11 minute read
REFOCUSING BUSINESS
Agile thinking
Th e last few months have caused many small fi rms to re-evaluate their business models and in some cases fundamentally change their proposition. Peter Crush outlines why a little introspection may not be a bad thing
HEN LOCKDOWN FIRST Under scrutiny
Whit, few fi rms were more To say Dines needed a complete suddenly decimated U-turn in its approach is an than those in the eating understatement, but according to and drinking sector. And recent research by software developer for start-up Dines, the app-based Capterra, Covid-19 has exposed many business whose entire premise is SMEs to the fragility of their existing allowing restaurants to off er its models. It fi nds a third of SMEs didn’t customers demand-based pricing and have a business continuity plan before discounts, it was literally business as the pandemic, but already 76 per cent usual one day, nothing the next. have had to change their off ering to
“We were doing well,” recalls founder some degree, with 51 per cent saying Dil Hussain. “We had a few hundred they needed new investment to do so. clients but overnight our USP vanished. Th is is despite many not knowing Even as eateries began to open, we if they are likely to survive – data by could see that our business model Bizdaq suggests 363,000 SMEs will would still struggle because cease trading in the the last thing reducedcapacity restaurants want is discounting – something that would erode their 76% next fi ve years, while the Offi ce for National Statistics predicts 529,000 SME sector already perilous margins even further.” Th e proportion jobs could go in the next 12 months. ‘Adapt
Left with no choice, of fi rms that or die’ has been the Mr Hussain was forced to completely refocus his approach to market by have had to change their motto of big business for years, but right now it’s a phrase that rebuilding his entire off ering couldn’t be more business model – creating a new in some way apt for SMEs. “Th e strong pre-Covid online off ering economy has defi nitely within weeks. It included caused complacency,” everything from menus argues Ian Cooper, with on-table ordering that customers former Visiting Professor at Henley could use from their mobiles, to other Business School and author of Th e innovations such as food or drink Financial Times Guide To Business suggestions if particular combinations Development. He argues SMEs need of options were ordered. to get back to basics and assiduously
The latter could help restaurant assess the new normal and where owners boost average spent per their market is, or needs to be. “It’s head. “From helping clients vital businesses reconnect with their boost footfall, we’ve had to pivot to customers – to ask what they now being about helping clients create need from them, rather than wait to efficiencies,” he says. “Our new be contacted,” he says. “In business, message is we can help clients boost 60-70 per cent is word of mouth, but sales, but our table service ordering this doesn’t come about by accident.” facility also means restaurants can Mr Hussain believes now is a good save on wages, by not needing so time for businesses to think about the many waiting staff.” long-term, rather than just short-term
survival. “Th ey can no longer think about what their products or services were; they have to put themselves in the shoes of their customers and understand how they might now feel about buying a product or service,” he says.
Th is has certainly been the case for offi ce relocation fi rm Business Moves Group (BMG), which suddenly found its work ceased when no one was working in offi ces any more. “From enjoying an annual turnover of £15 million, work was suddenly being cancelled in March,” recalls Managing Director Rachel Houghton. “We had to totally bolt-on new services to survive: moving furniture to people’s homes (to facilitate working from home), doing workingfrom-home assessments and redesigning offi ces to allow for social distancing. But this is all stuff that will stay now.”
Th e key, she argues, is not being seen to suddenly fl og a new service. “Th e rebuilding has to be done through relationships, not transaction-based
interactions,” she says. “It’s listening to customers; understanding what their new issues are and how they can now be supported.”
Fortune presents itself to the proactive. At the height of the pandemic Ms Houghton says she took a call from NHS Scotland, asking if BMG could distribute medical equipment; she simply said yes. “We defi nitely wouldn’t rule out adding such non-core elements to the business now,” she admits. “We’ve always had to evolve our off ering
Making a killing
Founded in 2016, high-end bespoke event-planning company La Fête normally plans and organises three or four big-buck events per month – everything from lavish weddings to milestone birthday parties, baby showers, themed afternoon teas and more. But like all fi rms that rely on people coming together in-person, Covid-19 meant it was suddenly thrust into a parlous situation.
“This year was supposed to be our big year, but then the cancellations snowballed,” recalls founder Charlotte Ricard-Quesada. However, Ms Ricard-Quesada regularly networks, and a planned meeting with a fellow contact about ways to adapt soon turned into a separate business venture – The Digital Murder Mystery Co.
“At fi rst, I thought the idea of having a virtual murder mystery would be a much-needed source of income, but it’s now turning into its own permanent add-on,” she says. In just eight weeks, the whole concept – based on having diff erent murder themes – was created, designed and made available to customers.
Now the plan is to add more new themes every month, as well as to diversify into interactive children’s adventures. “We sold more than 50 packages in the fi rst fi ve weeks,” she says. “But best of all it’s given us an exciting new business opportunity. We’re even planning on taking the product to existing clients to develop bespoke murder mysteries featuring their own venues, as a way of helping hotels connect with booked customers that currently can’t stay with them.”
The new venture has also given the fi rm a chance to reach new markets. “Normally, our minimum big-event spend is £1,500, but this product gives us a pricing level to target those who want an experience costing less,” she says. “Crucially, this is a product that’s not only relevant to lockdown – it could have existed pre-coronavirus.”
And there’s one more thing too: she says she’s become much more business-savvy. “For La Fête I might have gone the extra mile out of passion, but it would cost me margin,” she says. “This new venture has forced me to be much more realistic and cost-driven, and to invest appropriately to make a return. It’s defi nitely improved my business acumen.”
as the world of work has changed, but this compressed period of rebuild has certainly pushed us into making decisions that we were already thinking about. We were considering diversifying into change management solutions anyway, and this has cemented the need to do this.”
Shifting focus Simon Owen, Managing Director of Manchester-based TV commercials fi rm Standby Productions, agrees. He took the decision to develop services that make more use of stillsphotography and B-roll footage rather than sending crews out taking bespoke fi lm footage. Again, this is likely to be a permanent service, thanks to clients backing the approach – including Cotton Traders, which ordered a new ‘ident’ done this way from the fi rm.
“Th e need to be determined and attack a new opportunity when the time is right can’t be underestimated,” he says. “I put most of my staff on furlough, but when I came to refocus the business, I actually found it was holding me back. Without my usual new business development person I was prevented from rebuilding, so I’ve now got this resource back and we’ve had seven to 10 new enquiries in just the past few weeks because of it.”
FSB’s own research, New Horizons: How small fi rms are navigating the Covid-19 crisis, fi nds that SMEs have been proactive during lockdown, with 16 per cent saying they’ve developed a new or enhanced online presence and 24 per cent saying they’ve adopted or increased their used of digital technology such as Zoom or Teams meetings. Meanwhile, 10 per cent have actually taken the opportunity to scan the horizon and diversifi ed into producing new services.
An off ering that many SMEs seem to have easily moved into is home delivery services – 19 per cent have done this, according to the FSB given confi dence is so important right research. Among those that have now. Th e short-term switch has helped spotted a new business opportunity, solidify our business and kept us in many – including gin-maker Th e Bond clients’ minds.” He also says it has opened Street Distillery – will be continuing it. doors to potential new business “We only opened in December 2019, so opportunities – for instance, to produce not being able to run our distillery tours other plastic-based medical supplies. and bar was a major setback,” says Just getting out there and showcasing distillery founder Sally Faulkner. yourself is a rebuilding strategy in its
“What we’ve done, though, is create own right, says Jack Izzard, founder of pre-made gin cocktail pouches that Rhizome PR. Faced with clients pulling people can order online, and during back on work, he decided to create Th e lockdown alone we sold more than Great British Bounce Back – a listings 3,000 of them. It seemed to us to be an platform small fi rms can join for free obvious alternative way to stay afl oat, (or pay £30 for a promoted listing). but we’ll defi nitely Journalists can search by keep this now. It’s a case of just rolling with the punches, ‘Th is whole experience has sector or region to fi nd and feature innovative SMEs to write about. and reacting.” been tough, but Done more out of Ms Faulkner is no stranger to adapting. During lockdown she it’s enabled me to focus my attention altruism than to build new clients, Mr Izzard says the site has temporarily used her on where our generated interviews distillery equipment to diversify into making hand sanitiser business needs to be for the future’ with small businesses on the BBC’s Today programme, as well as (alcohol being the key on ITV and in countless ingredient) when regional newspapers. there were huge “It’s vital that people in shortages. After negotiating with the the regions served by small fi rms know Treasury so that she would not have to they are doing new things,” he says. pay duty on ethanol if it was used in this “Since launching during lockdown way, she bought 1,000 litres and had a more than 500 have signed up, new mini-business on her hands. and about a dozen new SMEs are Embracing change Should all small fi rms take the chance According to Gary Smith, boss of they have now to refocus and rebuild? packaging fi rm Charpak – which “Absolutely,” says Ms Houghton. “Th is temporarily switched from making whole experience has been tough, but it’s plastic chocolate box inserts for the likes enabled me to focus my attention on of Hotel Chocolate, M&S and Sainsbury’s where our business needs to be for the to supplying PPE face masks – a future. Sure, it would have been easier if temporary change of focus can create we’d done this earlier, but often we do lasting business opportunities. just concentrate on the day-to-day. Now,
“By supplying our masks back to our though, I’ve got excitement and pride chocolate manufacturer suppliers, we’ve about where we go from here.” been able to demonstrate our ability to design and produce new products PETER CRUSH is a freelance business journalist quickly,” he says. “Th is has been great, signing up every day.”
