What the experts say

Project a coherent business image

Andrew Fordham, head of business marketing, Eircom TO help confront the challenge of developing several businesses at the same time, Mark Sheeran should draw on his marketing experience and think about how the various elements best fit together. He can then present a complete story to his prospective customer base.

The customer is the place to start. Sheeran should assess if there are any overlaps: areas where the same customer requires more than one of his products. He should also assess whether there are untapped customer markets. By targeting these areas, he can more easily build his story and therefore piece the various businesses together coherently.

There are several benefits to this as it will enhance his employees’ understanding of the firm’s vision and it will bring greater customer clarity about the value of his products. At the same time, Sheeran should decide on the best channel to communicate this message. His current set-up might be good enough, but I would suggest the internet can play a role as he can precisely control the message he gives his customers.

Better understand customers’ needs

Noel Kelly, SMB sales manager, Hewlett Packard ALTHOUGH his buyers are garden centres, his customers are ordinary consumers. If this part of the business is to thrive, Sheeran will need to devote time to understanding their needs and wants.

The particular challenge in the recreational goods category is that consumers buy products for emotional rather than commercial reasons. Sheeran will need to dedicate some time to understanding the buying behaviours of these consumers if he is to maintain and develop the Garden Gate range over the long term.

Protecting margins with retail partners is not a simple task.

Margin can be eroded in two ways. Through their buying power, retailers can simply insist on lower prices or withdraw their business. The issue of buying power is not prominent now, but must be borne in mind as the company expands its retail network. Second, services provided to retailers can invisibly erode the margin. The true margin a firm earns is its revenue less its cost of servicing. Sheeran needs to be careful that his proactive stance towards retailers does not lead to margin erosion.

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Consider buying in expert knowledge

Willie Maxwell, director, InterTrade Ireland Acumen Programme THE Sheeran business has several different elements. The pallet business is a tight demanding industry and while it has held up so far it may not be so rewarding in the long term.

A professional distribution business that markets a range of Sheeran timber products supplemented by additional agency lines represents a growth opportunity for the firm. The fact that it has a mere 25 retailers on its books indicates that it has the garden centre market inadequately covered. It needs to commit greater resources to allow it to increase its range and ramp up its selling efforts.

There are some extremely professional players already supplying this particular market, so Sheeran needs to demonstrate to his retailers, and to the public, that he is serious about this side of the business.

If he is short on knowledge of the make-up and needs of the sector, he could buy this in. He needs to a develop an expert to look after this side of the business and if such a person does not exist internally then they must be recruited.

Build a team of experienced managers

Kevin Sheehan, partner, Owner Manager Group, Deloitte HAVING established several different product offerings and identified where growth opportunities exist, Mark Sheeran should build a team of experienced product managers who will be responsible for driving growth and efficiency within each product group.

It is too difficult for him to drive growth in each area as well as manage the finances, human resources issues and regulatory problems. He needs dedicated support.

A sensible approach would be to start with the sector with the greatest growth potential. Identify an individual with the right “fit” and experience, then allow them time to develop a plan, implement it, and measure performance against agreed targets.

Also, a strong financial controller would ensure that the growth is properly managed, through working capital management, budgeting and meaningful monthly management reporting. Such people are costly. However, with the right performance-based remuneration structures in place, the initial investment should pay for itself through increased revenues and stronger cost control.

Focus on higher-margin products

Sean Murray, director of marketing, BUPA Ireland MARK SHEERAN needs to maximise the use of his premises and improve productivity levels within the workforce. The company’s location, and its emphasis on growing from a local base, would appear to indicate distribution costs are not an area for big improvements.

Garden furniture, tables and gates are higher value-added products than the company’s traditional products and offer the prospects of higher margins. For that reason, where choices have to be made in terms of allocation of space at the site, it would seem sensible to give it to these products.

The business appears quite labour-intensive with turnover per staff member at less than €80,000. Increased throughput of value-added products would boost this figure.

The link with the new European supplier provides the opportunity to benchmark costs by comparing the bought-in price with the probable cost of home manufacturing. This could reveal an opportunity to make under contract certain lines for Europe and improve efficiency further.