Plight of business owners affected by supply chain chaos
If there is one thing a pottery workshop cannot do without, it is clay. But such is the predicament of small business owner Myfanwy Gloster, who co-runs Glosters in Porthmadog, North Wales, with her husband Tom.
The couple obtain clay from Spain through a company in Stoke-on-Trent. But in recent months, getting supplies has proven almost impossible, with deliveries often being delayed in customs for weeks.
Thousands of small business owners like Myfanwy are struggling to get to essential items due to the war in Ukraine, post-Brexit delivery complications, rising energy costs and pandemic-related delays in manufacturing.
Icing on the cake: Lynsey Bleakley fears losing customers and Drew Cockton cuts costs
According to the Office for National Statistics, about one in five companies is affected by a global supply chain disruption.
From printer paper and sunflower oil to flower presses and car parts, everything is in short supply. In some cases, the shortage puts small businesses at risk and jeopardizes the finances of their owners.
Myfanwy had to reach into her own savings to stockpile clay when she can get it so they don’t run out again.
She hopes to be able to reimburse herself by the fall, and in the meantime is cutting household spending to make ends meet.
“We normally order a tonne of clay every five weeks, but recently we bought six tons as we can’t afford to go out before Christmas, our busiest time,” she says.
“It cost £3,000, which is a big expense, but we’d rather know we have it in stock than not.
“When we lost the audio we had to cancel some orders as we just couldn’t fulfill them and we had people in the shop who couldn’t work.”
Lisa Johnson has seen her income from her skincare business, LJ Natural, fall since Russia invaded Ukraine earlier this year. About a third of their products use organic sunflower oil as a key ingredient, including their best-selling eczema cream, Scratchy Balm.
However, when the war began, oil supplies dried up for several weeks. Now Lisa can get hold of it again, but the price has increased by more than 50 percent.
“I’m trying desperately not to raise my prices because my customers are already dropping out and hundreds are relying on my products for their skin health,” says Lisa, a mother of two. “But it’s extremely difficult for me to absorb these price increases and I can’t just keep making less and less money.”
Lisa and her family have cut back on spending, especially on treats like coffee and cake. She says, “The cost of sunflower oil is only likely to continue to rise.”
Emma Jones, founder of small business support platform Enterprise Nation, believes that while small businesses face new challenges, they are well-equipped to adapt to the difficulties posed by weathering the pandemic storm.
“The experience of the pandemic has resulted in the business community adjusting to coping with unprecedented circumstances, so they are used to coping with ever-changing situations,” she says. “They have the strategies and the experience to deal with things.”
At his luxury fragrance maker, Owen Drew, Drew Cockton is adapting to rising costs and supply chain bottlenecks by cutting back wherever he can.
Drew started his Liverpool-based company six years ago and last year successfully promoted Touker Suleyman’s BBC One’s Dragons’ Den for £50,000. On the advice of his new business partner, Drew is planning a major rebrand. However, he had to postpone it for several months because he was unable to obtain essential items such as paper and cardboard.
The cost of wax used in the candles it sells has increased by 40 percent and deliveries are taking months instead of days to arrive. The prices of all the oils and fragrances he uses, such as oranges from Spain and grapefruits from Greece, have also skyrocketed.
“To try to absorb the costs, I stopped business expenses like PR and marketing,” says Drew. “I also conduct business meetings remotely online rather than over coffee or lunch.
“And I’ve stopped making other purchases as I need capital to buy stock if I can source it.”
Drew hopes he can avoid turning to his own savings to invest in the business, but will do so when it comes down to it.
“The government needs to get a grip on this cost-of-living crisis,” he says. “Beautiful things that make life pleasant are slowly becoming unaffordable.”
Lynsey Bleakley is concerned supply problems are costing her customers at her luxury bakery, Bumble & Goose. She had to stop offering popular vegan items because she had trouble getting hold of a vegan shortbutter she relies on for the recipes.
Based in Groomsport near Bangor in County Down, Northern Ireland, Lynsey delivers personalized biscuits, cakes and brownies across the UK and Ireland and counts John Lewis, Harrods and Charlotte Tilbury among their corporate clients.
“Many suppliers no longer deliver to Northern Ireland or charge extortionate prices,” she says. “We’re looking for supplies of vegan butter, which is great for cookies, but we can’t get it.”
Lynsey managed to find a supermarket in England that was 20 blocks and bought the property but is concerned it will run out again.
“Our vegan range is small but important to us. I had to take the range off the website until we had the right ingredients, which means we could have lost potential customers,” she says.
Tina McKenzie, policy chair of the Federation of Small Businesses, says small businesses need targeted government intervention to help with the current operating cost crisis so they can get the goods they need and find affordable prices.
“Reducing taxes, such as corporate taxes and increasing social security contributions, could be helpful,” she says.
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