With economic uncertainty ahead, Scope Bathrooms’ co-owner Derek Miller is bullish but making plans to cater to an ever-changing contracts market and prepare for a hard Brexit
As 2019 kicks off, I have been turning my attention to the year ahead and questioning whether or not our business is properly positioned to continue a run of good form that goes back to the first post-recession year of 2014.
The past five years have been kind to the contract-supply sector. House builders have significantly boosted output and hotel development has continued at speed. Scope Bathrooms, the company I jointly own, has benefited greatly from this, increasing turnover by 120% in four years, with a wide portfolio of clients and sites.
However, we have never been ones to rest on our laurels. During that period, improvements have been made to both front-end and back-end service to allow us to take advantage of a growing market. It is no use winning new business if it can’t be sustained. Improvements to the front-end offer have also increased our appeal to the wider group of clients that have emerged in recent times.
So what of 2019? Will it be necessary to revisit and sharpen our business strategy or will this be a year of consolidation? Truth is, in this most bizarre of years, no one really knows what to expect. The contract sector is buffeted by macroeconomic factors in a far more direct way than retail is. Contract business thrives with economic stability – the one factor sure to be missing in 2019.
At the time of writing, the Brexit situation is completely up in the air. One thing is for sure: it is a self-inflicted wound of epic proportions. The Brexiteers’ panacea of a truly independent UK bruising its way to world domination was an infantile pipe dream. I accept many people had their reasons to vote Leave, but none come anywhere close to justifying the resulting disruption to trade.
“Regardless of what politicians do to screw up the country, businesses have to plough their own furrow”
Derek Miller, Scope Bathrooms
Tweaking the strategy
However, the tale of woe that is Brexit is for another day. Regardless of what politicians are doing to the screw up the country, businesses have to plough their own furrow.
Indeed, over the course of the last 10 years, Scope has had to endure a banking crash, a four-year recession, a two-year Scottish independence campaign and, after 18 months of political and economic stability, the UK’s pending departure from the EU.
Whatever strategy tweaks we require for 2019, Brexit will affect it. If the country leaves the EU with no deal, goods cannot enter the UK from Europe: simple as that. So strategy ‘tweak’ number one is to ensure every European-sourced product we require after March 29 is somehwere in a UK warehouse. It is actually more of a full-scale surgery, especially if we end up with a hard Brexit.
Thankfully, our cherished supply partners have not buried their heads in the sand and are actively evaluating their positions and acting accordingly. There is a limit on what can be stockpiled, so the sooner some sort of agreement is signed, the better.
A look ahead
Brexit notwithstanding, we have to look at what the market will be like this year and be sufficiently flexible to respond. House-builder strategy began to shift in 2018, with many developers looking to increase the number of houses they build – the country is still significantly short of housing, after all. This has seen many house builders entering markets they previously didn’t consider.
For example, Scope’s two largest clients have made inroads into the first-time buyer/small apartment sector, and we will sharpen our strategy to ensure we can supply specs to the correct level and budget for this entirely different sector. House builders are also facing a significant attack on their margins, so, after a few years of ever sexier specifications, chances are we will be entering a period of value engineering – a dreaded phrase in our world. Our job, as always, will be to find solutions rather than moan about realities. In some ways, this is nothing new.
One nice aspect of 2019 is that Scope will celebrate its 20th birthday in the summer – a significant anniversary. The passage of time has taught us almost everything there is to know about our industry, including to never take custom for granted, and has developed within us the resilience and thick skin to take the pain as well as the gain.
Too many people overcomplicate their businesses and worry about what everyone else is doing. Two overriding philosophies will continue to drive our strategy for 2019 and beyond – look after the customers, and don’t spend money that doesn’t need spending.
On that basis, we will just keep calm and carry on.