Exclusive: ‘Answering the SOS for SMEs’ – Jack Maddock and Chris Hugo, Save My Local in “The Fintech Magazine”
Free-to-use platform Save My Local demonstrated how tech could leverage customer loyalty to help small businesses stay afloat in a crisis. Product owner Jack Maddock and business owner Chris Hugo take up the story…
Running a business is tough at the best of times. When you’re everything from the CEO to the cleaner, it’s easy to feel underpaid and overwhelmed. Cashflow doesn’t always flow and footfall doesn’t always fall. So, when the lockdown rules forced local business to pull down the shutters, many felt completely lost. Shops and services that once thrived on neighbourly custom had their source of income severed. For many, stumping up for bills and finding staff salaries became impossible.
British Business Bank said 60 per cent of small firms went into 2020 with less than £5k in credit balances. A couple of weeks after the UK’s March lockdown, accountants reported that 83 per cent of SME clients were already suffering from stress, with 11 per cent even feeling suicidal. By May, UK Finance estimated that a fifth of small businesses had less than a month of cash reserves left. A quarter of owners had used their personal savings to stay solvent; and almost a fifth said they were likely to cease trading or would not survive.
It’s been a grim and harrowing period for Britain’s independent businesses – and, despite the biggest government-backed rescue scheme in history, they are not out of the woods yet. Of those that qualified, many have run through the local council-administered grants and one in six smaller firms now relies on government backed debt through the Coronavirus Business Interruption Loan Scheme (CBILS) or the Bounce Back Loan Scheme (BBLS). But that’s exactly what they are: loans. And loans need to be repaid.
And yet, there are kind and creative people who’ve been reaching out to help. One of the first was a band of quick-thinking fintech problem-solvers, who pioneered a voucher platform, Save My Local. It was launched less than two weeks into lockdown and designed with every small business owner in mind – even for those who struggle to find the on-switch on a laptop. The idea was straightforward: we’ll help you set up a webpage to promote and sell vouchers that can be redeemed by your customers against future purchases. Its execution was seamlessly speedy, deceptively simple and, best of all, 100 per cent free.
Jack Maddock is one of the team of people behind it. “This initiative was born out of a tweet by Jason Bates of 11:FS, and then Mike Kelly, who runs Curl, got on board and brought the idea to life,” he explains. The platform has been a great example of how powerfully collaborative fintech can be. “People just jump on a Slack channel and ask ’what needs doing’. ’Hey, I’ve joined, I’m a copywriter’… ‘hey, I’m a designer’… ‘I’m a developer‘… ‘I just want to help – this seems really cool!’,’’ says Maddock.
The voucher platform, which was up and running in just one week, enabled a number of local businesses to stay afloat in those early weeks when nobody came through the doors. The advanced sales made enough of a dent in their outgoings, like rent and staff salaries, to keep them alive.
One of the business owners who’s loved using Save My Local is Chris Hugo, who owns Hugo Barbers in Winchester, Hampshire. For him, the idea of shutting up his buzzing business was almost unthinkable.
“I couldn’t really imagine that my businesses were going to be shut,” he says. “In theory, it was quite a safe business, but that changed overnight. It was quite scary, because you’re thinking ‘not only do I need to keep the business going, but all the people that work for me’. I’ve got a great team and didn’t want to lose them, or make them redundant.” For Hugo, the voucher scheme was a lifesaver. The instant payments helped to keep his six staff on the payroll and gave him some much-needed financial breathing space.
“I think there were two months’ pay cheques that we had to find. To get that bit of cashflow back into the business was worth so much.”
However, when the site first launched, Save My Local struck upon a surprising marketing challenge: its altruistic offer seemed too good to be true. We’re a sceptical bunch, and getting over this first hurdle was a major challenge for the team, which found itself fighting for inbox space with corporations.
Maddock recalls some of the first feedback he received from businesses. “They’d have 25 other emails saying ‘free way to get you through the crisis’, so when they saw ‘free way to sell vouchers’,” they thought ‘I’ll just add that to my pile’. The quote I always remember from the early days was someone saying ‘well, the best and worst thing is that you’re free!’.”
Both Maddock and Hugo have been touched by the widespread support and kindness from ordinary people. With the help of the platform, local communities were able to rally around independent businesses. An astonishing 70 customers bought vouchers from Hugo Barbers. It’s a testament to the loyalty that exists between a customer and a local business.
“Some of the names are people who came to me when I opened by myself, five years ago,” says Hugo. “All the support puts you at ease… it’s not only the financial side.” For Maddock in London, the experience has also brought that warm feeling of togetherness which is so often missing from a big city.
“Things may be a bit bleak at the moment, but if you look hard enough, you see so many good stories,” he says. “I thought London didn’t have that community feeling.” He’s heard first-hand from the businesses that’ve depended on their local customers. “It’s been a real learning curve, for me. Just to listen to businesses and to what people are going through, and how they’re dealing with it – it’s just great to see.”
Platforms like Save My Local have introduced some small businesses to using the internet for the first time: the little Italian restaurants that’ve welcomed three generations of the same families through their doors and know everyone’s favourite dish by heart; the fishmongers that throw in some extra prawns and ask how your nan’s doing; the beautician who dispenses weekly advice over a shellac and a coffee. They have never seen the need for a web presence, much less an ecommerce platform, in the past. The pandemic has been a brutal wakeup.
Since the easing of lockdown restrictions in June, the slow return to normality, last-minute delay and cancellation of government plans to reopen some sectors, the continued threat of closure as a trade-off for opening society elsewhere, and the looming spectre of mass unemployment, has meant small businesses exist in a constant state of anxiety – many with mounting financial responsibilities that will force them, zombie-like, to soldier on.
The high streets are deceptively busy. In fact, compared to 2019, footfall across all shopping destinations was down by 42.1 per cent in July (the first full month in which shops were allowed to open across the UK), according to the British Retail Consortium. And some small businesses, particularly those linked to seasonal or life events – children’s entertainers, party and fancy dress suppliers, wedding planners, dressmakers, caterers and florists – remain in their own private lockdown, demand stifled by restrictions on gatherings that have been postponed or cancelled.
They are still hoping for a better tomorrow. And until it comes, Save My Local’s job isn’t done.