Conference 2013: MKM's success lies in its staff, says David Kilburn

Published:  24 June, 2013

David Kilburn is chief executive of MKM Building Supplies. Now the UK's biggest independent merchant, MKM first began in 1995 and now has 39 branches stretching from Deal, in Kent, across the East Coast up to Scotland.

David Kilburn is chief executive of MKM Building Supplies. Now the UK's biggest independent merchant, MKM first began in 1995 and now has 39 branches stretching from Deal, in Kent, across the East Coast up to Scotland.

As a business, MKM stands out because its company's employees own equity and shares in the business, which Mr Kilburn said meant they "have a vested interest in ensuring that the business prospers. It's crucial to the growth of the business that people have a stake."

Many businesses - including builders' merchants - cut their workforce when the recession hit, some by up to 35%. While Mr Kilburn acknowledged that MKM did have to make some cost savings in this area, it was to a far lesser degree than most, as he said he felt that MKM had a duty to look after its staff as much as possible.

Mr Kilburn went on to highlight some of the issues that all independent merchant businesses currently face, such as cash flow, bad debts and the difference between the purchasing power available between the national and independent merchants.

"Still, we continue to expand when opportunities present themselves," he said. "In difficult times, people with vested interests in their businesses will always go the extra mile. I'm convinced that you have to incentivise to run a successful business."

The traditional route to becoming a merchant branch manager is to work your way up through the ranks, Mr Kilburn said. "At MKM, on top of the basic salary, branch managers also receive profit related dividends which significantly grow their earnings potential. It's amazing what business owners - MKM's branch directors - achieve when given this opportunity. They know that the more they put into the business, the more they'll get out of it."

On top of the dividends given to its branch managers, MKM also passes on at least 10% of its annual profits to its employees, and gives its branch managers a lot of freedom to make their own decisions.

The service MKM offers its customers is another thing that Mr Kilburn believes sets it apart from some of the competition, with golf days and race days for customers, and newly-built, modern branches in high-traffic locations to serve as constant advertising for the business. "Customers like consistency," he said, "seeing cheerful smiles and familiar faces when they come in."

Independent merchants face a real issue surrounding the price they pay for goods, he believes. "We're getting left behind the nationals, who are very effective at negotiating with the supply chain," he said. "The independent sector needs to think collaboratively. We need to buy like nationals, but think like an independent."

Mr Kilburn described MKM's business as a powerful, united army of entrepreneurs fighting for a common cause, and concluded by quoting MKM branch director Peter Russell who, when asked about running an MKM branch, said: "It's great to be given the independence to run your own branch. The harder you work, the greater the rewards for the whole team."



For a full report on this year's BMF All-Industry Conference, don't forget to read the July/August issue of Builders' Merchants News.

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