The Crystal Group comment: Q1 2019

Kevin Morgan, Group Commercial Director The Crystal Group is BMBI’s Expert for PVC-U Windows & Doors.

Last month the Builders Merchant News’ annual Leading Lights supplement highlighted the stellar growth of national and top independent builders’ merchants. Most have grown by acquisition or greenfield set up. A few have extended their geographical reach. Most are growing profitably too, but could they grow faster more profitably? Are they overlooking some larger, lower cost opportunities? Strategically, there are just two ways to grow: by acquisition along the A road, or organically via the O road.

Organic growth is lower cost, lower profile and lower risk, and comes easily in the early life of a business. But, maintaining that momentum requires sustained drive and a focus on new opportunities to develop potential markets on your doorstep. Many start buying growth through acquisition because they’re no longer growing organically. Some because they see other builders’ merchants growing much faster. But there are big largely untapped markets on their doorstep that can easily be tapped with the help of partners. The market for PVC-U windows, doors and conservatories for example is around £5bn, comfortably more than kitchens and bathrooms combined.

Builders can order supply-only windows and doors for a small extension all the way up to a supply and fit project worth £140,000 including VAT. Merchants’ sales of bespoke PVC-U windows, doors and conservatories to this market are surging. They’re growing fast because it’s easy selling a complicated bespoke product with the right package, and it’s easy selling to existing customers if the choice, quality and speed of service is better than they’ve been getting. And, adding an installation service gives merchants access to new incremental business by attracting builders and domestic customers who would never buy windows and doors or conservatories from merchants unless they installed them.

When you’re looking to grow, what’s not to like about the O road?

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Launched in 2015, the award winning monthly Builders Merchant Building Index (BMBI) report is the only reliable measure of repair, maintenance & improvement (RMI) activity in the UK. Filling an important gap, it can be widely used in construction, and by economists, Government, national media, commentators and influencers outside the industry.

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