Home Cladding “Most businesses operate in the ‘here and now’, and yet planning for long term is vital”

“Most businesses operate in the ‘here and now’, and yet planning for long term is vital”

This year Vivalda Group celebrates a significant milestone in its growth. Formed in 1999, the nationwide façade supplier is now celebrating its silver jubilee – 25 years in the business. Founder and Director Peter Johnson (above) provides advice to those looking to emulate his success, and explains why he feels succession planning is vital to the future of any business…

There’s an old proverb that asks: when is the best time to plant a tree? The answer of course being: at least ten years ago. That pretty much sums up the challenge facing many UK businesses looking to secure longevity and profitability. It might also suggest why so few private businesses formally plan for the long-term – and why less than a third of all fast-growing businesses survive to the second generation. Most businesses operate in the ‘here and now’, and yet planning for long term is vital.

“Cost control in those early days dictated it was me selling facades in the day, cutting boards to size in the evening and delivering them to site at dawn the next day”

Above: Vivalda moved into façade system design and manufacture with the acquisition of MSP Facades in 2019.

Vivalda Group began as a one branch operation in West London, based on a hunch that there was a future in facades. Back then a major project comprising 1,000m2 of cladding panels was a subject of avid interest from suppliers the length & breadth of the UK. Showing how much the market has grown, nowadays we’re supplying wall areas ranging up to 30,000m2.

Cost control in those early days dictated it was me selling facades in the day, cutting boards to size in the evening and delivering them to site at dawn the next day. The office even became my overnight hotel – such is the determination of the entrepreneur building the foundations of a business for the long term.

So, what have I learned over the last quarter of a century? Granted, these points may not be relevant to everyone, but here are the top five reasons why I think Vivalda has grown into a profitable, nationwide, £43m turnover business.

Cash is king
From the very beginning I’ve taken the view that cash in the bank is vital. It’s the lifeblood of any business and in all that time I’ve never once received an invoice that couldn’t be settled on demand.

Discipline is key when it comes to knowing how much is in the accounts – on a daily basis and with a very sharp eye on aged debtors. One of the management tools that has kept us on the straight and narrow is our fair and open payment terms – suppliers know full well that Vivalda Group is good for the money, allowing us to benefit from large credit limits.

And never believe anyone who says they’ve never experienced a payment issue with a customer, that’s for the birds.

That said, I’m proud of our credit control function throughout the years; we provide a first-rate service and shouldn’t feel afraid to ask for rightful payment.

Above: The Link Building on London’s City Road is typical of the major recladding projects Vivalda now supplies.

Stages of development
Businesses are like bikes – if you stop pedalling them, they fall over. While Vivalda has always fostered a strong growth culture while never compromising on safety, quality or service, my tenure as MD was a balance between entrepreneurial risk taking and promoting the benefits of our service.

Above: Three generations of Vivalda management (L-R) Peter Johnson, Andy McEwan and Ben Jayes.

I equally understood the importance of growth, so a mere few months after day one, Ben Jayes, my old mate from a previous life (he’s still the right side of 50!), joined me to drive sales while I focused on the administrative side of the business. By 2008 it was time for me to move over, appointing Ben as Managing Director. To his eternal credit Ben’s tenure saw a period of huge growth for Vivalda as turnover increased from £8m in 2008, to £40m in 2022.

By this time we had become a 10-branch operation, employing around 160 people nationwide, the point at which we decided that the business needed to move to the next level. What we wanted was fresh thinking and a new set of skills to drive forward the largest distributor of façade products in the UK and Ireland.

After a year of searching, we were delighted to appoint Andy McEwan as Group Chief Executive. Andy brings major Plc experience, systems and strategic insights to the role, which is already transforming for the infinite better many of the ways Vivalda operates. It’s a major step from OMB to Plc style management and Andy, who has an instinctive ‘feel’ for the Vivalda Group, is showing exactly how it should be done. A textbook example of ‘when you know someone can do the job better, move over’.

Fiscal security
Businesses fail because they run out of money, so keeping a very close eye on the financial tiller – spotting potential bad debts, is key. For what it’s worth, we’ve always taken the view that a healthy set of tangible assets on the balance sheet is a good thing. We’ve never been tempted by business loans, however low the interest rate, and investment is paid for out of reserves. Nowhere is this more sharply defined than in our property portfolio where each building is unencumbered and owned outright.

The purists might say that a business owning buildings, plant and equipment is not a financially efficient one; well they’re entitled to their opinion but I say it’s given us financial stability and the independence to be masters of our own destiny.

Culture and customers
Often overlooked, but the less tangible aspects of human concern for your own people is crucial to the long-term success of any business, especially in construction.

During Covid, we stayed close to all of our suppliers and contractors – reassuring them of our operational position and ability to deliver product on a daily basis. We also made it clear to colleagues during those worrying times that we would commit to paying 100% of their wages until we came out of the other side of the pandemic. This wasn’t just fine words either; we did.

Making that kind of promise to your colleagues – and keeping it – is another part of our culture that I think has helped us through both the good times as well as the tough times.

www.vivalda.co.uk

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