Graham Lunn, Chairman of Jack Lunn Group
Graham Lunn, Chairman of Jack Lunn Group, the Yorkshire-based construction, property and development business, which last year generated an annual turnover of £40 million, discusses how the year ahead may affect family-owned construction businesses and how organisations can best position themselves to stand out in a crowded market place:
My father founded the Jack Lunn Group in 1949 and over the last 60 years, and three successive generations of the Lunn family, we have worked hard to make the company name synonymous with excellence, quality and customer service. We are practiced in adjusting to the peaks and troughs of the industry and having survived numerous recessions, are well placed to share our views on surviving the present tough economic climate.
The construction sector has in reality been one of the worst hit by the economic downturn. The Construction Products Association has forecast a 3 per cent decline in construction output in 2010 following a 12 per cent fall last year. Every Yorkshire construction business faces a unique set of challenges in 2010 and the family owned business is no different.
The pre-budget report confirming substantial cuts in public spending, whilst broadly expected, is still of great concern to everyone in the industry and with many private sector projects on hold, contractors are competing for a dwindling number of projects in an ever-increasingly competitive market place. In order to survive, a family business must differentiate itself by distinguishing its unique selling points. Trust and strong working relationships are core attributes of our business and we work hard to understand and deliver to our clients’ expectations. Access to senior staff is often much better within family run businesses and these individuals take a more hands on approach and there is a clear chain of responsibility.
It is essential that customer relationships are managed and nurtured with the overall goal to find, attract and win new customers, retain those the company is working with, as well as attracting former customers back into the business. Open and honest communication is essential and creating a good client rapport will greatly benefit the development of your future relationships. Regardless of project size and value, always deliver the best possible solution - say what you mean and do what you say.
Internal politics can potentially pose a risk to the family business and it is essential that a clear chain of command and lines of authority are in place to allow quick and effective decision making. Stability and long term planning are often key attributes of family owned businesses, however if not managed correctly, a family business can sometimes lead to an inward focus, with organisations failing to benefit from new ideas and innovations. Ensuring a healthy mix of family and non-family members, from different and complementary disciplines, within the Board of Directors is an essential way that the Jack Lunn Group remains both relevant and at the leading edge of our industry.
Our highly flexible business strategy ensures that we present a diverse client offering and are quick to react to the prevailing conditions. Never underestimate the importance of market research and in depth analysis to identify key trends and always invest in your staff by training and employing the right people to take the business through this difficult time. However tempting it is to focus on the economic cost, businesses must continue to offer best value and clients need to be aware of the threat posed to their projects through the current trend in unrealistic tender prices. Suicidal bidding has caused the downfall of many construction companies in the past and if this practice continues, will undoubtedly lead to business failings in the short to medium term.
We are cautiously optimistic about the next 12 months but must remain vigilant and continue to plan our strategy to differentiate our business and offer our clients the best combination of value and quality.