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Business Services
Working on your business, not just in it
Why the best builders’ merchants are using today’ s challenging market to build stronger businesses for tomorrow.
ASK almost any builders’ merchant how business has been over the past couple of years and you’ ll probably hear a similar response. Trading is difficult, and the sector hasn’ t bounced back in the way many had hoped 12 months ago.
Costs continue to rise, margins remain under pressure and every investment decision feels more significant than it did five years ago. Most merchants are still relatively busy, but they’ re having to work much harder to achieve the same results. That doesn’ t necessarily mean businesses are in trouble, but it does mean there is far less room for inefficiency.
According to Chris Maityard, Founder of business consultancy Moorgate Management, this is exactly the sort of market where businesses can make the biggest improvements.
“ When markets are booming, businesses can often carry inefficiencies without realising it,” he says.“ When markets become more challenging, those weaknesses become much more visible. The businesses that come through strongest are usually the ones that use quieter periods to improve how they operate rather than simply waiting for trading conditions to recover.”
That philosophy sits behind Moorgate Management’ s work with builders’ merchants, distributors, suppliers and buying groups across the building materials sector.
As a Builders’ Merchants Federation( BMF) Business Service Provider, and one that has been shortlisted for this year’ s BMF Service Member Engagement Award, Moorgate is now offering all BMF members a free, confidential Business Health Check. Rather than providing generic advice, the process gives merchant businesses an independent assessment of where opportunities exist to improve profitability, strengthen operations and prepare for future growth.
Moorgate works exclusively within the building materials sector, using Chris’ expertise, and that of his team, to help other businesses succeed. Chris has spent almost his entire career in senior leadership positions including CEO, CFO, COO, Managing Director and Chairman roles across merchant groups, buying groups, construction businesses and global technology companies. Having worked across sales, finance and operations, he understands the pressures
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currently facing merchant businesses from every angle.
A strong place to start
That breadth of experience means conversations between Moorgate and builders’ merchants rarely begin with business jargon. Instead, they usually start by walking around the yard with the owner asking a few straightforward questions.
Why has profitability fallen despite sales holding up? Why does one branch consistently outperform another? Why does cash always seem tight, despite healthy turnover? Why is the management team constantly firefighting instead of planning ahead? The answers often reveal much bigger opportunities for efficiency and growth.
One of the most common issues Chris encounters is owners becoming trapped inside their own businesses.
“ Owners often tell us they’ re working longer hours than ever, despite having experienced management teams around them,” he says.“ Usually that’ s a sign that too much knowledge sits with too few people. If everything depends on one or two individuals making every decision, it becomes much harder to grow the business.”
Creating clearer responsibilities, improving accountability and giving managers the confidence to make decisions allows owners to spend less time solving today’ s problems and more time planning for tomorrow.
Financial clarity is another area where incorrect assumptions can frequently replace facts.
A branch may appear exceptionally busy. The yard is full, delivery vehicles are constantly on the road and sales look healthy. Yet, when the figures are analysed properly, that same branch may be contributing very little to overall profitability.
The same applies to customers. High turnover does not automatically mean high profit. Delivery patterns, credit terms, returns, administration and stockholding all influence what a particular account is really worth to a merchant’ s business.
“ One of the biggest surprises for many businesses is discovering where their profit actually comes from,” says Chris.“ Until you understand customer, product and branch profitability, it’ s difficult to know where is best to focus your time and investment.”
In Chris’ s experience, business challenges rarely exist in isolation, and falling margins often expose weaknesses elsewhere. Cashflow becomes tighter, owners spend more time solving day-today issues and long-term planning slips down the priority list.
That is why Moorgate looks at the complete business and the journey its owners are on, from its people, operations, commercial performance and financial management rather than treating each issue separately.
Operational efficiency is a good example. Instead of simply cutting costs, it may involve improving delivery planning, reviewing stock management, simplifying administration, strengthening supplier relationships or making better use of technology. Small improvements across several of these areas often deliver far greater results than one major change.
Cashflow is another subject that comes up repeatedly.
“ People often say cash is king,” Chris says.“ Businesses rarely fail because they don’ t have customers. More often, they struggle because they run out of cash before they realise the value of the work they’ ve already done.”
One recommendation Moorgate regularly makes is introducing a rolling 13-week cashflow forecast. Rather than relying solely on monthly accounts, it gives management teams early visibility of future pressure points, allowing them to make informed decisions before problems become critical.
The Business Health Check now available to BMF members gives Chris and his team the opportunity to understand what owners are trying to achieve before making recommendations. If further support is needed, they develop a clear proposal, agree measurable objectives and work alongside the management team to implement practical improvements.
To learn more about how Moorgate Management can help your business, a new webinar available at www. bmf. org. uk gives more information about the support that Chris and his team can provide.
If you’ d like an independent assessment of your business, contact your local BMF Regional Manager or visit www. moorgatemanagement. com.