We won a gong at the Yorkshire Post Excellence in Business Awards this year! Dawn O’Keefe, our Managing Director, led us to a win in the Turnaround category. Dawn and part of the team (Bally, Emily, April, and Abi) accepted the award on Thursday the 1st of November at a gala in the York Train Museum (pictured below).
We’re grateful to all our customers, who believed in a better way to meet, office, cater, and conference. You are helping us make a huge positive impact on the lives of women ex-offenders, local children, and area entrepreneurs. Thank you.
But, I can hear y’all saying; “So what happened?” “A turnaround?” “We never knew!”
We’ve made our work about positive impact and have avoided dwelling on the massive obstacles we’ve faced and overcome. And under the leadership of Dawn O’Keefe, we’ve conquered a lot in the last couple of years. If you’re curious, and who wouldn’t be, here’s the story as I told it to the Yorkshire Post…
Shine: Our (Turnaround) Story
The consultant sitting across the table was trying to impose his will. At least that’s how the facts of the situation sounded like to me. We had survived opening our property based social business the very week Lehman Brothers collapsed in 2008. We had opened and operated against all odds up to this point. The challenging location, the social impact focus, and the economy all combined to make things much more difficult than they should have been. Why couldn’t he see that just a little more time is all we needed?
While we were growing, the uneven nature of our sales made it difficult to predict the future. The consultants had predicted the future and decided it was all over for us. They were recommending a creditors voluntary arrangement (CVA). I thought it was an escape hatch from the madness of monthly meetings with the banks and the stress of ensuring sales kept rising. I thought it was a way forward, saving the business we started only five years earlier. Only later did I realise they probably saw it as a softer crash landing for our business.
I signed the papers that day. I succumbed to the pressure of consultants and our banks. We entered a CVA in 2013.
It was a funny position in which to find ourselves. We had beat the odds to raise the finance and funding to launch our business. Our experiment with a social impact business was still attracting international attention and our client list included notable companies across the UK, with some globally recognisable. Yet, we were short on cash and payroll was a mountain we couldn’t summit. I wondered if we could beat the odds again, knowing only 5% of businesses entering a CVA make it to the other side.
In a CVA, with virtually no cash, and our dream going down the drain. How did we get here?
I suppose it was death by a thousand cuts. The economic turndown prompted one of our banks to deplete our working capital at the start. A poor hiring decision early on cost us tens of thousands, and we kept over promising to our creditors — breaking their confidence in us. And the backdrop for all these mistakes was the big experiment we were conducting.
Was it possible to integrate social impact within a commercial business?
Experiment wouldn’t be our word, but this was certainly the view of our stakeholders. It made each day a war with battles being fought on several fronts. I had become fatigued by the need to continuously convince customers and stakeholders it wasn’t an experiment.
Following our signing of the CVA, the discussions at board level were heated. It became clear the company was going to need to radically alter its approach if we were to have any chance of seeing the other side of the CVA. As a result, I stepped down as CEO and Dawn O’Keefe was appointed both managing director and financial director. Painful as this was for me, it was clear that a different kind of skill set was going to be needed to make the thing I had dreamt up, a reality.
Dawn, who had saved the company from liquidation just 3 years earlier by agreeing £80,000 in emergency funding with a stakeholder, was now tasked with the gargantuan task of simultaneously focusing the company’s social impact efforts, halting the bleeding of cash, and growing sales at a rate twice our industry average.
Over the course of the next 5 years, Dawn managed to focus the social mission of the business from an array of small efforts into three significant areas directly related to the business of Shine. Firstly, she agreed a partnership with Askham Women’s Prison to hire and train non-violent ex-offenders. This would become the centrepiece of Shine’s social impact, which also includes working with the local community to provide work experience, opportunities for local children to experience the arts, and support for entrepreneurs through low cost hot desks and business opportunities. These three areas are now integrated into the Shine business model, without the need for government grants.
Cash was conserved, stockpiled. Dawn used tight management controls and gritty determination to see costs down. But, to ensure she could fully realise the potential of the systems put in place, she added a CIMA to her MBA while managing the turnaround. As a result, Dawn managed to stockpile cash for creditors while putting the business on a healthy footing.
In most turnaround situations, cost cutting is at the centre of the efforts because the failing business usually enjoys solid fundamentals. Hence, we hear folks talking about ‘righting the ship’. Shine hadn’t left the port yet. It needed both cost cutting and growth to survive the CVA. Dawn orchestrated meaningful sales growth that came within 4% of the sales forecasts constructed five years prior. Her credible forecasting, that saw double digit growth for 5 consecutive years, kept the creditors at bay and set the scene for the resolution of the CVA.
On December 20th, 2017 Dawn agreed the end of the CVA with creditors— a full 3 months in advance and with a savings to see the company into 2018 and beyond.
Shine had its best year yet, ending in March 2018. It is setup to see further growth as Dawn’s customer development work spreads the story of Shine and her Eat Good Do Good food catering initiative spurs further growth (400% growth in catering over the past year).
With the odds stacked against Shine — a CVA, its social impact in disarray, and dwindling cash— Dawn was able to steer the company to a better future by not only beating the odds, but smashing them with both the construction of solid fundamentals and prospects for future growth.
Whew! It’s been an exciting 10 years. Here’s to you, our friends, colleagues, partners, and customers. Thank you.
—-Todd Hannula, Founder and Creative Director