How to survive: adjust and stay positive
MORE than 120 of their peers have gone to the wall in the first three months of 2010, but the brothers behind B&G Construction seem full sure that their building firm will make it out of the recession intact.
"We'll definitely hang in there," says 30-year-old Richard Fitzmaurice, the older of the duo by a year. "We know a lot of fellows who have gone bust but we're doing fairly well, if we keep doing jobs well and give ourselves a good reputation that will see us through."
B&G notched up a turnover of about €300,000 last year, enjoyed a profit margin of about 5pc, and kept Richard, brother Brendan, third partner Gary Deloughry and about seven others in employment.
The Fitzmaurices expect to record a similar turnover this year despite a collapse in rates for individual jobs. "There has been a turn in the last five or six weeks," says Richard. "We're tendering for five or six jobs now, that would be a lot compared to the level of activity over the last six months when there was very little going on."
B&G may be beating the odds for construction companies, but Richard and Bernard know it could all have been very different. Their firm started off as a carpentry sub-contractor, coming to the market at the height of the boom in 2006.
The first job was for 48 highly specced apartments in Malahide village, a contract that took them almost a full year. "It wasn't a question of getting things finished, it was a question of getting things right," recalls Richard.
B&G managed to secure a handful of other development contracts that sailed the company happily through 2007, when their turnover was running at €400,000 to €500,000 and profits were in the 8 to 10pc range.
Then, things began to change. "We could see sub-contracting carpentry was dying out," says Richard. "The big sites slowed down."
B&G's response was to re-invent itself as a full service builder rather than a carpentry specialist. The company bought two sites in Santry and developed them into a pair of semi-detached houses, learning on the job as it made the switch from specialist to builder.
"We were lucky we got out [of the subcontracting] when we did," says Bernard. "If we had continued any longer and didn't branch out, I'd say we'd have got caught out [by not getting paid for jobs]."
The re-invented B&G had to establish itself from scratch in the builders' market, convincing architects to put them on their "approved" lists and working to a standard that inspired client recommendation.
"We weren't relying on reputation, price was the only thing we had," recalls Richard. To become competitive on price, B&G carried out most of the building work itself, outsourcing only the bare minimum like electrics and plumbing.
It was an approach that proved popular with 2008's value-driven market, and B&G expanded to about 20 people in its initial "builder" phase, as the stymied property market prompted homeowners to opt for extensions over trading up.
The fledgling construction company also began throwing its hat in the ring for commercial contracts, picking up jobs for the Porterhouse group, Lidl and the Portmarnock Country Club.
Rather than quashing all redevelopment, the recession has actually driven some renovation work, including the recent revamp of Portmarnock's banqueting and conferencing centre.
"They felt they were losing events that they should be getting and if they put the money in they felt they'd get it back," says Richard. "So far it's working really well for them."
Commercial jobs often hinge on partnerships with architects' practices, relationships that depend on those architects staying in business in a climate where so many of their peers are failing. "We've been lucky, in that none of the architects we work with have gone that way [closed]," says Bernard.
B&G also works hard to stack the odds in its favour by building up a pool of satisfied clients, so that only half their work comes from architects, with the remainder coming from recommendations.
The fledgling firm was also quick out of the traps to register for Sustainable Energy Ireland's grants scheme, so customers would have an "added incentive" to use B&G.
Despite those efforts, after a busy 2008, the firm entered more difficult waters in 2009 as the recession took hold. At the start of the year, B&G gave its staff a choice.
"We said that instead of laying off one or two lads we could cut pay across the board by 10pc," says Bernard. "They were all happy to do that, including the three of us as well."
A year on, B&G now operates with seven staff, its three founders acting as foremen on the various extensions and renovations the firm is working on. Prices are on the floor -- Richard says jobs are now being done for 40pc of what they would have cost 18 months ago -- but he's hopeful they only have another "5 or 10pc" to go before they bottom out.
Demand, meanwhile, is showing signs of picking up based on the volume of new contracts B&G is now tendering for. "We never thought of shutting down, stick to what you know," says Bernard. "We've always thought that if we just stayed positive we'd ride it out and adjust to the times."