Is Your Glass Half Full?
A recent survey of the electrical wholesaler market has indicated that general feeling has moved from one of optimism to a more pessimistic outlook. Hardly surprising with the headlines in the press constantly heralding a return to the Dark Ages with painful-sounding terms such as ‘crunch’ and ‘squeeze’. But underneath the layer of gloom are glimmers of light from areas that are proving more resistant to the economic pressures…
Wholesalers have suffered particular problems with the downturn in the building market, especially with regard to new domestic property. This has had a significant impact on smaller wholesalers who rely heavily on the new build market and being the huge beast it is, the housing market is unlikely to improve quickly. That said, the research company, AMA, who produced the report believe that businesses who actively seek new opportunities in the commercial and industrial sectors can still hit rich seams of revenue.
This advice carries over to all areas of the electrical industry, whether you’re a wholesaler, contractor or manufacturer. Diversifying spreads the risk, though it doesn’t guarantee security. The important thing is to highlight a growth area that neatly complements your current skills and resources.
The ECA has also been very vocal in promoting diversification as a means of escaping the full force of a recession with Chief Executive, David Pollock, stating in July: “Despite these difficult times there are still many areas within our industry where businesses can grow and prosper. New technologies are emerging at an increasing rate and demand for intelligent solutions provides firms with substantial opportunities. Diversifying into specialist areas could ultimately widen the scope for work and offer better prospects."
Good advice, it would seem, but where to look for the pot of gold? AMA suggest CCTV, lighting, portable accommodation and fallout from energy efficiency and disability discrimination legislation as good areas to move into as they represent industries that are likely to grow despite national economic conditions.
We are still at the stage where the most significant impact is on confidence rather than the balance books so remaining positive and reacting before things get tight could make the potentially bumpy ride much smoother. People involved in the electrical industry are lucky that their skills and resources can be applied to a very wide range of areas, afterall every industry uses electrical equipment in one way or another. So, diversification should not be too restricted by lack of choice.
I’d be very keen to hear from people who have diversified their business to ready themselves for a downturn. When was the decision made and how was it made? As always, email richard.scott@imlgroup.co.uk
Enjoy the newsletter,
Richard Scott
Editor
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