"This is a crucial moment for the Welsh economy and it is vital that business investors act now, to reinvigorate their local economies and to create and protect jobs. "
Simon Williams, MD of Storage Giant
A Welsh business leader has urged investors to seize the opportunities that have arisen from the current economic upset, if they are to shore up their local economies.
Simon Williams, MD of Storage Giant, which has its HQ in Newport, and facilities in Cardiff, Swansea, Llanelli, Cwmbran and throughout the Midlands and M4 corridor, set up his company during the turmoil of recession in 2007. He says the economic shock that has hit the UK economy in recent months will seed many new and vibrant businesses – if investors make sound decisions now.
“These are unusual times for everyone – for businesses and for individuals, and it is unsettling to see people and firms affected by the economic shocks caused by this global pandemic. However, just as The Government is telling consumers to support retailers by spending when the time is right, I would also urge investors to make their plans for a new business or for an expanded business a reality now. Bear in mind that adversity creates opportunity.
“Just this week we have seen Cardiff and Swansea being touted in the top 25 cities to invest in for business success as a start-up, according to The Raisin UK report. It considers the make-up of the working population in each city, the rates of business survival over one year, the variance in house price changes, the number of people per job opening and the price of office space per square foot, in order to find the best cities to invest in. Swansea comes in at number 12, thanks in part to the low cost of its office space, while Cardiff is number 23 on the list.
“A handful of other UK cities, Leicester, Bristol, Coventry, Chester and Brighton & Hove topped the list, which didn’t surprise me, as these are all locations where we have invested, here at Storage Giant. This is a crucial moment for the Welsh economy and it is vital that business investors act now, to reinvigorate their local economies, to create and protect jobs. I know from experience that grasping the nettle at a time of economic squeeze can yield positive results for businesses.
“I established Storage Giant in my home city of Newport, in late 2007, around the peak of the UK property market, but just before the financial collapse of 2008. Initially, the business did well, although on a very small scale. Due to the consistent increase in occupancy at our Newport Store, by the summer of 2008 we decided to look for another building in Cardiff. It wasn’t long before we located a prime retail building on Newport Road, and entered negotiations to acquire it. However, the timing of this couldn’t have been worse. We exchanged contracts in early September 2008 and then Lehman Brothers failed in late September 2008, which was the spark that initiated a severe stock market collapse due to worldwide collateralised debt obligations.
“Because of the financial collapse, the funding which we had already agreed was withdrawn at the end of 2008, so the company was then faced with trying to secure almost £4m of speculative funding to develop the store, which we were already contractually obligated to acquire. The situation could not have been much worse, at a time when banks were not funding any real-estate transactions. Through sheer determination we managed to secure the funding we needed from our existing lender by February 2009, and the store opened in October 2009.”
The business continued to grow throughout one of the worst economic downturns for Wales and the wider UK in recent history.
But, says Simon, he had no doubts that it would succeed: “It is vital to get the foundations of your business right, to have a sound business plan, to be astute about financing, forecasting and cost control. However, during a downturn, a start-up is likely to have a competitive edge because people will begin shopping around, even if they have been with a competitor for years. It will also open up a larger pool of suppliers and contractors who are more keen for your business. You will have the added advantage that large corporations may be scaling back during a downturn, and smaller competitors may be in a vulnerable state too. Start-ups are nimble enough to respond to new opportunities fast. A start-up is also in a prime position to negotiate hard with suppliers.”
Simon has seen the challenges and opportunities from both sides of the coin – both as an entrepreneur himself, and as someone whose company supports SMEs within his premises.
“We have seen more than 900 SMEs flourish under the Storage Giant roof in Wales alone - everything from charities to tech start-ups and fashion brands have set up their operations within Storage Giant facilities, since we offer flexible space for both office and storage along with attractive terms. So, we see small businesses thrive with the right support. It is notable too that smart use of technology has redrawn the landscape for start-ups, many of whom are now able to operate successfully from a single, well-designed unit. As we speak we are seeing entrepreneurs take their first steps into the business world with us, some expressly because they have been furloughed and they have had time to work on their hobbies and interest and to create a business plan, and to reimagine their working life. We have seen new gyms being set up under our roof, bicycle repair firms, and others, in the past few weeks.
“Start-ups that are forged in tough times are resilient, lean and ultra-efficient. You have no choice but to develop business habits that will serve you well if you adhere to them and fall into bad habits, which so many business do later in their growth cycle. Don’t be tempted to jump on those band wagons, stick to your plan and always set goals. Storage Giant now has 10 active facilities across the UK, with a further seven in the pipeline. We probably wouldn’t be quite the same firm we are today if the business had started at a different time in the economic cycle.”
Find the full Raisin UK report here: