Our April Masterclass was a panel discussion headed “A Year on the from the first lockdown”. I think a better heading would have been “How did you cope with Lockdown”, but one clear message from all 3 panellists was ‘Diversify or die’. The panel was Entrepreneur in Residence Rana Harvey of the Monster Group and 2 members Gez Walsh from Innergy and Dean Towers from BCS Electrics. The event was chaired by Caroline Broad from our Partner Clarion Solicitors.
Rana Harvey – I didn’t appreciate what a good life I had before Covid struck. We had a head office in York and distribution centres in York and the Netherlands. I thought the systems were great and I was working on strategy for growth and not doing much day to day stuff.
Gez Walsh – In April 2019 Calor Gas terminated our contract, they notified us on a Friday and turned up to take all their supplies etc away on Monday morning. Before that we had been coasting along. By Covid in March 2020 we had been competing with Calor Gas and in litigation with them.
Dean Towers – Before Covid I was “on it” 24/7- a control freak. When Covid hit I didn’t know what to do so I walked away for a couple days, planned a lot, let others run parts and find other routes to income.
Arrival of Covid
Gez Walsh – The resilience of my management team was key. We had done 5 acquisitions in the 2 years before Covid, so they were used to change. They reacted quickly to Covid especially on internal comms.
Rana Harvey – Convened a round table of managers; big slump coming, wanted big ideas, feared loss of sales, very challenging time. Within 24 hrs everyone was working from home. But in the first week in April our sales started climbing. We realised our technology was rubbish. We were lucky, as everyone had more disposable income, so started buying garden furniture. We ordered 3 times as much as the previous year. Sales started to climb, but so were complaints, getting 800 per day, up from 250 per day. What to do; the processes were poor and we had to employ more people.
Gez Walsh – We’ve been diversifying away from Calor Gas; selling to different customers eg gas for pubs and restaurants in beer pumps, fuel forecourts with gas, charcoal and logs. Told our restaurant customers that we wouldn’t charge them for renting our equipment during Covid, it’s costing us £7-8k pm, but we’ve signed up another 30-40 pubs/restaurants because we’re not charging for the rent of the cylinders.
Dean Towers – Our 2 main customers Yorkshire Fire and LGI etc remained open so the team of 5 remained working. Those on furlough we topped them up to 100% and stayed in contact. Some mental health issues, so focused a lot more in this area. Gave out bonuses – new kit, money, whatever they wanted (within a limit).
Rana – We thought our automation was great, but it was terrible eg 20 minutes too slow eg 220 rattan furniture orders we couldn’t fulfill. We recruited more people in the Philippines, 8 there is the same cost as 1 in the UK. I’m more proactive. Done 7 different Open University courses, including the Oxford University AI programme, probably the most challenging thing I’ve ever studied, now know how AI works and using it. We’re upping our technology to the next level. The stress levels in the team have been very high. My thought, my business is rubbish, we can’t handle many orders at the same time.
Gez – We thought we were good at measuring everything; During Covid we started daily reports instead of monthly and found a massive uplift for charcoal, so ordered 4x quantity and (new) hand sanitizers. Diversification has long been a philosophy, asked customers what they needed, answer hand sanitizers, so we supplied massive quantities. But it was Alvero based and much returned which we sold to commercial customers.
Dean – Worked out how much we spent on security subcontractors and decided to do it ourselves, and started a new company BCS Security. And 2 other new projects in the pipeline.
Rana – Cash is the top priority, 40% of our sales are from Amazon, so we’re looking at launching our own marketplace in November and a much larger warehouse in Holland. Shipping costs went through the roof so routed most through Holland and saved £8k per shipment.
Gez – Now more cautious with cash. We have benefited from splitting from Calor Gas, now pay in 66 days and get paid in 42 days. Share everything with the management team; confidence has grown new depots in York and Manchester, 4 new trucks.
Dean – 2 new businesses to launch, renewables are going to be big. Home security, soon we won’t have keys. AI is great for security.