With double-digit inflation and the economy in recessionary terrain, businesses are facing significant challenges.
However, many are showing resilience and innovation in order to reduce their overheads, ensure their survival, and build the foundations for long-term trading success.
Here firms from across Wales tell us their stories.
The Tidy Kitchen Company
Laura Willett started catering business The Tidy Kitchen Company in 2017, but has since had to adapt her business model in response to the Covid-19 pandemic and is now looking at pivoting the business again to manage rising energy and food costs.
The firm has seen its energy costs alone rise from £400 to £2,000 a month, with any profit Laura now makes eaten up by monthly bills instead of being reinvested back into the business.
“Energy has been the biggest increase without a shadow of a doubt. Sometimes it makes you think, ‘how can this be happening?’” said Laura.
To try and mitigate this, Laura and her team batch cook products in the morning to limit the time that the oven is in use.
“We will switch off the oven halfway through the day rather than leave it on all day. We bake everything in house, so we’ll cook everything we need in the morning, then we’ll switch it off, cool it down, clean it and start again the next day,” she said.
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Laura also sells a reduced-price salad bowl using ingredients which are otherwise destined for food waste.
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With a fall in lunchtime footfall as more people work from home, Laura has also restructured her luxury sandwich shop.
Located on Museum Place in the capital, the shop opened earlier this year but has now become a prep kitchen selling wholesale meals for premises without a savoury food offering such as ‘tea & cake’ cafes and co-working spaces.
“A lot of coffee shops and eateries in Cardiff don’t actually prepare food on site, they purchase from local suppliers and then resell. We will be expanding our current range with the local community,” said Laura.
“The money that we would spend on advertising to increase footfall to the shop we’ve decided to reinvest into the back house, which is our strong point really, into more production and bringing us a better online presence. We’re working with ZERO2FIVE Food Industry Centre at Cardiff Metropolitan University to develop labelling for that now. We offer wraps and salads and will look to grow our product range.”
She is also developing a range of luxury ready meals in collaboration, which she plans to sell into retail.
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“Our business model has pretty much gone from events and catering to, all things planning out, product development and resale,” said Laura.
She also plans to ramp up the corporate lunch orders over the winter in order to future proof the business and combat the impact of rising bills. As well as joining apps like Deliveroo, UberEats and local platform Communiti to get more Tidy Kitchen meals directly to customers.
“I’m making these kinds of decisions because I want to look after the staff and future proof their jobs because we have people relying on us. If we can grow a Welsh business promoting Welsh produce and cooking, and take that throughout Wales and across the 海角视频 within the next 12 months, that would offer us a better level of security.”
Has she looked at additional finance to work through the escalating costs?
“We’re a small business and all self-funded. We haven’t borrowed any money from external companies from day one. I don’t want to borrow now because I don’t want to owe money when interest rates are so erratic.
“We’re just looking to work with what we’ve got at the moment and make it as streamlined as possible and then, should the time come, where we want to go down a different product development route then we will look at investment in the business rather than a financial loan.”
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Celtic Financial Planning
Celtic Financial Planning has embraced digital automation to reduce its costs. The independent financial advisor based in Mold, Flintshire, has improved its digital onboarding process for its client base which has reduced its dependency on paper, ink and postage.
"We've been using technology to make the client experience better and reduce our costs. This has helped us save thousands of pounds, not just in paper and ink costs but other efficiencies," said director Robert Lewis.
"Generally technology is a big thing for us to put more automation in place, so certain emails automatically get saved to clients files, phone calls automatically get saved to clients files. We're along the process chain looking at how automation can help the time we spend on clients, which also has a positive impact on the bottom line on costs."
Previously, the firm would have spend several hundred pounds a month on paper, ink, printing and postage costs, but has managed to reduce that dramatically.
"We've pressured a lot of the providers and investment managers that we work with to accept digital signatures," said Robert. "We use to spend a couple of £100s a month on paper and now we're probably down to £20 a month. Postage has also continued to go up year-on-year, so we've reduced the amount of letters we send via the post which has saved a lot of money. We were spending £250 a month on postage and now we're probably down to £30."
In terms of energy costs, Robert says the firm spends around £200 a month for gas and electric, avoiding the spiralling energy bills other business are currently facing.
But the business is much more aware of its energy usage now and discusses energy efficiency with staff in weekly meetings.
"Staff are encouraged to switch off lights after them. We use laptops which don't use a lot of energy, all the lighting in the building is LED. We've got loads of windows which let a lot of natural light in so most of the lights are kept off most of the time. The building is also very energy efficient," says Robert, adding that the firm's move to a newer, better insulated building two years ago has also helped.
"Where we were before you could probably triple that cost if not more, because it was an old building which was very dark and hard to heat up."
Other costs like increasing staff wages and office costs have been harder to mitigate.
"Our biggest costs are staffing costs and we have given everyone this year a cost of living bonus," says Robert. "Outside of that running the office day-to-day has been costly. We have a lot of licence fees, from Office 365 to our back office software, that we pay thousands of pounds for and many of these have gone up by around 10% this year. Our regulatory fees have also gone up.
"You've just got to absorb those costs. We have over the last sort of 12 months and this year we've had to put our fees up as advisors. You can be as efficient as possible to reduce costs but the bottom line is, because of the amount of price pressures we've seen, there still has to be some increase that is passed onto the consumer."
Robert is now looking at potentially installing solar panels next year to reduce the firm's dependency on gas.
"It was on our agenda anyway, but this year has certainly made the argument for it a lot stronger," he said. "Getting a bit of energy security is a much bigger thing than what it was."
"There is the additional capital outlay, which a business has to put through as an expense anyway, but ultimately, it's going to save us energy," he added estimating that it would cost around £12,000.
"It's around £12,000 for the panels and installation, I believe there's VAT on top of that, but then we would have enough supply to cover our energy needs. The payback could be anywhere around eight years. It would allow us to be carbon negative then as a business as well."
Bisley
Bisley has undertaken a number of energy efficiency projects to combat its spiralling energy costs. The business is an energy intensive office furniture manufacturer producing over 15,000 items a week at their factory in Newport.
The company is undertaking a number of efficiency measures to reduce these costs and cut its carbon emissions. This includes insulating its curing ovens which are used to set the powder coating on lots of Bisley products.
Operations director Paul Crutcher said: "We have five electrostatic powder coating plants with nine gas-fired ovens across them that either clean our steel or stove our powder coatings.
"These ovens are maintained at temperatures above 180degC, and as a factory we consume around 12 million kilowatt hours of gas a year fuelling them. The improved oven insulation has demonstrated to be able to achieve the temperatures required but by using around 15% less gas, a much welcomed efficiency improvement given that our gas has increased 10-fold and much kinder to the environment to boot."
Bisley is also investing in its infrastructure, undertaking a factory wide air leak survey and improving compressor efficiency.
"Around 20% of the electricity we consume goes into generating compressed air for the factory to run on," said Paul.
"Improving compressor efficiency by 20% therefore drops our overall consumption by 4%. We have committed to overall reduce our energy consumption by 10% through proactive measures, so you can see that targeting compressed air generation is very significant for us towards achieving the overall goal of energy consumption reduction & efficiency."
The manufacture is also looking at longer term capital project, namely committing £1.5m on a 2MW solar investment by June next year that should make it at least 20% electricity independent on an annual basis.
It also has a dedicated environmental team focusing on the manufacturer's energy reduction and carbon footprint.
"We've also implemented a ‘switch it off’ campaign which has so far saved 15% of electricity over the same three months when compared to last year. We have also made investments in improved technology and something called ‘Power Factor Correction’, which should improve our electricity consumption efficiency by around 3%."
Caer Beris Manor
Caer Beris Manor in mid-Wales was forced to close its new flagship restaurant due to spiralling bills despite the site being ‘packed’ since opening this summer.
Led by head chef James Tully, the restaurant - called Teulu - has proved popular since opening with rave reviews and the restaurant packed out. There had also been hopes the restaurant could have worked towards a Michelin star.
Despite this, the hotel - which is often frequented by celebrities - near Builth Wells is being forced to close its restaurant and will now operate only as a bed and breakfast for the foreseeable future.
The Southwick family, who took over the hotel in 2019, said this was due to the energy crisis and sky-rocketing operational costs. The owners have also had to contend with flooding and the Covid-19 pandemic since taking over the venue.
Co-owner Kimberley Southwick said that, while trading was tough in the current economic climate, the business was not closing.
"This journey has certainly thrown us some curveballs since taking over the manor at the end of 2019, just before the pandemic," she said.
"During this current economic crisis, with the costs of food and utilities not only doubling but tripling, we can't keep raising prices as, ultimately, it’s the customer who pays the highest price when it comes to the restaurant.
"We’re incredibly proud of the success of Teulu, but even with a packed restaurant and awesome reviews, it just could not be saved with what’s happening in the country right now. It’s yet another tough time for us, as it is for so many, but we want to say this loud and clear: we are not closing.
Kimberley added: "The manor will run as a B&B for the foreseeable future and we are always open for locals to pop in for a drink. There are numerous dining options in and around Builth Wells and we are so happy to be able to support these businesses.
“We’ve survived Covid, flooding and more, and we are confident that we will see through this economic crisis."
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