Whilst it is generally accepted that trading conditions, despite Brexit and the precarious global political climate, are in good spirits here in the UK, there are still chinks of negativity that should be keeping everyone on their toes.
The latest Plimsoll reports are out and there are some areas that we as an industry should be paying attention to. One of the standout areas for me is their latest research of the 1328 largest window and door companies. Of those, 230 were rated as in “Danger”. And they note that 90% of the window and door companies rated in “Danger”then went bust within two years. An ominous warning.
I always say stats and data tell the real stories, and the latest Plimsoll research makes for interesting reading.
Danger and caution
These are the figures you need to know from the latest Plimsoll research of window and door companies:
The “Danger” category of companies is the second largest in this report, although significantly behind those rated as “Strong”. In total, there are over 800 companies with positive ratings, well over half of the numbers in this bit of research. This is something we should take as a positive.
However, the rest of the 1328 companies are placed on what can be called neutral or negative ratings, and there’s not an insignificant number of those. It’s the relative strength in those numbers which can give us hints as to the risks ahead.
Pressing situation for some
According to Plimsoll, 9 out of 10 companies they rate as in “Danger” then go out of business in a two year period. That’s an uncomfortably accurate ratio if you happen to be in the bracket of those 23o classed as in danger.
It creates for a pressing situation. Two years to turn the business around or face almost certain failure. That doesn’t make it an impossible task however. Good business leaders will be proactive in improving the fortunes of the window and door company.
For example, although not always an ideal scenario, businesses could make staff cuts, if only on a temporary basis, to curb outgoings. If and when things become stable, staff levels could return to normal.
The more positive route forward is to push a more diversified portfolio of products. A “Danger” business could look at selling or fabricating a raft of new products to attract new home owners or installers where they had not previously. It is well known that a home owner in 2017 is looking for options when it comes to new windows and doors. And it’s more likely that an installer with more than just shiny White windows is going to win the business. It’s not always straightforward to introduce a whole new range of products. There’s training involved, a period of time to get used to demonstrating new products, adding the product knowledge. But it’s worth it in the long run. And two years is plenty of time to get to grips with new products and new revenue streams.
All in all, this research is more positive than negative. More companies are in a positive position than a negative one, which is a good sign for the industry. As more research is released throughout the year, it will be interesting to see which way these numbers swing.
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