Valda Goodfellow proves that caring for customers and developing new ways to existing products pays off.
Steve Jones is the owner and Director at European Active Projects Limited, a Marine and Fabrication Engineering Business. The company has 65 employees and uses around 450 Romanian Sub-contractors, has 7 coastal locations in the UK from Newcastle to Falmouth and 2 European locations Gdansk Poland and Constanta Romania.
A Stable Maneuver
How did Covid-19 affect your business?
We watched as the virus developed and put together a Corona Disaster Plan late February early March, with some fortune I took my senior team to the England vs Wales Rugby match on the 7th March when contingencies were starting to be needed and discussions relevant to Covid were appearing, we as a team that weekend decided local managers and the workforce would not spread germs to other EAPL sites so intersite travel ceased. We would look at the workforce that needed to travel back to Romania and put contingencies in place for their return. We then looked at the supply base and house rentals which we could immediately cut and which we would have to retain. Our HSEQ (Health, Safety Environment & Quality) put in new Covid policies and procedures for working which we communicated to Clients.
As expected, we lost overnight 70% of our business, as a measure EAPL invoiced £2.6M in February and only £544K in April, March had a sudden 4th week drop off. With the lockdown the business was quickly regionalised, some parts our workforce were classed as key workers for the Naval Live Vessels in the North East and critical commercial vessels, where others including our largest customer ceased working at all in the South West, Southampton & Chatham retained about 50% of business. On top of this, commercial flights became very difficult to East European countries, so we chartered a Boeing 737 to get ½ the workforce home whilst others we managed to book commercially, and the rest stayed on as key workers.
We had put our Corona Disaster Plan together and in fact with Government announcements on VAT and the Furlough scheme it was a reasonably robust and sensible plan, we worked extending the supply base payment terms, collected our own debt in a reasonable manner, gave back rented houses very quickly and cut all costs whilst maintaining the IT, telecommunications, insurances and all key elements. We furloughed 50% of the Employee base with only managers and critical head office staff in work or working from home. I live 2 hours from my head office so spent 9 weeks working from home before venturing to Kent.
During lockdown into late April we were requested by 2 large customers to undertake fresh contract works to, this necessitated us chartering another 2 aircraft to fly from Constanta in Romania to the North East, strict regulations were made at the Romanian Airport with face masks and temperature checks, but the airport staff were very pleased to see UK activity bringing revenue into their airport.
Restrictions during May and June eased slightly with flights now going to Romania and back only for it to be stopped once more as the UK were highlighted worst in Europe, key workers were then routed through Bulgaria where the flight route was still open and still is today.
We recovered as the period went on and are now back to around 70% of where we were in February of this year, it is our belief that our revenue stream will not be back to where it was until mid – late 2021 as social distancing restricts the workforce on vessels and on land sites.
How did you approach your strategy to adapt to the challenges?
The strategy was always fluid – in an Owner Managed business even of our size flexibility and the ability to change plans very quickly have a positive impact on the business.We had the disaster plan and safety policies but these were just outlines, within this with the co-operation of the team decisions on a geographical basis can be made, the fact of actually taking on new contracts, flying guys in on chartered flights and recovering revenue helps to overcome the challenges, one thing we were very focussed on was ensuring we did not have excess men in the UK when they should be at home and vice versa to that having men in Quarantine unable to come to the UK.
As the country started to recover we could move quickly to recover the client base and business we previously enjoyed, we have done this to a large extent and are back with 90% of the employees at work and 65% of sub-contractors back in position, there will be redundancies but only a very few (5 ish) which with the knock is a good result.
Did your product or offering change?
It hasn’t changed in the short term, but I think in the longer term it will.We have started one initiative which will move on through 2020 to 2023+ as we struggle with qualified welders. Our young qualified people in the UK have been hit hard. I would like to take young under grads, A Levellers, unemployed Graduates and teach them a new (unthought of to them) skill – a Lloyds Qualified Welder. We are looking to put 3 people in each location (Total 21), using the Government’s £2,000 per trainee and train them over the next 2 years, putting them through all the technical theoretical courses and well as the practical ones – we have appointed a training co-ordinator and will be advertising in the next couple of weeks.
The rest of the product offering needs to be reviewed over what changes we may well need; core costs will rise, and these rises will have to be passed on but reluctantly. I think the next 6 months will make things clearer and allow a new vision to be constructed which will then take into account the new lifestyle and culture of life.
What was the hardest decision you had to take?
None really. All decisions were all fairly objective and not too emotional. We have gone through so far stronger than we thought, our cash position is better than March 23rd – although I owe HMRC £1M+ on Vat and PAYE, that aside we can weather another storm if necessary.
What or who helped you the most during this time?
I think my internal team, we all worked closely albeit by phone and E-mail to make the right decisions at the right time, I also have a supportive advisor who helped me tick the boxes and could see the sense in the decisions being made.
How does your Home Grown membership help you?
It was interesting to see the e-mails being sent out and that other members would be doing similar things in protecting their businesses.
Would you have done anything differently in hindsight and what?
Not worried as much or have been so grumpy – but that said if I didn’t then I may have made crass decisions or no decisions at all which could have been far worse.
What is your key advice for other entrepreneurs/business owners?
Keep a strong eye on cash, flex where possible. Be open with the people that work for you towards both good and bad news, gain their support and get everyone following the same agreed and supported route.
From childrenswear to face masks
Inspired by the frontliners working hard to keep us safe, Home Grown member Yen Chan, pivoted her business, childrenswear brand I Haven't the Foggiest in April, when she started producing masks with the fabric offcuts from her main collection of hand-illustrated designs.
"Every mask is uniquely different from the next in variation, each one designed and engineered. I started making them under lockdown as the fashion industry crumbled and all the sample rooms closed. I pivoted fairly early on in April using the fabric offcuts from the main collection of hand-illustrated designs, selling them at £3 with the idea that if our frontliners are working so hard for us to maintain some semblance of life continuity then I should be able to contribute productively more than sitting on the couch with a bag of pretzels and my laptop.
With much feedback and tested ideas they soon progressed to where they are now, using premium trims like strong yet lightweight organza continuous ribbon to ease pressure on the ears, 100% silk, velvet or grosgrain ribbon ties, 800 thread count filter pocketing and the softest of cotton, all hand-illustrated, even the solid coloured and plaid ones. Non-fade water dyes used and easy to launder, they may be popped into a little bag and machine washed at 30 degrees. For women, men and littles from 2yrs and up.
They are priced at £18.99 and I donate 10% of the masks to client.org, a charitable enterprise using the power of law to protect nature, our oceans and the environment as we move with a sense of urgency to address wide ranging concerns in our planet's health.
Despite the lack of marketing, the response has been phenomenal. The colours, unique prints, the quality of the fabric and above all, the comfort have been the driving factors in selling the masks. At least two third of customers have returned and bought more for their family and friends as gifts and 90% of new shoppers are referred. The remaining are returning clients pre-Covid. I have gotten to know many of my customers and it has increased visibility to the brand as I begin to ease into B to C in the aftermath of all wholesale trade-shows cancelling for the rest of the year.
Through the masks I found an exciting partnership that will take the business to the next level as well as a collaboration with a major law firm. It's been very busy and I've become quite skilled in sewing. I hope you enjoy your masks. Soft, comfortable, masks with a cause that can be beautiful/cool as a public health effort."