Size or Stability? How to Choose a Repair and Maintenance Partner

With contracts that typically span ten years, choosing a housing maintenance partner is a big step. Customers want to be certain that contractors have the resources to deliver extensive repair and maintenance operations to housing stock. They also want confidence that their partner will still be around at the end of the contract term.

Until recently ‘bigger’ seemed the safest option. Confidence in this approach has taken a knock following the troubled fortunes of some of the major players. Business models that target high-volume contracts with wafer-thin margins look less and less like a route to stability.

Just reading the headlines it can start to look like there’s a crisis in the sector. And procurement that results in major contractors surviving on pre-tax margins of less than 3% isn’t sustainable.

At the other end of the scale, tightening budgets have led some towards using smaller local firms, with all of the detailed contract management headaches and risk this can bring. The fact that 780 small construction firms went into administration as a result of the Carilion collapse says something about the capacity of smaller firms to withstand financial shocks.

Financial Stability

Perhaps we have enough examples of the risks. Is there a more productive way forward?

When looking for a housing maintenance partner, size is important, up to a point. Any partner needs the financial resources to support a substantial team, invest in technology and service delivery, and cope with fluctuating cash flows. Once all those boxes are ticked, does even greater scale help reduce risks? Recent evidence suggests not.

Financial stability, with solid cash flows and profitability, are better indicators than total turnover. These data reveal those businesses with a sustainable business model that can remain committed to the contract right the way through.

Osborne Property Services is a family owned business with over 50 years of history and a solid balance sheet behind us. We’re big enough to manage multiple substantial maintenance and repair contracts and small enough for every new contract we win to be important.

Senior Account Manager, Osborne Property Services