Prior to the COVID-19 pandemic, Hannah Lavery, a design house for women’s apparel based in Cape Town, drove a large portion of its business from the tourism sector, but during the lockdown, its domestic clientele stepped up to the plate to keep the company afloat. We sat down with namesake founder and owner Hannah Lavery to hear her story.
“When we had to close our physical stores at the start of the pandemic, we needed to innovate fast. Each member of the team became part of a virtual marketing team, we updated our social media strategy, and made content changes in line with global trends to become more engaging to meet market demand,” says Hannah.
The gusto with which Hannah and her team took on these challenges soon paid off, with the company still experiencing a strong burst of growth. “While our international clientele has also grown, it was the closest to home clients that pulled us through.”
Preserving cash flow in exchange for robust growth
“With every period of growth comes terrifying cash flow concerns because one tries to expand without debt,” says Hannah. However, in the current climate, she decided to maintain a conservative risk-averse approach to preserve jobs rather than fulfilling dreams of enormous growth.
“It’s a bit of a treacherous game in the current climate, so for me being cash positive is significantly more important. Through all this, my staff has been extremely loyal, and I do not want to put them or the company in a precarious position.” Hannah admits that in the past, her view would have been that putting the brakes on growth is a poor business practice. Yet, she is mindful that retail, especially in South Africa, is currently highly unpredictable. “Controlled growth is, therefore, more prudent,” advises Hannah.
The importance of accounting as a business grows
“A critical aspect of growth, controlled or robust, is to establish clear communication lines with your business advisors,” says Hannah. She and her accounting team have been in much more regular contact since the start of the pandemic. “Since working with Xero, our accountants have become integral to the growth of the business.”
Hannah’s view is that as soon as a business reaches a certain turnover level after some years of operation, it becomes challenging to manage its financial health. “You need knowledgeable people that can keep a close eye on the business all the time.”
The role of technology in retail
According to Hannah, technology has given her business the platform to satisfy customers under challenging circumstances during the pandemic. “We’re a lot more focused on online sales now, but we’ve also seen the value of a continued presence in the retail space while growing our online presence. Technology not only allows us to reach more consumers, but it’s also transforming retail space into tech-driven small store formats,” Hannah adds.
Advice for other entrepreneurs
Define yourself and know your unique selling point is Hannah’s succinct advice. “If you’re just entering the market, you need to have something that sells. To find something that sells is to provide something that the client sees value in,” Hannah advises.
Hannah also adds,“The first notable thing when you’re doing things by yourself is that you’re on your own. There aren’t mentors unless you look for them. So, if you’re struggling, ask for assistance from people that aren in the industry, most of whom will be eager to offer advice. In the beginning, I didn’t, but on reflection, I wish I had as it would’ve saved me much trouble. There’s so much to learn from other entrepreneurs.”