Sidonie Warren speaks to us from her spare bedroom, surrounded by neat stacks of notebooks, journals and greetings cards. If she looks like a stationery fanatic, it’s because she is.
Sidonie is the founder and CEO of Papersmiths, a small chain of stationery and bookstores in London, Brighton and Bristol. The spare room stash behind her on our video call is the stock she’s retrieved from her stores, before closing their doors in March.
Her lockdown story is one retailers up and down the country will recognise. A steady fall in February’s footfall, then a dramatic decline the following month, before total enforced closure on 24 March. Since then, she’s asked all 30 employees to accept furlough, applied for CBILS funding and set herself up at home to sell stock online. Definitely not hibernating, but definitely not business as usual.
At this point, the future of retail is uncertain but Sidonie is focusing on what she can control and is full of plans. Here’s why.
Watch our interview with Sidonie or read our takeaways further below.
The accelerated move to digital
Until lockdown, only five per cent of Papersmiths’ revenue came from online transactions. “We saw a 30 per cent uplift in the first week” said Sidonie “and now it’s growing at a steady five per cent each week. That’s giving me the chance to grow my marketing skills, find out what’s working and what’s not. Physical retail isn’t going to see much growth for the next 12 months so I’m spending my time and energy on extending our online offering.”
Combining bricks and clicks
If you’re familiar with any of Papersmiths stores, you’ll know what a feast for the eyes they are. Pencils, pens, cards, journals and books are presented in pleasingly arranged in colour blocks. “We won’t create new stores but we will keep the five we have. They’re special spaces customers like to get lost in. The staff are experts and our products are something people always want to pick up and touch and try. But I’m excited about the online focus as an opportunity.” Luckily, staff have been signing up customers in store for the past year so she has an email list to work with now.
Small tweaks not giant leaps
It’s not one of the grand pivots we’ve seen from some business owners looking for brand new revenue streams since coronavirus took the rug out from under them. The Papersmiths pivot is a steady series of small tweaks. Instagram and email marketing have been working so well she’s had a challenge to keep up with order fulfilment – a nice problem to have perhaps. She’s making tweaks to the ecommerce website too to reflect emerging customer needs under lockdown with a range of working from home products, self-development and journaling products. She’s also made her newsletter more about giving people useful content. “There’s so much more I want to do, SEO, Google Shopping, expand the inventory, get more depth of stock so we don’t sell out of things so fast.”
A big balancing act
The wisdom that comes with six years’ experience of running a business helps Sidonie manage her ambition carefully. “It’s a massive balancing act at the moment. My marketing activity guarantees traffic to the website so I’ve had to balance my time between marketing and fulfilment, and keeping an eye on all the cash flow and the loan applications too. I’m really keen to avoid being burned out by the time we open our doors again. It’s quite compelling to know that those extra levers are there, but I’m just reminding myself that I can’t do them all at once.”
Pulling all the cost levers
All Sidonie’s efforts to keep cash in the business are done with staff and small suppliers in mind. “Every day I’m trying to trade to get cash to pay our suppliers but salaries are prioritised. She’s also pulled every cost lever possible in terms of negotiating with suppliers and landlords, asking for payment holidays and extensions, returning stock for credit notes. “We’ve applied for government cash grants for retail businesses, VAT and PAYE deferrals, but we still require the Coronavirus Business Interruption Loan Scheme to survive. We work with a lot of small suppliers who depend on us and I really want to be able to pay them.”
The cash flow skills that paid off
One thing that has stood Papersmiths in good stead since lockdown is a firm grip on the numbers in the business. Even before lockdown, Sidonie already had a closedown plan because she knew the exact point at which it would actually cost more to stay open. “Managing cash flow is the best thing I’ve learned as a business owner. What I do hasn’t changed much since the crisis landed though there’s new maths to do every day. We always do 12-month forecast with our accountant and a three-month rolling update with bank transactions each week, using Xero and an aged payables report to schedule supplier payments. This process also helps me decide when and what to juggle or hold back on spending. In fact, cash flow has helped me break through my fear about not having enough money to do things in the business.”
Use our coronavirus cash flow crib sheet to smarten up how you monitor your company’s cash situation.
The opportunity to wind back the clock
Single-handedly running Papersmiths from her spare room has taken Sidonie back to the early days of building her business. “It’s just me. I’m doing everything, accounts, order fulfilment, marketing, loan applications. There’s no extra budget, no extra resource. It feels like we’ve shrunk right back down.“ While Sidonie isn’t exactly celebrating the reduction in operations there’s something positive to find in her situation. Like a lot of small business owners, Sidonie has been thrown back on her personal resources, doing jobs she’s not done for several years, picking up new skills, reviving old ones. And if you’ve ever bootstrapped a business, you’ll remember doing things on a shoestring, from the spare room or kitchen table.
Reboot and recover
So is there a chance that you can emerge from active hibernation like Sidonie’s – hopefully not to start again from scratch – but to think about what you’d do if you were starting again from scratch? What would you do differently? What would you keep the same? Let’s aim for the kind of mental reboot that might just speed our recovery.
Visit our dedicated coronavirus business support page for a host of helpful resources.