As we all worry about the impact of the novel Coronavirus (Covid-19) on our daily lives, Maven Group spent a good part of the week speaking with various leaders of the elevator industry across the United States about how they deal with this challenging situation. We hope some readers take comfort in the fact that their peers work on similar issues and maybe some of the information shared below will help small business owners to better cope with this new environment.
The National Association of Elevator Contractors (NAEC) reacted quickly and cancelled their annual Spring Conference scheduled for late April in Charleston, SC.
The US Small Business Administration (SBA) is working on offering low-interest disaster loans in yet to be designated states and territories. The loans are designed to help owners of small businesses affected by the crisis to pay fix debts, payroll, accounts payable etc. More details can be found at www.sba.gov. OSHA also provided support by issuing an alert as well as a guidance document on Covid-19 which can be reviewed by clicking on the links, additional info is available at www.osha.gov .
In terms of real world industry updates, the owner of an independent provider of maintenance and repair services on the West Coast commented “We started to check in with our mechanics every morning before they leave their homes to see how they are feeling. If there is any indication of them being sick we send them home and encourage them to get tested right away. But we still believe we owe our customers regular maintenance and, if needed, repair work. Especially in tough times like these we want to help our clients wherever we can.”
The president of a large component manufacturer highlighted how his team reinforced special training on work place hygiene. Many practices that have become standard on the manufacturing floor were implemented in the office where employees now wipe down their desks every evening.
A residential company in the Southeast shared that customers who traditionally paid by check at the end of a visit in their home are now paying by credit card via a phone call to the office. Furtermore, the company now calls all customers the day beofre a scheduled visit to confirm that the home owner is comfortable with a service visit by a technician.
An independent company focused on new installations established a 6 day work week with 4 day/10 hour shifts and slightly staggered start times for each employee to reduce their exposure to each other when they come to the shop. Their CFO spoke with two banks about preemptively establishing a line of credit against temporary cashflow concerns even though the current cash position is still strong.
The owner of a service company in the Midwest discussed his decision to cancel the annual social event most anticipated by his team: “Our St. Patrick’s Day Party is always a great opportunity to get the field force and the office together. But everyone agreed to cancel our long-standing tradition this year. Safety and health are our first priorities and we hope to host a barbecue on Memorial Day weekend instead.”
The outlook for modernization projects seems to vary from project to project. A company in the Northeast commented, “One of our clients delayed a mod project in a larger housing complex by a few weeks because they want all units to be in service just in case of a larger outbreak. Many tenants are retirees and the landlord doesn’t want to put any additional stress on the community if an elevator is down.” At the same time, the president of an elevator company in the South shared a different approach: “The owner of a commercial / retail building asked us to accelerate the modernization of 2 elevator banks and various escalators as he foresees a reduction in traffic throughout his building in the upcoming weeks. We will work on a faster schedule hoping that all material can get shipped quickly. We certainly like the idea of keeping our teams working – as long as everyone is healthy and well.”
Given Maven Group’s focus on mergers and acquisitions, we also interacted with senior leaders of “major” international elevator companies. While our partners acknowledge that the current environment puts them in uncharted territory, large buyers don’t seem to foresee much of an impact on their transaction strategy in the long term. Some pending deals might get delayed by a few weeks, but the fundamentals did not change as buyers confirmed that they remain interested in acquiring businesses that can help them grow their own footprint.
Maven Group also spoke with various top managers of private equity firms who have taken an increased interest in the elevator space over the past 18 months. One investor summarized a position shared by most of his peers: “We are well funded and don’t see our activity slowing down dramatically. If anything, this situation shows how attractive the elevator industry continues to be thanks to the core model of code required recurring maintenance and a constant demand for repair and modernization on aging equipment.”
We at Maven Group encourage everyone to follow the recommendations issued by local, state and federal officials in order to keep us all healthy and to move beyond these challenging times quickly. Stay safe!
President Maven Group, LLC
(561) 225-3320, firstname.lastname@example.org