Business as Unusual?
Seed Fund mentors share their tips on how to manage small businesses in these uncertain times
With an ever changing landscape, so much uncertainty, and far-reaching implications across the globe, we turned to some of our key Seed Fund industry mentors and asked their best advice for small businesses at such a challenging time. From financial considerations – such as lack of available finance and stripping back outgoings, to dealing with the unknown, looking after our emotional wellbeing and keeping team morale high.
The trouble with finance:
Scott Simpkin, Senior Campaigns Associate at Seedrs, says the two biggest financial issues founders of small businesses are likely to face through the Covid-19 outbreak and associated economic downturn, will be cashflow and a lack of available finance. He says, “Businesses tend to allay cashflow concerns by raising finance, and whilst it’s too early to see the true effect on the industry, it will certainly be harder to raise debt or equity without being able to meet anyone! Raising debt might be a particular struggle, as banks may not operate the same level of activity and may have more stringent measures to prove the business is capable of riding this wave of uncertainty.”
He continues, “If you run at a low burn-rate and are at pre-seed stage, ride this out. You have agility other businesses don’t have – fewer employees, lower costs. Make use of that, it may help you in the long term. If you need cash to get through, raise a small bridging amount of equity finance from people you already know (existing investors, friends and family). Take advantage of investment mechanisms like Advanced Subscription Agreements that avoid putting a valuation on the investment at this difficult time. It will likely benefit founders and investors alike in the future. Digital investment platforms that allow you to do this all remotely could be useful. If you need help, reach out!”
Justine Moldenhauer, Head of Funding at Young Foodies adds, “Know how much runway you have, cash is king. Have an open and ongoing dialogue with existing investors. Existing investors will be best placed to help you at short notice if the circumstances require. Take strategic decisions to reduce expenses as early as possible. Be pragmatic. Businesses will fail if they don’t have enough cash, not if founders have to give away too much equity.”
Accentuate the positives:
It’s easy to get drawn in to the spiral of doom and gloom, but keeping an optimistic eye on what’s happening now and in the future will help businesses and teams pull through these challenging times.
“Be Positive with the Positives” is the simple mantra that Guy Tullberg, owner of Tracklements is sharing with his staff. “Put all your “spare” effort into those things that will have a positive effect on your business. Don’t dwell on the negatives – it’s a waste of energy and time. Try to be that bit better, in everything that you do, every moment of every day.”
Camilla Barnard, founder of Rude Health agrees. “As entrepreneurs we are all risk-takers. But as humans we are still deeply uncomfortable with uncertainty. The difference is that you can measure risk, and the outcomes of taking risks.” She believes it’s why so many are stockpiling – trying to create some kind of certainty where there is none, even if it makes no actual sense. “The important thing is to look at what we can do. Because this is certain. Keep doing things. We need focus and rhythm in our days, and to communicate, we aren’t used to being home alone (or with our families 24/7).”
She adds, “As a business we are shrinking our horizons to the short-term, looking only at what we can do, and communicating with each other like crazy. This way we aim to be ready to act when things change. And where we can we are creating certainty.”
According to Renée Elliott, Founder of Planet Organic and Co-Founder of Beluga Bean, this is an opportunity to come out the other side of this experience better: stronger, clearer and more aligned to the vision of your life, personally and professionally. “As the world and your life face change, you have the unusual chance to regroup, re-think and re-vision your life. Entrepreneurs are, after all, change makers. She poses the question, “how can you use this time?”
“You could write down what you would like to achieve, because setting goals is powerful. Here’s what I’m planning: start a zoom book-club, do ballet on-line, plant my vegetable patch, start writing that book, clear the house, make those recipes, play board games with my kids, go on family bike rides. I’m also considering who I’d like to stay close to through this time as it’s a chance to deepen relationships with this shared experience. My women’s group of 30 years had a zoom supper last night.”
From a business perspective Renée believes it’s a time to re-strategise. “What could you do with your business through this time? How can you keep momentum and push it forward? What could you do to put yourself in a good position as we journey through these months and come out on the other side? Again, what have you not had time to do while fire-fighting and rushing around that would benefit from your time, thought and attention now?”
“Sometimes we don’t stop long enough to address the big issues. Now is your chance. What have you been putting off thinking about, doing or changing?”
Alex Ririe, Director at The Collaborators also believes that thinking ahead beyond the crisis is an important consideration now. “When times are tough it’s natural to want to go into defensive mode, but reports like BrandZ Top 100 Most Valuable Global Brands show that companies with strong brands that stand for something will always ride the storm better than weaker product-led businesses; they lose less value and recover quicker as conditions improve.”
She continues, “The implications for small businesses and brands is that despite the difficulties, try to prioritise activities that reinforce your brand’s long-term worth to consumers. It will stand you in good stead on the other side. We’re seeing examples of companies adapting quickly to circumstances. Yes, some are opportunistic, but brands like Pret are building equity too. With its ethos to ‘Do the right thing’ its recent announcement that it will give NHS staff free hot drinks and 50% off food exemplifies its brand values. Think about simple, cost effective ways to reinforce your brand purpose and build future goodwill.”
With increased levels of anxiety, how can we keep perspective and a level of calm in such a worrying time?
Sam Wigan, Executive High Performance Coach and Co-Founder of Beluga Bean says, “Understandably, many people are feeling deeply anxious right now. For some, there may even be a high level of concern about survival, whether physically or economically. It may be helpful to consider what you can do to restore your sense of confidence that you can face whatever is ahead, on all levels, both as an individual and as a business owner.”
He continues, “At Beluga Bean we talk about your ‘Six Spheres of Wellbeing’. These are Physical, Occupational, Psychological, Economic, Social and Spiritual wellbeing. It’s likely that current events have shaken you in at least one of these areas. Ask the question “what’s present for me right now?”. If you notice that you’re feeling anxiety, notice what’s causing that. Is it that your revenues have stopped, or that you have an elderly parent, or are you worried about your own physical health?
As you become aware of what’s most present, consciously take a deep breath… and let go. As you relax your system you will find that you have greater awareness and capacity to address what is present, rather than being run by it.”
The new ‘virtual’ reality:
Our work lives have changed overnight beyond recognition. Now that we’re all working from home, how do we maintain unity, productivity and ignite that all-important creative spark? Jayne Noblet, founder of The Collaborators and The Seed Fund believes there are a few key things to keep in mind when managing a team that’s remote working.
“Keep in touch…regularly. It’s better to over-communicate than have team members unclear of what they’re doing or what’s happening in the business. It can be a lonely experience working from home, so it’s great to have regular virtual get-togethers and updates. We’re using a variety of different platforms for different things, from company-wide daily Zoom updates to WhatsApp messages, FaceTime or good old fashioned email.”
Jayne thinks it’s important to set clear goals and deliverables. She says, “Make sure everyone knows what’s expected of them and their role. Be explicit about deadlines and key stages.”
Jayne also believes it’s not just about the work. “Build community spirit. It’s easy to keep everything work-focused when you’re not all together, but make sure you put some effort into keeping the social contact that builds morale. At The Collaborators we’re all missing our lunch-time card games, so we’re looking for virtual versions to play together instead, and we still have our meme-tastic WhatsApp group. I’ve also seen other companies setting up a daily online quiz. It’s all important stuff to help keep your teams going.”
The Seed Fund, founded by The Collaborators and supported by The Guild of Fine Food, is a philanthropic business mentoring programme that helps support ambitious, up and coming food and drink businesses that have been trading for less than four years and have an annual turnover of less than £1m. Last week, in light of Covid-19 developments, it became clear that this year’s programme would need to be cancelled. Instead, over the coming months, we’ll be finding new and different ways to support young food and drink businesses.
For on-going connection, support and inspiration, Beluga Bean will be holding its usual in-person breakfast meetings on-line and free of charge from now through to July.
Join them for a facilitated conversation about resilience and how to prepare for what’s ahead in these uncertain times. It will be helpful if you:
- wonder how your company will operate in the coming months and want to talk strategy
- want to maintain a positive inner state
- need to improve time management and productivity
- plan to stay extra healthy in the coming months and could use some tips
- value support, connection and positive momentum in your month
Thursday, 26 March, 8:30 -10:00am online.
Email email@example.com to register.