Sector Spotlight No. 1: How mentors are helping business through and out of lockdown

Mentor Sophy Robinson reports on, and responds to, the current challenges faced by the retail, leisure and tourism sector, and checks with some of her colleague volunteer mentors to see how they are, and have been, supporting their mentees. (This article is the first in a related series of contributions by various authors).

A recent survey* of just over 1,000 businesses in Dorset makes for sobering reading. It reveals that 86% of the retail, tourism and leisure companies have been temporarily closed, with 6% of those closures being permanent.

However, 20% of them have already, or plan to, diversify their services and products, and the way that they deliver them to customers through online or home delivery services. This is the sort of approach that Dorset Business Mentors have been helping their mentees with.

Government support in the form of rate relief, business grants, loans and the staff furlough schemes have been a lifeline for many with 63% applying for support. Our mentors have been able to help signpost people towards the various schemes, and to produce accurate cash flow forecasts.  This provides a realistic context in which to make immediate and essential cost reduction, and to shape plans for a return to businesses opening again.

The business environment continues to be very challenging for the sector. Essential and outdoor retail outlets have already been allowed to open, but with very strict guidance on social distancing for staff and customers, protective screens, barriers and hygiene measures. 

For others: the so-called non-essential retailers, food service providers (pubs, cafes and hotels) and leisure facilities, July 4th is the target date for opening – and then in a phased way, with pilot re-openings. Our mentors have been helping their clients think through these challenges and plan for different scenarios.

There are many examples of food retailers in the county starting new, or growing existing, delivery services.  Some are busier than ever with increased demand for vegetable, flour, artisan bread and/or meat and other produce boxes. In some cases this complements the traditional shop retail channel, where deliveries can help mitigate the impact of social distancing and queuing on shop footfall and therefore sales levels. Our mentors can help retailers work out the logistics of how to make the new sales channels cost effective, looking at the value of the delivery vs. the additional staff and transport costs.

Some pubs, cafes and restaurants have also been entrepreneurial opening up take away and delivery services – even in rural areas with low population densities – some making use of combined local initiatives such as ls2u.co.uk.  The kitchens need changes to provide a safe environment, but then customers seem to be very happy to queue at an open window or door to pick up a delicious meal that they haven’t had to cook themselves.  Much of this comes down to customer loyalty based on the reputation of the pub or cafe, and quality of the meals. So marketing strategies are another area that our mentors have helped clients with.  For example a flour mill that supplies wholesale has pivoted so successfully that it has improved its sales overall.  

We’ve found that even though this may not restore the sales and profits of the hospitality business to pre-lockdown levels; with costs paired down to a minimum, it may be enough of a cash lifeline to keep them in business. One Italian restaurant is breaking even on 50% of normal turnover, with rent relief from the landlord, and front of house staff doing the deliveries.

The survey suggests that business survival is tenuous for the sector. 79% of respondents said they could keep going to the end of June 2020 with current restrictions in place, but this dropped to just 44% with no change until September. So the July 4th date is make or break for many, and helping our clients find new sources of income over the next few months is crucial.

Other mentees in the retail space have worked with us on product and channel diversification. A bespoke print designer and retailer has moved on-line from selling in Dorset and Hampshire markets, using Etsy and Amazon Handmade as new channels to market. With a business interruption loan secured, the company had the breathing space to develop new entry-level, non-bespoke prints. Together with Dorset Growth Hub, we’ve been able to provide social media, website and SEO expertise.

So, mentoring is proving invaluable to our clients for both survival strategies, and to those wanting to re-engineer their business models. In future ‘Insight’ articles we’ll focus on other examples of our support in Dorset’s all-important retail, leisure and tourism sector.

*Survey: Business West (April 2020)