Alberta’s downturn last year.

Take the duo’s fixation on keeping finances in order. That might sound like Business 101, but not every entrepreneur is capable of doing so: 39% of small business owners failed a financial literacy quiz created by Intuit Canada last year. Neither founder had a knack for numbers (“We’re more big-picture thinkers,” Murphy says), which is why they hired a finance head, Jack Mumford. He not only works a ledger like a pro, but actually informs his bosses when a problem might be looming.

As the first indications of tough times for Alberta appeared, Mumford came to the duo, spreadsheets in tow, and recommended where and how deeply the company needed to cut spending. “When the economy did what it did, we had some breathing room,” explains Ryan, who calls hiring Mumford one of the best decisions the pair has made. “He breaks everything down so it’s easy for us to understand, and he always makes sure we’re in the know.”

About that cost-cutting: Murphy and Ryan decided to pare down their spending on traditional marketing rather than their promotional efforts on social media, which is much cheaper. In fact, they amped up their presence on LinkedIn, Facebook, Twitter and, notably, Instagram to get their name—and their work—in front of as many people as possible. Under the direction of Murphy, the company created online diaries to document interesting projects, complete with beautiful photography and candid anecdotes about unique challenges, such as constructing a yoga studio in a building with a crooked ceiling. Few construction companies pay serious attention to social media, which makes the approach something of a novelty, and it’s brought in plenty of new business in the past year. “There’s been an absolute, true return on investment for us,” Murphy says. “I call it 21st-century word of mouth.”

By appealing to a wide audience online, Murphy and Ryan have held to their goal of minimizing the company’s reliance on single clients, or even single sectors. Part of that comes from one of the company’s most significant prospect pipelines: Ryan Murphy gets a lot of work via referrals from architects and designers it has worked with in the past, who tend to have varied customer bases. At any given time, the firm might be updating a retail store, constructing a medical clinic or restoring a heritage building. “We try to have as much diversity among our clients as possible,” says Ryan. “It’s a conscious decision.”

It’s also one that isn’t always easy to honour. “There’s a temptation in any business to gravitate toward what you like doing all the time, and to stop doing things you don’t like as much,” Murphy adds. Recently, the pair have made efforts to diversify geographically as well, with projects in Ontario and B.C.

Ryan Murphy is on solid ground today, even if its success hasn’t curbed the number of people calling the company asking to speak to “Ryan Murphy,” only to find two women in charge. The past year has had its share of stressful moments, however, and Murphy and Ryan are both frank about the challenges facing businesses in their Alberta home. “It’s staggering what’s going on here,” says Murphy. “I find it helps to focus on the aspects we can control, where we can make a positive impact as entrepreneurs.” Adds Ryan: “We work at what we can, one day at a time.” It may not be the most exhilarating approach, but it’s proving to be damn good business.