Getting back to basics

The newspapers have been full of opinion and comment following the chancellor's autumn statement; employment, taxation, the European economy and even the great British weather seem to be governing how well we will or won't do over the next few years. But for those of us operating in the timber trade is that totally true?

Is the taxation level a major crisis when there are so many companies in our industry not making any profit at all? Should we blame the price of wood or the difficulties of the sawmilling industry in Scandinavia, or should we focus on the things we can do, change and improve?

Margin is the difference between what you sell something for and what it costs you to make and deliver it. As an industry we rarely achieve the right selling price because our customers always say our prices are too high so we look to reduce costs or quality to achieve a positive margin. I can't remember customers ever saying "you're miles too cheap" can you? It's not human nature! So we assume they are correct and as a consequence we have become very good at negotiating our margin away.

I wonder if the John Lewis group adopts such a strategy, I suspect not. Everyone knows they will not be that cheap but they do offer good quality products and their staff seem genuinely pleased to serve you and, what's more, they are a very busy, admired and profitable company.

We can't continue to blame the government or the economy for our industry problems; it may be easy and convenient but it's just not true. We need to go back to basics, concentrate on offering good quality products backed by good service and then charge a fair price for them. I can hear the moans of "that won't work, we'll just lose orders". At Severn Valley Woodworks we took the recession as a chance to look at new markets and opportunities. We invested heavily in plant and equipment to increase our capacity and to improve the service we provide to our customers. As a consequence we have exceeded both our sales and profit targets for each of the last five years.

As directors and owners of our company we each work at the 'coal face' of our business; we involve ourselves heavily with our customers, providing them with staff training and support. We listen to what our customers want and then try hard to provide it - hardly rocket science but it works!

For our industry to succeed there needs to be a vertical integration of the supply chain from forest to end user. At Severn Valley Woodworks we feel we embrace this not just by offering FSC and PEFC products or latest generation treatment technology but also by helping both our suppliers and customers by understanding their individual aims and then playing our part in helping to achieve them.

In respect of the outlook for 2013, my view is that it will be what we make it - and in truth that has always been the case.