In an extensive and illuminating discussion with Chris Fairbairn, the driving force behind Mitre10, a prominent building supply company, we delved into various facets of the industry. From business growth and credit management to supplier relationships, staff retention, and future goals, this multi-part interview provides an in-depth exploration of the challenges and strategies within the construction domain.
Part One: The Growth Spurt
Chris Fairbairn opens up about Mitre10’s remarkable growth, showcasing a substantial surge in revenue within a year. We explore the contributing factors behind this success, emphasizing the pivotal role of relationships in the industry and Mitre10’s unique approach to cultivating strong connections with both suppliers and customers.
Q: Chris, what do you attribute Mitre10’s impressive growth to in the past year?
Chris Fairbairn: Our growth can be attributed to a combination of factors. Firstly, our emphasis on building and nurturing relationships in the industry has played a crucial role. Establishing trust with suppliers and ensuring our customers feel valued has been at the core of our strategy.
Q: How do you maintain those strong relationships with both suppliers and customers?
Chris Fairbairn: It’s about communication and reliability. We ensure that our suppliers know they can count on us, and we are responsive to our customers’ needs. Building a sense of trust and reliability has been key to our success.
Part Two: The Credit Conundrum
The conversation shifts to credit management, a critical aspect of the building supply business. Chris sheds light on Mitre10’s credit check procedures, underscoring the importance of trade insurance and addressing challenges related to callbacks, particularly in framing and truss work.
Q: Chris, how does Mitre10 manage credit, especially in a business where payment terms can vary?
Chris Fairbairn: Credit management is a significant focus for us. We conduct thorough credit checks before establishing accounts, and trade insurance adds an extra layer of protection. The callbacks in framing and truss work can be challenging, but our commitment to resolving issues promptly is paramount.
Q: Can you elaborate on the challenges faced in callbacks, especially related to framing and truss work?
Chris Fairbairn: Framing and truss work tends to be an area of frustration due to callbacks. The intricate nature of these components makes precise detailing crucial. If mistakes occur, we ensure a quick turnaround to rectify the issues and maintain positive relationships with our customers.
Part Three: Payment Terms and Cash Flow
Payment terms and cash flow become central to the discussion as Chris addresses the challenges faced by builders and suppliers alike. He emphasizes the significance of getting paid on time and explores the potential benefits of builders adopting a more secure financial approach, such as taking deposits.
Q: Chris, how do you navigate the challenge of getting paid on time in an industry where payment terms can vary?
Chris Fairbairn: Timely payments are a significant concern for us. We’ve implemented strict credit management procedures, but it’s also about fostering a mutual understanding with our builders. Encouraging the practice of taking deposits is one way to ensure a healthier cash flow for both parties.
Q: What’s your perspective on builders taking deposits, and how can it benefit both builders and suppliers?
Chris Fairbairn: Taking deposits is a smart financial approach for builders. It ensures they have a positive cash flow, allowing them to operate more smoothly. For suppliers, it provides a level of security and helps mitigate risks associated with delayed payments or unforeseen issues in the construction process.
Part Four: Supplier Relationships and Business Dynamics
Chris offers a comprehensive look into Mitre10’s supplier relationships, highlighting the importance of balance between primary and secondary suppliers. The conversation touches on the concept of builder accounts, drawing parallels with systems observed in the United States and Europe.
Q: Chris, how does Mitre10 approach its relationships with primary and secondary suppliers?
Chris Fairbairn: We maintain a balance by working with primary suppliers for consistency and reliability while also collaborating with secondary suppliers who specialize in specific components. This approach ensures a diverse range of options and better flexibility to cater to various project requirements.
Q: Could you elaborate on the concept of builder accounts and how it influences the business dynamics?
Chris Fairbairn: Builder accounts are instrumental in streamlining the process for both builders and suppliers. By offering a comprehensive supply-fix-install solution, we aim to simplify the workflow for builders, providing them with a one-stop solution for their material requirements. This not only enhances efficiency but also strengthens our relationships with our clients.
Part Five: Staff Retention, Hiring, and Business Goals
The discussion delves into the dynamics of staff retention and hiring, with Chris emphasizing the value of attitude when recruiting and retaining employees. The interview concludes with insights into Mitre10’s busy and quiet periods, along with a lighthearted exploration of potential multi-ownership and the company’s goals for the next five years.
Q: Chris, what qualities do you look for when hiring or retaining staff in your business?
Chris Fairbairn: Attitude is paramount. We seek individuals who are not only skilled but also align with our company values. Team players with a positive attitude contribute significantly to our work culture and overall success.
Q: Mitre10 has experienced significant growth. How do you manage busy and quiet periods, ensuring your staff stays engaged?
Chris Fairbairn: Busy periods are integral to our business, and we ensure our staff is well-prepared to handle increased workloads. During quieter periods, we focus on training, professional development, and refining our processes to stay proactive and ready for the next surge in demand.
Q: Looking ahead, what are Mitre10’s goals for the next five years?
Chris Fairbairn: Our primary goal is profitable growth. We aim to structure our business in a way that ensures sustained and profitable expansion. It’s not just about increasing revenue but doing so in a manner that fosters long-term success for Mitre10.
This extensive conversation with Chris Fairbairn provides a thorough and insightful look into the building supply industry. The challenges and strategies discussed shed light on Mitre10’s unique approach, positioning them as a notable player in the construction landscape. If you have further questions or wish to explore specific topics in more detail, feel free to reach out!