Care providers have been under immense pressure during the Covid-19 pandemic. Beyond the current crisis, the sector has some longer-term obstacles to overcome, such as finding skilled staff and dealing with shrinking margins.
Pineshield Management was established in 2002 and provides care for older people with dementia and adults and children with disabilities.
The company, led by chairman James Dwyer, has been through some significant changes and challenges since its inception, and has shown remarkable resilience. The firm accessed the expertise and support of
Business Wales Accelerated Growth Programme (AGP), which provides targeted support for ambitious growing firms. The programme is part-funded by the European Regional Development Fund through the Welsh Government. The firm says this support has been invaluable to securing its future.
Here, James Dwyer tells the story of the company and offers advice to others leading a business through challenging times.
Tell us about Pineshield Management
We should start at the beginning, about 18 years ago in 2002, when I set up the business. Back then it was a domiciliary care franchisee, and that lasted for 14 years or so, when we bought out the franchise and became Pineshield. Now, we have 45 staff and about 80 customers.
In 2011 we established a sister company called Menter Training, which focused on providing training and apprenticeship funded qualifications to the social care sector as well as health and safety training. My wife Catrina has been the managing director of Menter for the past three years.
But the future isn’t plain sailing and the last few years haven’t been either. We have faced multiple threats to the viability of the business. And the sector as a whole has been facing a general decline in margins in social care over the past 10 years, which we have seen reflected in our own margins over that time.
We had also slipped into a poor culture within the business, which led to a significant turnover of staff at the end of 2019 due to a morale crisis within the care workforce.
The quality of the service we provided suffered as a result, and our revenues fell by 20% from its peak. I felt strongly that all of this was a result of management failure, and that we required new management to turn this around. I’ll explain more about that later. We have been working hard to turn things around, we’ve definitely proved our resilience and now have a team who believe in the business and who we believe in as well.
We’ve recently seen a marked improvement in the morale of the staff. In August we had to isolate 50% of the workforce after two care workers tested positive for Covid-19. The other 50% pitched in to make sure the workload was covered. It’s fair to say this wouldn’t have happened back in 2019.
We’ve also seen a large reduction in the number of calls cancelled by us because of a lack of care worker availability. I think this demonstrates that our workforce is much more motivated now, and we all want the business to succeed.
What are your proudest moments in business so far?
One of our care workers is featured in the We Care Wales advert, which is currently running across various media channels. In it she explains how she is helping a client with dementia during Covid-19. It encapsulates everything that’s brilliant about our staff and our sector. And despite all the struggles we’ve had, care is at the very heart of what we do and it’s why we’re in this business.
What challenges have you faced in business?
We’ve faced plenty! The last 12 months or so have been particularly difficult. But we’re overcoming them, and, as I said earlier, our staff are more invested in the firm and its future now.
In January 2020, we faced a cash flow crisis, after the buyout of our former managing director who owned 33% of the business. We experienced a reduction in revenues as well as a number of significant costs including dealing with performance issues within the workforce.
On top of this, our funding bank refused to refinance to help us deal with this situation, due to our lack of profitability. And we were unsuccessful with an application for an overdraft facility with our commercial bank.
The company was propped up by my life savings. It wouldn’t have kept going otherwise.
Then, in late January 2020, I suffered a series of devastating personal issues. I was admitted to intensive care with H1N1 flu, my sister passed away while I was in intensive care and my mother suffered a heart attack. My mother eventually died in April after we managed to visit her in Australia, just two days before the lockdown of her care home started.
All this happened just before the Covid-19 situation occurred. As that escalated, we saw revenues drop a further 40% due to the cancellation of care calls due to fear of transmission of the virus. Meanwhile, PPE costs increased.
We sought help from the various support schemes out there, and initially we weren’t successful with the Business Interruption Loan Scheme which we planned to use to refinance our current loan. We didn’t fall into the criteria for business rates relief and our landlord wasn’t prepared to renegotiate the rent.
Menter Training saw its training business collapse to almost zero overnight thanks to Covid. We already knew there was little prospect of ongoing funding for the apprenticeship qualifications due to funding pressures faced by colleges. Menter owed Pineshield and its directors a total of about £130,000 which would have caused a collapse in Pineshield if it wasn’t able to repay a substantial amount of those debts.
All this was against a background of huge change within the business. From late 2019 we’d focused on improving the working culture to address low staff morale.
A new Operations Director, Jayne Holloway, joined us in September 2019 along with newly appointed Project and Quality Officer Jo Sulman. They worked together to make sure our staff were better supported and recognised. This also involved setting clear standards and boundaries. Interestingly, some of the most vocal critics within the workforce embraced the change and have since taken more central roles in the business.
This became important during the Covid situation when our care staff truly stepped up to the challenge of providing care during worrying times. They appeared to gain strength in being recognised as key workers and contributing to the wellbeing of their clients. Since then, we have built on this by establishing a five person-strong management team where previously there was none. We have implemented clear business objectives which cascade down to team and personal objectives.
From a business perspective, the only strategy open to us as Covid bit, was to focus on Government funding. We successfully applied for the Bounce Back loan, which finally allowed Pineshield to refinance our existing loan under much better terms.
We were also able to pick up some funds from phase 2 of the Business Resilience Fund for Menter Training. We also put people on furlough.
The biggest support, however, came from Cardiff Council who agreed to fund care that was cancelled due to clients being concerned about their exposure to the virus.
There has been lots of change and the business has had to be restructured. I managed to secure a quick sale of the Menter Training business to another local training business. We achieved this in about two months from the start of negotiations.
This allowed us to protect one job, which was transferred over to the new business. Together with the Covid support, the sale of the business was enough for Menter to repay most of its debts to Pineshield. We’re also looking to transfer the remaining two staff to Pineshield once furlough is completed
The main issue is that we now have excess real estate space which is unlikely to be sublet in time for the end of lease in November 2021.
If you were starting again, what would you do differently?
I would not have bought my business partner’s share when I did. Having said this, the cultural change that was required to turn the company around would have been delayed until the management transition had taken place.
How has support from Business Wales AGP helped your business?
Andy Bird of Business Wales AGP has been of immense help, providing me with both moral support and targeted advice through the difficult times we have experienced.
At one point in this process, I was considering winding up the business and Andy was able to arrange a call with someone who was able to give advice that brought me back from the edge.
Andy and his contacts have helped with accessing government funding and gave me the heads up on all new developments. More recently we have engaged a Business Wales AGP consultant to re-engineer our recruitment process which will be key to our growth.
Back in January 2020, Andy arranged a study of the UAE market, which helped prepare me for taking part in the Welsh trade visit to the Arab Health conference in Dubai.
Unfortunately, this is when I contracted H1N1 flu and was admitted into intensive care for a week. We’ve put this project on the back burner for the time being as we cope with the other pressures facing us, but it’s something I hope to revisit soon.
What advice and guidance would you give other businesses starting out?
- Be persistent and resilient. Everyone goes through tough times. If you can survive those, you can take advantage of the good times. If you give up, you’ll never be able to do that.
- Your business is a reflection of your staff. Respect, clarity around job roles and positive, can-do attitudes have a huge impact on your business.
- Surround yourself with great advisors.
- Great networks really help your business in good times and when things are tough.
To learn more about Pineshield visit here.
Further information on the Business Wales Accelerated Growth Programme