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Log on to the way of doing business


Last week's Sunday papers were, as usual, packed with stories and features predicting the imminent downfall of another clutch of companies.

Freeserve, Dixon's pioneering free portal and supplier of all things to the web, has become a takeover target, the online auctioneer has seen its value slashed by 40% and is struggling, and eBookers, the cut-price travel agent, is suffering a similar fate.

And predictions that, one of the UK's first and supposedly funkiest clothing e-tailers, could have the administrators in by the time you read this, are causing most concern in the sector. If Boo can't make it, they fear, who can?

From this, you may be tempted to conclude that traditional business is still best and what did any of these young upstarts know anyway. Then again, a bad company is a bad company. E-gloss can only disguise for so long.

But reading these articles also brought home the irony of just how similar the world's situation is to the construction industry's predicament.

Too many firms battling in disparate marketplaces all offering similar yet unremarkable products to demanding clients. Add to this the fairly universal poor customer service and inept marketing and business strategy and the similarities are scary.

The difference, of course, is that the e-commerce business world is developing about a hundred times faster than traditional businesses. Company life cycles are accelerated to bewildering speeds so that you can raise money, start up, trade and go broke within three months. In traditional business, this same cycle could take a couple of years. In construction it could take ten years.

So what? Well I reckon that construction firms could do worse than copying what the successful e-commerce firms do from now on. Not by launching some e-commerce product - unless of course you have a pretty robust business model - but simply analysing what they do to survive.

The chances are that this will not be anything particularly astounding, but will simply come down to good business sense. Have a good set of products that people want to buy, have a clever and robust strategy to sell these products at a profit and have a process in place to develop your product so that people continue to want to buy it.

Yet how many of the clutch of companies have such basic stuff worked out? But equally, how many of the construction industry's firms have it worked out?

If the construction industry is going to be able to deliver a decent product to a discerning client and make sufficient return to pay staff properly, then rationalisation must be around the corner. The e-commerce world will get there first so let's learn from the fall out there.

What defines the toughest in the jungle and what clever stuff do they do to survive? Chances are, even in this brave new internet world, it will just be the ones running their businesses the best and employing the quality staff.

Antony Oliver is deputy editor of NCE

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