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Business focus: how some small firms are on the up despite coronavirus lockdown

Bethany Koby is co-founder and CEO of coding gadgets start-up Tech Will Save Us: Tech Will Save Us
Bethany Koby is co-founder and CEO of coding gadgets start-up Tech Will Save Us: Tech Will Save Us

ASK any supermarket shopper or enforced telly addict who’s doing well out of this coronavirus crisis and the answer is clear.

Corporate behemoths like Tesco and Amazon are obvious winners but, cheeringly, some small firms are also enjoying a boon, notching up sales figures they could have only dreamt about.

“It’s gloomy out there but there are some great businesses getting on with it and having phenomenal growth,” according to Mark Hart, small business professor at Aston Business School.

“In the teeth of the crisis the small businesses which survive innovate and pivot their business model to think about new ways of delivering.”

Take Stitch & Story, an online knitting company selling sewing kits and tutorials for budding knitters.

The firm saw orders rise an astonishing 1,573% in March as consumers reached for the knitting needles during the lockdown. Volumes have become so great that the company has resorted to using Uber to transport parcels to the sorting office.

“The orders have got a bit crazy,” says co-founder Jen Lam. “It feels like Black Friday. We’re seeing people stockpile yarn as if they’re adding toilet roll.”

Since the first tremors of coronavirus disruption were felt in mid-March, the fortunes of SMEs have diverged.

While school closures have hurt many, they have also proved a boon for small businesses selling educational toys as parents look for fun activities to placate bored children stuck at home.

Bethany Koby, chief executive of Tech Will Save Us, a firm making DIY coding kits, says sales of its electro-dough toys and music kits have been so brisk it is trying to obtain stock from shuttered high street retailers to sell online. Sales are up 81% for March versus last year.

“It’s terrible they are directly linked to isolation but useful that we have a product helping parents and kids,” she says.

With unimaginable levels of demand stretching the resources of even large firms, finding new ways of working are also common for small start-ups. Field&Flower, an online meat delivery service, is another business seeing a surge in trading due to the crisis.

Sales rose 160% after people were told to work from home and the company has moved to a 24-hour operation to meet demand with plans to add eight more staff to its 20-strong team.

“We work normally 6am to 6pm but now we are working through the night to deal with the demand and replenish stock on our shelves,” says co-founder James Mansfield.

Then there’s the booze industry. A move by the Government to reclassify off-licences and wine shops as “essential” services has provided a reprieve for many small operators who don’t have the same online capability as giants like Majestic.

Jeroboams, a 35-year-old wine business with eight retail stores across London, said like-for-like sales spiked 50% and volumes rose 100% in the first wave of the shutdown as people stocked up on claret, cushioning the blow of shuttering its restaurant supply business.

It relies solely on walk-in trade and phone orders and was planning for harder times when it was forced to close but last week’s policy change has salvaged the business.

“I was prepared for the worst so I was quite pleased. I was worried our business would go to the supermarkets and that didn’t seem fair,” says chief executive Hugh Sturges.

The statistics may be grim at the moment but hard times often forge stronger companies, reports show.

A reent study by Professor Hart tracking a cohort of business from 1998 to 2014 found 20% of the most successful start-ups he followed had their biggest sales growth in the 2009-11 downturn, suggesting bad times can be good for many.

“The biggest spurt was in the midst of the recessions,” he says. “Now it’s happening again.” A silver lining perhaps in these dark days.