Small businesses say they’ve really had to adapt to make it through the pandemic – but remain positive for the future.
According to a survey of 200 leaders of small businesses in North London, around a quarter have already seen their revenues surpass pre-coronavirus levels.
And 17% have actually seen their company grow as a result of Covid-19 – with a small number by more than a third.
This is despite the chancellor’s furlough scheme, or job retention scheme, coming to an end today.
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Some small firms spoke exclusively to Metro.co.uk about how they survived the pandemic, and what the future could look like in the presence of a second wave, financial problems and Brexit.
Zaffrin O’Sullivan, founder of skincare company Five Dot Botanics, said: ‘It was initially a bumpy time during the first lockdown because we experienced fall out from the restrictions – like cancelling planned beauty events and in-store product demonstrations.’
The 42-year-old explained how because her natural skincare brand normally offers holistic facial massages at events, which is a high contact activity and was banned until the summer, the company had to ‘rethink strategy and adapt quickly’.
As a result she said the company pivoted to product sampling and skincare treatments all from home, and introduced a 30-day satisfaction guarantee so new customers aren’t afraid to try products.
Louisa Ziane, co-founder of brewery Toast Ale, agreed with Zaffrin that her small business saw challenges to begin with.
‘Like most breweries, we’ve been severely impacted by Covid-19,’ said the 43-year-old.
‘Restaurants, pubs and events brought in approximately 65% of our revenue before lockdown, and those customers have themselves been heavily affected as they were forced to close and reduce capacity.
‘But we have an incredibly supportive community of beer lovers who’ve supported us by buying beer online, and we’re fortunate to be stocked nationally in Waitrose, Co-op and Ocado.
‘The team is doing well and we’re still feeling positive about the future of the business.’
Fear of the second wave
Despite the positivity, entrepreneurs are still concerned about a second wave of coronavirus, with just over half (53%) of those surveyed saying it is one of their top three concerns. And with infection rates soaring, it is a legitimate worry.
And that’s because many of them are concerned about their company’s survival, with more than half (56%) believing it’s somewhat unlikely, or even certain, that their business will not survive.
‘The biggest struggle through this is the uncertainty,’ Louisa explained.
‘We’ve tried to ensure we’re flexible so that we can adapt – being ready for trade opening up or suddenly closing – but brewing and packing beer takes time.
‘It’s very difficult to manage the operations of the business when we’re planning week by week, particularly from a cash flow perspective.’
The end of the furlough scheme
In the event of a local lockdown in London, 43% of entrepreneurs say they would need more grants, and 35% require support with employee salaries. Other support firms claim they need include a freeze in business rates, a reduction in corporation tax and more loan offers.
With furlough being replaced with the less generous Job Support Scheme just as London teeters on the verge of a ‘very high’ tier three lockdown.
Louisa said: ‘We’ve seen the devastating impact on our suppliers – for example, our original bread supplier sadly went into administration – and customers, and without financial help for those businesses, the ripple effect will hit us too.’
She added the furlough scheme was ‘vital to our ability to support employees’ due to the closure of the hospitality industry, and a council grant helped Toast Ale remain ‘ok as a small and agile business’.
Zaffrin, who runs Five Dot Botanics mostly online, said she didn’t need to take advantage of the furlough scheme or any grants, but ‘as a small business had access to what we needed’.
‘The bounce back loans were very helpful,’ she added.
‘The big concern for us is the macro economic impact of the pandemic and on society as a whole.’
But if London – or the whole country – goes back into stricter lockdown, businesses seem more prepared for working from home than they did the first time. In fact, just over two-thirds of companies (67%) say working from home had slight or no impact on their business.
Zaffrin added: ‘We are a digital first business and always sold our range online, so we were well placed to meet online demand as consumer behaviours changed.’
But one challenge she didn’t anticipate was ‘home schooling and being at home with three children’ while having to run her company at the same time.
Worry about Brexit
Aside from the pandemic, winter coming up means Brexit is looming on the horizon at the start of 2021 – and the impact of it is a top concern to around a third (30%) of leaders.
The majority of owners think another lockdown will have more of a negative effect on business than Brexit, but of course, they have had much more time to prepare for leaving the European Union.
However, Louisa warns: ‘The food industry is expected to be particularly challenged with access to, and increased cost, of food supplies and workers.’
But she said Toast Ale has managed to turn a lot of negatives into positives in recent months – including collaborations with larger companies, taking action to reduce impact on the environment, and speaking to customers more.
‘Selling directly to our customers means we have a direct relationship with the people drinking our beer,’ she said.
‘Their feedback has helped us to fix problems and improve our offering, and their kind words have been a big source of motivation.’
The survey of small firms in north London was carried out by web hosting company GoDaddy, which is holding a free ‘back to business virtual roadshow’ on Tuesday to help to provide inspiration, support and new connections for entrepreneurs to draw on over the coming months.
Sakshi Anand, GoDaddy’s senior director for UK and Ireland, said: ‘Times are challenging for all of us at the moment, and there is increasing uncertainty about what the winter will hold.
‘But it’s encouraging to see north London has been holding its own as a real hub for entrepreneurship.
‘As the capital comes under stricter coronavirus restrictions, many small businesses will be understandably concerned about the impact this will have on their livelihoods.
‘I’m positive the resilience and innovation many have shown so far will see us through potential further restrictions. Our polling shows that we need to listen to small business owners and understand the support they require to continue to deliver for their communities.’
Get in touch with our news team by emailing us at webnews@metro.co.uk.
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source https://metro.co.uk/2020/10/31/small-business-owners-remain-positive-despite-end-of-furlough-scheme-13500957/