‘I can’t keep making less and less’...plight of business owners hit by supply chain chaos
IF THERE is one thing a pottery company cannot do without, it is clay. Yet this is the predicament faced by small business owner Myfanwy Gloster, who runs Glosters in Porthmadog, North Wales, with her husband, Tom. The couple source clay from Spain via a company in Stoke-on-Trent. But in recent months, stocks have proved almost impossible to come by, with shipments often delayed in customs for weeks at a time.
Thousands of small business owners like Myfanwy are struggling to get hold of crucial items, due to the war in Ukraine, postBrexit shipping complications, rising energy costs and pandemic-related manufacturing delays.
About one in five firms is experiencing global supply chain disruption, according to the Office for National Statistics.
Everything from printer paper to sunflower oil, flower presses and car parts are in short supply. In some cases, the shortages are putting small businesses at risk and jeopardising the finances of their owners.
Myfanwy has had to dip into her own savings to stockpile clay when she can get hold of it so they do not run out again.
She hopes to be able to reimburse herself by the autumn, and is cutting back on household spending in the meantime to get by.
‘Normally, we order one ton of clay every five weeks, but recently bought six tons as we can’t afford to run out before Christmas, which is our busiest time,’ she says.
‘It cost £3,000, which is a big outlay, but we would rather know we have it in stock than not.
‘When we ran out of clay we had to cancel some orders as we just couldn’t fulfil them and we had people in the workshop unable to work.’
Lisa Johnson has seen her income from her skincare business, LJ Natural, plunge since Russia invaded Ukraine at the start of the year. About a third of her products use organic sunflower seed oil as a key ingredient, including her bestselling cream for eczema sufferers, Scratchy Balm.
However, supplies of the oil dried up for several weeks when the war started. Now Lisa can get hold of it again, but the price has risen by more than 50 per cent.
‘I’m trying desperately hard not to put my prices up, because my customers are already falling away and hundreds rely on my products for their skin health,’ says Lisa, a mother of two. ‘But it’s extremely hard 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 their spending, especially treats such as coffee and cake. She says: ‘The cost of sunflower seed oil is only likely to rise further.’
Emma Jones, founder of the small business support platform Enterprise Nation, believes that although small businesses are facing new challenges, they are well equipped to adapt to difficulties as a result of weathering the pandemic storm.
‘The experience of the pandemic has seen the business community pivot to cope with unprecedented circumstances, so they are used to coping with relentlessly changing situations,’ she says. ‘They have the strategies and the experience to handle things.’
Drew Cockton is adapting to rising costs and supply chain shortages at his luxury fragrance company, Owen Drew, by cutting back wherever he can. Drew launched his Liverpool-based business six years ago and last year successfully pitched for £50,000 on BBC One’s Dragons’ Den from Touker Suleyman.
Drew is planning a major rebrand on the advice of his new business partner. However, he has had to delay it by several months because he can’t source essential items such as paper and card.
The cost of wax, used in the candles he sells, has jumped by 40 per cent and supplies are taking months rather than days to arrive. The price of all the oils and scents he uses, such as oranges from Spain and grapefruit from Greece, have also shot up.
‘To try to absorb costs, I have put a stop on business spending such as PR and marketing,’ says Drew. ‘I’m also doing business meetings remotely online rather than over coffee or lunch.
‘And I’ve stopped making any other purchases as I need capital to buy stock when I can source it.’
Drew hopes to avoid dipping into his own savings to invest in the business, but will if it comes to it.
‘The Government needs to get a grip on this cost-of-living crisis,’ he says. ‘Nice things that make life enjoyable are slowly becoming unaffordable.’
Lynsey Bleakley is worried that supply issues are costing her customers at her luxury bakery, Bumble & Goose. She had to stop offering popular vegan items because she struggled to get hold of a vegan baking butter she relies on for the recipes.
Lynsey, who is based in Groomsport near Bangor in County Down, Northern Ireland, delivers personalised biscuits, cakes and brownies across the UK and Ireland and counts John Lewis, Harrods and Charlotte Tilbury among her corporate customers.
‘Many suppliers will no longer ship to Northern Ireland or will charge extortionate rates,’ she says. ‘We’re chasing supplies for vegan butter, which is great for biscuits, but we cannot get hold of it.’
Lynsey managed to find a supermarket in England that had 20 blocks and bought the lot, but is worried about running out again.
‘Our vegan range is small but important to us. I had to take the range off the website until we got 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 firms need targeted interventions from Government to help with the current cost-of-doingbusiness crisis so they can get the goods they need and find prices that are affordable.
‘Help could include cutting back on taxes, such as business rates and rising National Insurance payments,’ she says.
‘Staff in the workshop were unable to work’ ‘Help could include cutting back on taxes’