In the most unprecedented global crisis of our time, the hospitality industry suffered like never before. Restaurants and bars across the UK forced to work out how to keep their businesses afloat and pay their staff.
We asked Louise Palmer-Masterton, founder of Stem + Glory, how they managed to survive during Covid-19.
We closed our doors on 16th March before it became mandatory, following the Prime Minister recommending people ‘avoid bars and restaurants’. Sales had already tumbled and, with a number of staff falling into the vulnerable category, we knew it was the right thing to do. We also decided not to try delivery only at this time, not wanting to put our staff at risk.
Prior to this, we were absolutely flying as a brand. In mid-February, we had just returned from the Global Restaurant Investment Forum where we had won ’Most Investable Concept’, we had just agreed terms on a second site in London, and everything was going super well. We were seeing more than 130% year-on-year growth, were about to do a funding round, and the future looked extremely bright.
By the end of Feb, the writing was already on the wall. Sales had started to fall, and by early March it was clear where we were heading, as footfall sharply declined and everyone knew we would need to close soon. Nevertheless, it was a shock when it happened.
Those first few weeks we were asked a lot of questions by our team that we were just unable to answer, as we ourselves had no answers. When CBILS was first announced we were excited to hear of the lifeline, designed exactly for businesses like ours, and we were very prepared to apply. We had our application in literally as soon as applications were open. What followed then was an extremely stressful 3 weeks, whilst the bank dithered, and eventually declined our application. As a high growth start up the scheme is just not intended for us.
At the same time the retail grants were announced, but with one site over the threshold, and the other site with rent over the threshold, but annoyingly rateable value under the threshold, we ended up with a mere £10k grant across the entire business. £10k over a £1.2m turnover business really didn’t go very far!
During that three-week period that we were waiting for an answer from our bank came the chancellor’s announcement of the furlough scheme. This was a huge sigh of relief all round for us and especially all our staff.
Following the debacle of the CBILS scheme, the government then realised that almost all businesses didn’t fit the CBILS criteria, and the bounce back loan was announced. The pain didn’t stop there though, our bank had a technical malfunction on their website which meant that more than 50% of their customers had an error message when applying, and no-one at the bank had a clue what was going on. At this point we had had enough. We set up an account with one of the challenger banks, and within a week had a bounce back loan in our new bank account.
The furlough scheme turned out to be great. The HMRC system was easy to access, the application was smooth, and funds received in time. By the end of April. With some funds in the bank, and the first furlough payments to our employees, things started to look up. Without the uncertainty of the first 6 weeks, we started to plan the future with renewed energy.
We’d been planning our online marketplace and delivery portal for a while, but last year we were too busy to dedicate much time to it. During May and June we were able to fully focus on this. At the same time there was an absolute explosion of new technology for the food and beverage sector, so finally it was possible to integrate all our systems to create a seamless customer experience of online ordering, delivery, click and collect and also at table order and pay.
With our ambitions growing by the minute, we took on new partner, Afroditi Krassa, to do a complete branding and design overhaul, so that when we open again we could hit the ground running with all new tech, new look and feel, and completely notch up the brand to a whole new level.
We were fortunate to be awarded a post-Covid capital grant by Cambridge & Peterborough Combined Authority, so that combined with the landlord package meant we are able to move swiftly to occupation at the new site later this year.
The final piece of the jigsaw in our recovery was the Government Future Fund announcement. Finally, a scheme that fitted our business perfectly. Targeted towards high growth start ups, like ours, that had taken investment in the past 3 years, we were able to get an application in through Seedrs very swiftly. Our application was approved within 10 days. We are now live on Seedrs raising the match funds for that.
So all in all, those months were a heady mix of hits and misses. In the end, it has been time that has brought resolve to all the early stresses. Someone likened the government's schemes as like playing whack-a-mole. No sooner was one scheme announced, that another group was excluded.
I do believe the Chancellor did a good job, but there were a few things I think could have been managed better. Namely
1. Raising the rateable value for the retail grants and;
2. Loosening the criteria rules on CBILS so more businesses could get the support they needed.
We planned a cautious reopening in late July, while we continued to put energy into our online development.
We firmly believe that we emerged from this period even stronger as a brand, with new revenue streams, better deals, and better relationships all round. Whilst the Covid crisis was shocking, it’s gave time to pause, time to reflect on what’s important, and time to step off the train and get some valuable breathing and planning space.
ABOUT THE AUTHOR
Louise Palmer-Masterton is founder of multiple award-winning restaurants Stem + Glory; hip and trendy but accessible plant-based restaurants, serving delicious gourmet vegan food from locally sourced ingredients, 100% made on site. Stem + Glory also offers click-and-collect and local delivery in London and Cambridge.
Follow on Social Media:
Web: www.stemandglory.uk
Twitter: @stemandglory Facebook: https://www.facebook.com/stemandglory/ Instagram: @stemandglory
Linkedin: /louisepalmer-masterton