Futrli will not discover the cure to this pandemic, but we might just help overcome the symptoms of the recession and enable a massive increase in SMB productivity.

Highlights:

1. Identifying key trigger points, to preserve as much cash in the bank as possible for our small business community.
2. Emphasising a customers first, product second approach.
3. Making decisions vs having choices: Empowering our small businesses with the information to understand the choices available to them.

In the fourth episode of our “Reimagining” podcast series, Hannah Dawson, Founder and CEO of Futrli, shares her COVID experiences, rescuing her business and furthering her company’s mission to give small businesses the capability and tools to survive the recession and transform their businesses for the better.

Hannah is a serial entrepreneur who founded Futrli to address the endemic lack of advanced financial forecasting software for small businesses. Futrli’s goal is to ultimately reduce the systemic failure rates in small companies and empower them with more and better choices regarding their cash flows and their businesses as a whole. Futrli serves thousands of small businesses, all of whom have been affected by the current crisis, putting Futrli on the front line.

Let's jump straight in. When and how did you realise the significance of this pandemic crisis?

Around Christmas time, when the news outlets started reporting about the virus in China, I questioned: Is this a thing? Is this thing coming over here? Is it something to be worried about? As a business, our focus is to support other small businesses, and many of us know people who run small businesses. For instance, my friends that opened up a restaurant in Brighton, which was doing brilliantly (pre-pandemic) started to see that cancellation requests were coming in. As a result, we started to feel a sense of uneasiness. People were questioning whether they should continue with daily routines and standard practices, such as going to the gym.

Before lockdown, in the second week of March, my husband decided to go to Belfast with a group of his mates and one of them started to feel sick on a Saturday night. By Sunday evening, when my husband came home, he was bedridden. The following Tuesday/Wednesday, the government mandated a 7-day isolation and a further 14-day isolation if a family member had the virus. And then I caught the virus too.

From a business perspective, it was so early doors and the virus hadn't really started impacting businesses. We didn't know the economic effect would be, especially as lockdown hadn't been announced. But having gone through the experience and being knocked out for 10 days and having that second spike, it was quite scary. My CTO’s wife is a surgeon and she recommended that I go to A&E, as she felt I wasn’t breathing okay.  

Knowing how indiscriminate the virus is, personally, it's put everything into perspective. From a business perspective, during that lockdown week, our cancellation requests spiked. So we started to report those requests in addition to churn, because churn is actually a lag indicator, as it happens after the event. Often in non-enterprise B2B software, you're canceling a subscription at the end of that subscription period. This cancellation request could be a day, a week, or a month before the end. We started tracking the actual requests themselves. As you know, there was this massive correlation with that week and the number of cancellation requests.

So that was from a personal and anecdotal perspective. The final worrying piece was being part of tech CEO groups and hearing of how investors - I'm happy to say Notion did not do this - were telling their CEOs to get rid of staff straightaway. I thought: Oh, hold on a second we're not even a week into this yet, what is happening here? So the word of the moment - rather than using the words unprecedented times because they're well over used - is uncertainty.

How did you come to terms with the changes that you needed to make?

Futrli is all about forecasting where your business is going via our prediction software, meaning that having a handle on the data and its possible outcomes was our first port of call. As a result, I was working really closely with Colman, our CFO, making sure that we had the relevant trigger points. For instance, if we get to X in revenue, or if the cancellation requests X amount, we're going to have to make some really tough decisions for our business because we have to preserve the cash in the bank.

Next year, for businesses like ours, raising a Series B round is going to be really interesting. At this point we don't know what's going to happen with the investment market. Thus, preserving cash and making sure there’s a business at the end of this was of paramount importance, particularly in that first week.

Business aside, we of course have our people and employees to think about as well. A few of them were really worried. About the same time I got sick, anxiety levels were increasing, which led to many of them opting to work from home, even though it hadn’t been mandated yet.

We were all on the Corona briefing updates with the government and then debriefing as a team, making sure that we knew what we needed to do and how and we needed to pivot. We were being open and transparent with our team, letting them know that we're flexing and changing things as we see fit. We took a view to work from home early and we are incredibly lucky in our industry that we can work from anywhere on our computers. So from that perspective, it has turned out to be quite a positive thing for the business. It's that daily ability to be really dynamic in the decision making, that our leadership team was expressing, and the factors that we had to weigh up all the time.

It's one of those things that, in a very perverse way, I find quite enjoyable because there's a lot of strategic and critical thinking, overlaying of different scenarios and “what ifs” which I think for any business leader is a key skill. We had to be on our toes. We also had to respond back to our board. So we decided to have weekly board meetings for half an hour, to track those lead indicators, like track sales, cancellation requests and we'd already gone through some cost cutting a few months beforehand.

So tell us about the plan you put in place to ensure your company's survival?

We've been running a series of webinars with all of our small businesses and going through different industry verticals, looking at what they've gone through, the plans that they've put in place, and how they intend to bounce back. I think the first part of the answer to that question is the scenario modeling.

It's absolutely key to be conservative. We've had conservative forecasts that we’d created beforehand, but we are now calling these ripcord forecasts. Off the back of those forecasts, we understood that there's a revenue trigger point i.e if revenue dips below this point, we're going to have to make some really tough decisions. We too are taking the advice that we’re giving to all of our small businesses and as we’re all in the business of selling products/services. The next step was to think of cost reduction and the possible options, exploring the government schemes that were put in place: VAT was deferred immediately, taking advantage of “time to pay” arrangements with HMRC and more. Even in our business, we did all that we could to preserve as much cash as possible. We also have some debt in the business, so we looked to restructure that. We looked at any direct debits that we didn’t need, we even spoke with our landlords regarding rent. We asked ourselves: What do we absolutely need? We naturally do these things anyway, but we did it again as we wanted to be very disciplined in ensuring that our costs were under control.  For instance, some of our software vendors have given us 90 days instead of 30 days for payment. So it’s doing anything that you can do to eke out that cash, but at the same time, preserving those relationships so that you're still a good customer.

I mentioned earlier about the consultations with our board: it was brilliant that our chairman, who runs another very big company, was regularly devoting time to us to make sure that we are strategically on point with the decisions that we're making. But I have to say that after that spike of cancellation requests, we decided to take a look at ourselves and the business. We've gone through a lot this year, like launching a new website, which involves looking at the tone of voice, reconsidering how we want to engage with our customers and who we are as well as what the business represents. I feel very passionately about this, because we are not just selling products, we're helping people. We've done partnerships with Sweet Funding for instance, with the goal of helping our small businesses get access to funding. We're not pushing products, we're just helping them get to where they need to be. We’re making sure that they're making the right decisions with their employees, but also providing a platform for our small businesses to learn from each other - peer to peer learning is so key. The small community that we’ve launched, already has nearly 1,000 members in just a few weeks, which is amazing. All of those strategies that we can filter out to our customers have had a positive effect. Alongside all of our cost cutting initiatives that we're doing internally, externally, we really just wanted to help our small business community. Because if our businesses don't make it, it's not just us that suffers, but our entire economy is going to be decimated.

So what's changed now, in the business? What are you doing differently?

From a personal perspective, there’s definitely been a pivot. Myself and Helen Cockle, Co-founder and COO, are owning the outbound communication that we're having with our customers who are supporting our small businesses directly. It’s been very much a product second, customers first approach, which will continue. We’re doing this because it feels good, we're making a difference, and we are getting the feedback that what we’re doing is helpful.  

For other businesses out there, especially those that haven't changed their tone to really understanding the impact that this pandemic is having on their customers' lives, this is important.  Also not just that their customers’ lives from a business perspective, but the knock on effect to their families. Businesses need to take a look at their messaging and make sure that that sensitivity is there.

Other things that have changed in the business; we’ve seen revenues going up. So we've not had to pull the cord, but we're still monitoring all of the aforementioned lead indicators daily and we'll continue to do so.

A really interesting thing was posted in our community from one of our accountants which modelled accountants as “the NHS” for their small business clients. In that they need to look at the entire portfolio, understand who needs to be triaged immediately, who's critical care, who can go into the main wards and who can be handled via community care - all from a cash flow perspective. The velocity is now increasing from a banking perspective, CBILS loans flowing in which has provided that shot in the arm for a lot of small businesses. The initial fear has subsided, but I don't want to look at what could be happening in a few months time. So this was a really interesting comment from him, where he said that we need to go even deeper with how we're engaging with our customers and focusing on the fundamentals. As a business owner, this is the time to understand exactly what the implications of this crisis is going to be for you and your business. The sad knock on effect for all of this is not necessarily now, it's going to be next year when loans have to be repaid and if you need to make redundancies. Things like these are going to create an inflection in your cash position. So it's just that education, that’s changed for us and just doing anything and everything that we can to help ourselves and our customers.

From an employee basis, we’ve moved from Q1 to having a healthy workplace culture to a healthy, working from home and remote culture and assessing the differences that’s made. We’re reviewing our employee Net Promoter Scores constantly. We send out a regular employee survey, making sure that we're checking in on everyone. We've got a work-from-home banter channel on Slack, we’ve got a “water cooler zoom” and more. We're encouraging our teams to be as collaborative with each other as they can be, to ensure that people are okay. But overall, everybody's feeling okay. Whilst there's a handful of people who would like to go back to the office, the majority feel that they can continue working from home if they need to. Obviously for those who have children and are homeschooling, that's really hard. So we're being as flexible and supportive as we can be.

The crisis has been good and bad from a personal perspective, but everybody has their ups and downs. I have to force myself to go outside sometimes, so much so that I don't end up becoming a hermit! As a really sociable person who loves having a nice cocktail in a delightful bar or eating out, that’s a strange admission, but as a family we’ve been supporting the Brighton restaurant scene as much as we can by ordering a different home delivery meal every weekend. But I think we've all looked inwardly and thought, Yeah, I think I'm alright on my own. I'm okay with this distance. Or maybe that's just me, I'm not sure!

How do you reimagine the future for your industry and for Futrli?

This really has been a transformative time for me, our business and our mission. I think our  how that has been crystallized through this process. Futrli, is not going to discover the cure to this pandemic, but we might help to overcome the symptoms of the recession.

What we are endeavoring to do for those people that use our products in their business is to help them. No small business owner or operator feels like they're running a small business. It doesn't feel small to you when you're running it. It's just your business. What you do feel is that your business is unique. A digital marketing agency is different from a restaurant; a city center restaurant is different from a local artisan cafe. Businesses are different beasts that are living, breathing things, and traditional forecasting is not what our prediction software is. It's very different. Helping this market can be very difficult. What we really hope, for the people that use the products, is that it will trigger a seismic shift in the choices available to them and the decisions they make and that their productivity will increase as a result.  

Reports have shown that if small businesses adopt the kind of technology that bigger enterprises use, productivity in the UK would increase by 16% - which represents nearly £300 billion pounds of GDP! That’s a huge motivator for us.

Using this period as a reset for business owners to get their fundamentals right and to allow their numbers to navigate their decision making is really important. The phrases, making decisions vs having choices, has been something we've been looking at. A decision is something you do, whereas a choice is something you have.  What we want is for our small business owners to have better choices, whilst helping them navigate this rocky and uncharted territory. We want to enable them to pivot as we have done, because we understood our numbers and had the control and the power. The knock on effect is that these businesses will have greater economic prosperity for their families and the communities, whilst helping our economy bounce back.

So how do you feel now?

I feel energised. But like with any product launch, I'm slightly terrified because it's like putting my baby into a pageant (which, by the way, I don't agree with and I would never do!). For instance, this weekend we've been finishing video scripts and they've gone through the whole team. We have painstakingly iterated about how and why we want to communicate a certain way. Some may say: Oh God another piece of forecasting software. Well, no, it's not. This is totally different from anything you've experienced and that's exciting - but it comes with the equal seesaw emotion of being terrified. I’m desperate to get our products into the hands of as many people as possible to give them more and better choices.

We’re making sure that we have everything in place, even those things that we’ve been rubbish at in the past. With the changes that we made internally last year and the control I now feel over the direction of the business now, I think we've got a chance to do something special.