Event highlights: startup support and advice with Andrew Roughan

Plexal’s managing director Andrew Roughan hosted a virtual event for our members to help them navigate the support available to startups and the challenges they’re facing as the pandemic continues. Here are some of the highlights.

Government support

Here’s what startups and SMEs need to know:

  1. The furlough scheme has been extended until April 2021. Staff now need to be registered on PAYE as of 31 October 2020. Those hired between March-Oct 2020 are now able to take advantage of this scheme. It’s also possible to furlough someone part-time. For example, they could be on furlough a few days a week.
  2. The government has announced additional support for businesses but the support is not as significant or far-reaching as previous interventions. As well as support for retail, hospitality and leisure businesses (worth up to £9,000 per property), a £594m top-up of the discretionary fund is now available to support other impacted businesses.
  3. There is a further extension of the business rates relief, with businesses eligible for a grant worth either £3,000, £6,000 or £9,000 (depending on the size of your rates). But businesses in coworking spaces aren’t eligible for this, as they pay rates as part of their membership fee. “That is an industry anomaly,” Andrew said. Plexal was part of a consortium that successfully campaigned on behalf of members of coworking spaces. This means that local authorities are now able to distribute funds from the Discretionary Grant Scheme to businesses that don’t incur business rates (and aren’t eligible for rates relief). Andrew expects the scheme to be very oversubscribed this time round, but Plexal will make sure our members have the support they need to fill applications in.

Andrew also suggested startups explore other avenues for cash other than pandemic-related government relief by bidding for government-backed projects and applying for grants. Many Plexal members have enjoyed grants from Innovate UK, the government’s innovation agency, for example. “We have seen a massive influx of government activity in the first two weeks of this year,” he noted.

To furlough, or not to furlough?

Plexal has opted not to make use of the furlough scheme this time round, and advised members to think hard about whether it’s the right option. Practically speaking, we have more members using the space than we did in the first lockdown – which means we need more of our team available. But we also didn’t want to damage team morale – especially as we needed to put our energy into growing the business and winning new contracts.

“Consider the impact on your people,” Andrew advised. “Furlough was a great lifeline that generated leeway for us but we underestimated what it did to team morale.”

Manage your cashflow

Andrew said it was important to “understand your debtors and understand your creditors and talk to them like normal human beings”. There are people in both groups who can’t make commitments, but the best thing to do is just talk to them about options like a different kind of payment plan and be open. Andrew also reminded members to get as much cash flowing into the business as possible, and never ignore a debt building up. “You are not your customer’s bank,” he said. ”They have a bank, and that bank is hopefully treating them well and giving them liquidity. Never assume that you have to bear that burden of liquidity.”


Work your network

Speaking to members specifically, Andrew called on our members to come to us with ideas for ways that we can collaborate and to ask us for support:

“We want to be more than the place you work at – we’re here to build a community where you can thrive. So use us. Talk to us. We don’t have all the answers – but we might know someone who does.”

He also reminded members to lean on their networks and take advantage of the fact that they work in a community of collaborators. Ask members who have successfully been funded for advice or introductions, for example. Andrew said: “There are people in Plexal who want to work together and help. And that could be your product coming together with their product and going for some funding, all the way through to a peer group relationship where people can ask for advice.”



Sell to large organisations

Andrew also suggests startups look to large enterprises with big pockets and even bigger innovation challenges. Plexal’s Spend to Save campaign calls on industry to work more closely with startups by giving them pilots, proof of concepts and contracts. But working with large clients can eat up a lot of time and in many cases doesn’t always result in cash in the bank. He offered up some advice:

“It’s clearly a bit of a dark art. And it’s clearly cumbersome and bureaucratic. So make sure you understand their buying cycle correctly, you understand their terms and requirements for anything like a preferred supplier list. And then foresee what it will take in terms of certification and process compliance in order to sell to them. Don’t wait for things to emerge when you’re in the process.”



To highlight a real-world example of how startups can develop a relationship with a large organisation that results in a contract, Andrew spoke about our member VIVIDA: a VR startup that’s going through our cybersecurity accelerator. We introduced VIVIDA to our partner Lloyds Banking Group. An initial demo led to a small internal proof of concept exercise and a contract that will see VIVIDA producing an immersive education experience for employees. Plexal helped support the contractual onboarding of VIVIDA as a new supplier to help things move along quickly.

There’s no such thing as over-communication

Andrew said that the key to surviving the pandemic is transparency and communication – whether it’s with your team, creditors, debtors or investors.

At the beginning of the pandemic Andrew shared clear scenario planning with our investors that included:

  • what the risk of each scenario was
  • how that risk might transpire
  • how we’d deal with it if it did occur

He framed this around three possible cases: low, medium and high risk. This meant our investors felt informed and trusted us to execute our plans.

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