How we adjusted to coronavirus: Tips from a business owner

For many small businesses across the UK, the impact of coronavirus has resulted in a significant loss of trade and the revenue that goes with it. Adapting quickly to the new climate has been key to keeping their businesses on track. 

A good example of this is Fashionizer and its sister company Fashionizer Spa, a bespoke uniform manufacturer for the hotel and spa industries. With orders coming to a standstill, owner and Director Debbie Leon decided to switch to making face masks. We caught up with her to hear how she made the switch, why she took a Funding Circle CBILS loan to help and to get her tips on managing a business during the pandemic.

Adapting your business in the coronavirus pandemic

What did your business do before coronavirus?

Before coronavirus, Fashionizer designed and made bespoke uniforms for luxury hotels. Our sister company, Fashionizer Spa, specialised in crafting sustainable spa uniforms, which we’ve sold all over the world.

How has the coronavirus affected your business?

Coronavirus has had a major impact on our business. Our business turnover is down almost 95% for both companies. All of our clients in the hospitality and spa industries have been closed since mid-March, so we’ve not received new orders since then.

How have you adapted?

We adapted fairly quickly. Because we have clients across the world, we started losing business in Asia and through the Middle East first, so we saw it coming. Starting on the 16th March, we switched to making fabric face masks. We spent the first three weeks researching best practice, sourcing the correct filters and making the patterns and samples. We also had to set up a manufacturing supply chain in London that would be able to work during lockdown.

What was involved in making the switch?

Making the switch was incredibly challenging in some areas and easy in others. We already had a marketing infrastructure in place, and we had two online stores, through which we’d sell our uniforms. We had social media and ways of communicating what we were doing, along with manufacturing resources and fabrics in-house, so we were able to transition those resources to our new business strategy.

I would say the most difficult part was developing the face masks we were happy with and which conformed to the highest standards. Getting them made initially in London was quite a complicated exercise, because we wanted to make sure they were made in clean and safe environments. 

We’ve been lucky that we’ve been able to find a distributor in the US to sell our face masks, and that’s where most of our business is coming from at the moment. That was a relationship we’d built up previously, and once the American authorities announced they were recommending the wearing of face masks, this became a good potential for us.

How are you operating now?

We’re in our office, which already has a lot of space to implement social distancing guidelines, albeit with a reduced team. Two of my staff have been working through the lockdown, commuting by foot and by car. Everybody is using face masks in the office and we have the office cleaned thoroughly every day. Some of my staff are working from home part-time, and some are working in the office part-time. Everyone’s been very flexible and that’s enabled us to continue working.

How have you supported staff and customers?

All our efforts have been based on managing the risk to staff. When our staff were working from home, we controlled our own environment by hiring our own driver who’d come and collect manufactured goods from staff. We’ve also now started doing risk assessments for staff, based on their personal circumstances and journeys into work. We’ve introduced flexible working hours, so staff using public transport can do so outside of rush hour.

What’s been the biggest challenge throughout this period?

Finance has been a challenge. Even though the Government announced support for businesses quite early on, it’s not been easy to access and the banks have been slow in lending. 80% of our outstanding invoices haven’t been paid to date, though most of our suppliers have been patient and understanding. 

Getting consistent standards for our mask production was a challenge initially. Fortunately, after 4 weeks of producing with a variety of suppliers, we managed to get our usual production factory back on board, as we found that both the cost, and quality, weren’t always consistent enough.

Communication has also been a challenge. We now use Zoom for daily meetings and to keep each other in the loop about what we’re working on. 

Using a CBILS loan to fund your business

What do you plan on doing with your CBILS loan?

I’m using my CBILS loan to keep us going. I’ve applied for a loan that’s the value of all the outstanding invoices we had in March, which still haven’t been paid. It’s also being used to pay rent, pay some of our suppliers and is enabling us to move forward and keep going. 

Switching to a new product, there’s obviously a gap between producing the face masks and the costs that go into that, and making profit when you’ve sold them. The loan gives us the cash flow to bridge that gap and keep our business viable. 

Did you try to get funding elsewhere?

Yes — I initially applied through our bank, who we’ve had an account with for over 10 years. I applied for a CBILS loan through them on the 25th March, but had yet to hear any response by the 21st May, almost a full two months later. By that time, I’d already got a CBILS loan from Funding Circle. 

I have a Relationship Manager there but she couldn’t help. They were also asking for cash flow forecasts for the next 9 months, which in the current environment just isn’t feasible.

How was your Funding Circle experience?

Since I’d previously had a Funding Circle loan, I knew the service was fast and efficient, and I was delighted when I found out they were offering CBILS loans. I applied on the 1st May, we got a quick decision and had received the funds by the 13th May. 

The added bonus of having 12 months of no repayments means that we should finally start getting back on track, which is great.

What advice would you give to business owners considering funding?

Firstly, be clear about why you’re taking out a loan. Only do so if you believe it’ll enable you to continue trading profitably in the future, once the pandemic has passed. Secondly, consider whether you can afford to repay the loan if the business doesn’t return to 100% pre-coronavirus levels. And thirdly, plan how you want to use the funds — and be prudent about it.

Support from the business community

How has your community pulled together?

The spa community has been amazing, both internationally and nationally. For instance, there’s bi-weekly meeting that’s organised by the UK Spa Association with all of our suppliers. We exchange ideas and  update each other on progress, which has been great. Internationally, there’s been masterclasses, Zoom meetings and virtual events. I’ve met lots of people I didn’t know before.

What advice would you give to other businesses trying to adapt to coronavirus?

Think forward, be positive, focus on what you can do and not what you could’ve done if this hadn’t happened. Unfortunately, coronavirus will be here for some time to come and finding a way to operate around this is going to be a huge challenge for our industry. Look for solutions that can ensure you can keep going for a few months, until you can operate at full capacity again.

All information is correct at time of publishing. While we want to help as much as we can, the information and documents found here are provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here.

If you have any questions, please speak to your professional adviser or seek independent legal advice.