Today, we’re talking to Juan Pardo, a Business Adviser for the Business Gateway. He’s been in post just over three months on a part-time basis. This role is one of three jobs he has as he also works for Leicestershire County Council as a Policy Officer focussing on communities, and as a Spanish tutor.
What are the main issues that clients are talking to you about?
The need to secure a grant is often the main issue reflected by businesses. Unfortunately grants are not widely available and there are conditions attached, which not every business is able to fulfil. There is a sense of urgency, partially because of COVID, but also because of a change in business and market needs.
Unfortunately, clients often don’t come to us saying ‘I need some help to develop my business’. This is natural, since the first reaction is to close the gap and attend to the most immediate needs. However, a conversation with an adviser, understanding and listening to the business can be very productive and it can help to highlight areas that may not have been considered in the first instance. In my experience of working with businesses, but also VCSE organisations, a grant is not always the answer to everything, although, of course it can help.
Brexit, for example, was an issue and continues to be, particularly in terms of sourcing products from Europe. People have also had issues with supply chains if they were getting parts from China and in some cases, businesses were looking for grants to help them with that issue, particularly if they were in manufacturing. A few of the enquiries I received focused on grant aid support to cover current costs and help them to recuperate previous financial positions.
What effects have rising energy prices and cost of living increases had?
It’s something that’s intrinsic to all of my clients, particularly in manufacturing. They’ve seen cost increases of up to 50% in some cases. However, it has been affordable for them to continue their business operations because they were working through the stocks that they’d built up before the price rises and they’ve been able to absorb most of the costs and maintain their margins up to now. Some have had to pass on the price rises to their clients, but others will need to do that in the near future, which means price rises will be on the horizon.
Are there still effects from COVID?
Businesses have moved on in the main and of course some of the B2B businesses stayed operational throughout the pandemic and grew their business if they had the right products and services. Some of my clients have adapted their way of working or their products and that’s helped to reduce the pain in those cases.
Clients I’m working with at the moment are TEK Seating, and JVF Communications in Mountsorrel who are a software engineering company with a niche product. These clients are working with a fairly short supply chain, but the nature of their businesses means that they did not experience the same level of difficulty as more customer focused businesses felt. Of course, this does not mean it was all plain sailing, but their exposure was not the same as these other customer facing businesses.
The risk I see for these businesses is that the number of clients they have is limited and if one of those clients goes under, it has a big effect on the companies that are supplying them, of course. For instance, they may need to adapt to having fewer clients and that could mean a move to smaller premises if their turnover is reduced.
Did some clients manage to adapt to a different business model during the Pandemic?
One of my clients – a pharmacist – was doing well during the pandemic initially, because they were delivering the vaccines but, with the rise of medicines being available online from huge players like Amazon, and the decline in the vaccine programme, they face a threat to their business. So, they’re now considering digitising a large part of their business (such as prescriptions) and working with nursing homes and other providers to take orders online.
How well do you think Leicestershire companies have adapted to the rapidly changing circumstances over the past few years or innovated?
It depends on the business. Sectors like manufacturing seem to have adapted a little bit better.
Quite a lot of the enquiries we received came from companies that were only partly eligible for our support or not eligible at all for our ERDF package either because they were mainly operating in a business to consumer environment or because they did not fulfil with the criteria of the funding; for instance, they just started a business. Of course, in these cases, we are still offering advice to these clients, we try to refer them to schemes that can help them with their business development, and where appropriate suggest a number of seminars or webinars that can help them to grow their businesses. These are the ones who have really felt the pinch and I don’t think they’re in the clear yet. They are very small companies in a crowded market, without sufficient staff (because they can’t recruit them) and without support available. So, they are being squeezed from all sides.
How much are companies talking about sustainability as part of their business these days?
There is a company called Tapeformers. They’re a very small company that make metallic components. Their supply chain is very short, but it covers huge ground internationally because not many people produce what they produce around the world. We put them in touch with Nottingham University who are helping them install some solar PV panels on the roof.
They wanted to have a fleet of electric vehicles and so they will use that to power them. They also realised that they could save energy in their normal operations which was important to them.
But many other businesses who might be interested have had too many other big challenges to deal with before they can consider sustainability. Equally, at present there is not much financial assistance available for green technology or energy efficiency.
A lot of my clients, like the rest of the Business Gateway clients, are microbusinesses so they may not even have premises. For example, JL Mentor is about developing business support one on one, so they don’t have premises as such. The owner of La Danza Skirts works from home. Of course, if these people make improvements to their homes in terms of energy efficiency, it will benefit their business but that’s not always understood, and the assistance isn’t always available or easy to find. To be fair, most grants apply only to business premises at the moment and there aren’t many active currently.
What are the most interesting things about the companies you’re supporting?
TEK Seating is dynamic, open minded and patient in terms of the grant application process! JVF Communications is also interesting because there’s the potential for them to transform their business with new technology they are developing in house. Their growth plans entail an increase in capacity with stepping stone measures that will see them grow in a sustainable way.
Advancia Retail Displays is also interesting. It’s a one-man business that does displays for companies all around the UK, with some help from contractors he employs. It has huge potential and we’re supporting with some core business advice. They moved to B2C during the pandemic, but they are back now focusing on B2B where their strengths are.
Generally, most of our microbusiness clients would benefit from support with some of the fundamentals. They often have a very good business idea but don’t have ALL the business skills needed to make it a success. There’s nothing wrong with that and we’re here to help them with the areas they’re not so strong with, like business modelling for the future.
One thing I’ve noticed is that many of my clients need support to think differently and more holistically. So, what can they improve by thinking differently, how can they create a gap in the market or a USP? Fortunately, creativity and flexibility are two of my strengths, together with a very broad perspective and experience. Over the last 35 years I have worked in the public, private, charity, SME and social enterprise sectors, both in this country and in Europe; that gives me a wide spectrum to draw on.
I find that by connecting and linking diverse aspects of the business, and not losing perspective of the main issue, it is possible to draw from other areas that can help to maximise opportunities. For instance, supporting more efficient supply chains or decreasing existing costs, and therefore maximising profits.
Juan Pardo was talking to Peter Allen
