L&C Enterprises-USA: 4 Barriers Threatening Fencing Companies

4 Barriers Threatening the Profitability
and Survival of Fencing Companies

What inefficiencies are preventing companies
from reaching their full potential?

Barrier #1
Competition is fierce …and growing!

Source: Fence & Swimming Pool Contractors in the US, IBISWorld, March 2011

© L&C Enterprises-USA - 2012 2

Barrier #1

• IBIS World indicates that
competition is high and
predicts that this trend will
continue to increase



Barrier #1

• This is partly due to the ease
of entry into the fencing
market



Barrier #1

• This is partly due to the ease
of entry into the fencing
market
• Due to little variation in
products, winning contracts
is primarily based on price



Barrier #2
Finding and retaining qualified employees

Source: The Skilled Labor Shortage in the U.S., Lowe's Commercial Services, November 2010


Barrier #2
• Current trends show that few young people have interest in entering the
challenging field of construction



Barrier #2
• More than 40% of construction workers are baby boomers



Barrier #2
• This group is rapidly reaching retirement without anyone to replace them



Barrier #2
• This group is rapidly reaching retirement without anyone to replace them
• For every 4 workers that retire, only 1 takes their place



Barrier #3
Medical costs and lost-time accidents

Sources: Workers' Comp Injury Data & Statistics, Washington State Dept. of Labor and Industries, 2011; National Safety Council, Safety & Health Programs: Reducing
Injuries and Costs on Capitol Hill, 10/6/2009; Advancing the Competitiveness and Efficiency of the U.S. Construction Industry, National Academy of Sciences, 2010


Barrier #3

• 26% of disabling workplace injuries are due
to overexertion



Barrier #3

to overexertion

• Construction workers experience 76% more days
away from work due to injuries than workers in
any other industry



Barrier #3

to overexertion

any other industry

• A 2010 report showed the average medical claim
for an injury among fence erectors
was $10,647



Barrier #3

to overexertion

any other industry

• A 2010 report showed the average medical claim
for an injury among fence erectors
was $10,647

• According to the National Safety Council, each
lost-time injury costs approximately $43,000


Barrier #4
Inefficient processes

Source: National Research Council, “Advancing the Competitiveness and Efficiency of the U.S. Construction industry,” 2009


Barrier #4

• One study calculates losses within
the construction industry to be
25-50% due to inefficiencies in
coordinating labor and managing,
moving, and installing materials



Barrier #4

• Resulting in financial losses of $15.6
billion annually



Barrier #4

• Resulting in financial losses of $15.6
billion annually
• With an additional $4-12 billion to
resolve resulting claims and disputes



The result of these challenges…



• Due to current economic
conditions, many businesses are
turning to cost-cutting measures
as a means of survival



• Cutting costs may be a
temporary fix, but businesses
cannot sustain themselves long-
term by repeatedly scaling back



• Cutting costs may be a
temporary fix, but businesses
cannot sustain themselves long-
term by repeatedly scaling back
• Let’s consider some strategies to
control costs and actually
increase business


Step #1: Improve workmanship




• In an industry where pricing
is the primary point of
competition, a reputation
for quality can set you apart
from the rest




• In an industry where pricing
is the primary point of
competition, a reputation
for quality can set you apart
from the rest

• Producing quality work
means not using sub-
standard materials or
cutting corners to save costs



❶ Increase productivity



• Consider the impact a simple
choice of using preformed ties



• Standard hook ties (which are
commonly used) can be
troublesome to install and can be
sprung when pressure is applied



• Preformed twist ties are quicker
and easier to install and hold up
much better



• Preformed twist ties are quicker
and easier to install and hold up
much better
• The right choice of tie can
improve both the process and
the end product


❷ Reduce injury-related expenses



• Investment in equipment
which promotes efficiency
often pays for itself many
times over



times over
• For example, usage of an
automated post puller
– Reduces the manpower
needed



times over
needed
– Reduces exposure



times over
needed
– Reduces exposure
– Decreases risk of injuries


Step #2: Improve timeliness

• A fence dispensing machine which
can dispense large amounts of fabric
very quickly, effectively doubles
output with half of the labor


Step #2: Improve timeliness

• A fence dispensing machine which
can dispense large amounts of fabric
very quickly, effectively doubles
output with half of the labor

• This boosts the efficiency of the
project significantly which translates
into higher profits


Step #3: Build relationships of trust

Source: The Speed of Trust, by Stephen M.R. Covey, 2008



• Are they • Do they “walk • Are they an • Can they
dedicated to their talk” expert in their demonstrate
Intent

Capability
Integrity

Results
helping their consistently? field? value in their
clients products or
succeed? • Are they • Do they have services?
committed to practical • Are there
quality and do experience others who are
they stand and successfully
behind their knowledge? using their
products and products or
their word? services?
• Can you
contact those
clients and
evaluate the
results?



Intent

Capability
Integrity

Results
clients products or
• Can you
contact those
clients and
evaluate the
results?


Summary

Increased Increased
Reduced safety Increased Speed
• Improved efficiency and labor costs Productivity
productivity stand to
open doors of
opportunity for small
EFFICIENCY PIPELINE
companies desiring
to grow

Increased
Profits



Summary

Increased Increased
Reduced safety Increased Speed
• Improved efficiency and labor costs Productivity
productivity stand to
open doors of
opportunity for small
EFFICIENCY PIPELINE
companies desiring
to grow
• An investment in equipment which increases
Increased
efficiency will ultimately result in increased profits
Profits



For more on this report, contact us today!


L&C Enterprises-USA: 4 Barriers Threatening Fencing Companies

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