Fi Titus is the serial entrepreneur behind Lime Hut and, more recently, Coco Financial. In our newest Instagram Live series that examines how small business owners are navigating COVID-19, Fi explained to us how she’s keeping on track. Thanks to her background in accounting and finance, she’s also able to break down how fellow entrepreneurs can make sense of all the government support available.
Tell us about your first venture, Lime Hut.
Lime Hut is a healthy Caribbean street food brand. After university, I did the usual thing and got an internship in the City working in finance and whilst I enjoyed the firm I was in, I wasn’t passionate about it. I started hosting supper clubs for fun and they kept selling out, and that was the genesis of Lime Hut.
I currently trade as a street food vendor at Berwick Street Market in Soho on Thursdays and Fridays at lunchtime, and also host fun events like yoga lunches, twerk brunches, private catering as well as private chef events. I absolutely love it. Lime Hut has a modern twist and I believe it’s important to bring a healthy angle to Caribbean food, which is delicious but the portions tend to be very heavy, deep fried and with a lot of salt. I wanted to tackle the dietary issues in our community, like diabetes and high blood pressure.
How had Lime Hut been going prior to COVID-19?
I launched Lime Hut two and a half years ago. Getting an official bricks and mortar site was always the initial goal with street food being the ‘beta phase’. That’s still in the pipeline but right now it’s not the right time to invest in that model. But never say never.
The nature of Lime Hut is very seasonal anyway: being an outside street food brand, winter is very difficult, but then as we get to spring and summer things are the complete opposite – there are queues everywhere. Just before COVID-19 hit, things were going as they should have been and we were actually doing better than we were this time last year. But since the impact of COVID-19, particularly combined with it being wintertime, it’s been very difficult from a cash flow perspective. That’s why I’ve had to make the really difficult decision to close our doors for this uncertain period, and it’s now about working out what Lime Hut means in the world and what we can do to pivot.
Do you have some ideas for pivoting?
The obvious thing that people have said when it comes to adopting our strategy to the situation is implementing a delivery model. While I’d love to, street food licensing is very different to commercial and kitchen licences. As street food vendors we are registered in our home addresses and I don’t have the space or equipment to make that work. We also currently have a five star hygiene rating and we wouldn’t want to do anything to jeopardise that or the health of our customers.
I actually do have a collaboration in the pipeline with a well-known recipe box delivery company, which was lined up before COVID-19. I had set some goals with a view to start on them at some point in 2020 or 2021, but realistically everything that’s happened has almost forced my hand to make me look at things sooner. That’s the reality of being an entrepreneur anyway: no one knows what tomorrow looks like and it’s about being agile and moving with the times.
I’m also currently writing a book and already have eight episodes of food tutorials in post-production. I’m really excited about them coming out in mid-April.
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How did you talk to your staff about closing Lime Hut?
I’m really close to my staff. The nature of street food being a part-time venture, my staff are casual workers, but that said, I don’t take that for granted or view that as being any less than a permanent employee. Even before Berwick Street Market officially closed down, I made the decision that it was no longer appropriate or safe for us to be trading and let my team know the situation. I covered their wages until the end of March, which they were very grateful for, and I’m also very appreciative of all the work they’ve put in over the past year. We are a family team and it felt like the right thing to do.
How have you dealt with stock and suppliers? Have there been any issues?
Westminster Council haven’t been particularly organised and a really poorly-timed letter informing us about a fee increase arrived two weeks ago, which obviously ruffled a lot of feathers (they have waived the fee for now). People are having difficult conversations all around, and I’ve made a sensible decision to cut all necessary costs, put things on pause, and have some difficult conversations with landlords and suppliers.
I’ve seen larger companies dictating what they are and aren’t going to pay, and it’s made me realise that just because I’m a small business doesn’t mean I need to be acting small. I’ve had to assert myself and tell them what I will and won’t pay, and they’ve accepted the terms. When it comes to making those negotiations, it’s in your favour to ask – if you don’t ask, you don’t get. No one else will be giving your supplier a better deal because we’re all on lockdown. Ask for what you deserve.
Has COVID-19 made you change the way you do business moving forward?
Going forward, Lime Hut will be cashless. Cash handling isn’t very hygienic anyway, as particularly as a female business owner, I don’t like carrying large amounts of cash in public.
The situation has also made me think about what pivots I need to make. Street food is where I started this journey but there are other things in the pipeline that have been brought forward, and so we’ll see what Lime Hut will look like in the near future. The end goal is still to have a bricks and mortar venue and if that means building the brand a different way to get there, so be it. I’m excited – uncertainty is good because it gives perspective and creates opportunities.
How have you been during all of this?
I’m weirdly really calm. I’ve had so many ups and downs over the past two years running both Lime Hut and Coco Financial, and as entrepreneurs we are constantly being blindsided by the things we just couldn’t have planned for. The fact there is collective chaos across multiple industries and around the entire world – we just can’t do anything about it.
One rule I have for running a business is to prioritise how we deal with things. Is it in your control? If yes, address it. If not, stop stressing about it or work on damage limitation. COVID-19 is so far out of everyone’s control that I think it’s been a good opportunity for me to step back and work out how I can build a better, smarter, more future-proof Lime Hut. I wouldn’t have done that if I wasn’t forced to stop.
How do you build self-care into your routine to avoid burnout?
Running two businesses, it is really hard to balance a social life alongside the professional. For me, the number one thing is exercise. It helps rebalance and focus the mind, and it has so many benefits. That’s the one routine I’ve been able to keep going during the lockdown, but I also play netball and so I can’t wait to play that again!
It’s also important to remember that as an entrepreneur you are allowed a holiday!
Let’s talk about Coco Financial. You launched a short time ago but already have several clients. What’s the reception been like?
Coco Financial came about last year. Having previously worked in finance, I took for granted how much I knew about accounts and knew a lot of entrepreneurs – particularly female-owned businesses – who had amazing business ideas but lacked the confidence or knowledge on the financial side of things. I launched Coco Financial with my cousin Shan because we think it’s really important to equip as many millennials with the tools to confidently tackle their business’ finances.
People were really pleased to see that we weren’t your typical men in suits. Shan, my business partner and cousin, is a very technical accountant who is ICW accredited. I studied accountancy and I qualified at Deloitte but the edge we have as a pairing is that I’ve run a profitable business for over two years. I think people either have experience of accountants understanding their field but not the practicalities of running a business, or accountants with a business consultancy mind who skirt over the really important legal stuff. We are also more relatable to millennials, our target audience.
Have you noticed many misconceptions about accounting that business owners have had?
The number one thing is people (understandably) think in cash terms. ‘Accrual accounting’ is where you recognise revenue when it’s been incurred rather than when it’s been spent. For example, I catered an event for an international sports firm and invoiced them, meaning they paid me a month later. Even so, l recognised the revenue at the point in time that I performed the service, and this is something that trips people up and their accounts are very out of kilt as a result. Even one of my clients who has 20 employees and an annual turnover of £3.5million didn’t know this. Numbers seem scary to a lot of people – but numbers fill the picture and pictures are less scary.
Back to basics: what is cash flow and how can we manage it during times like this?
Cash flow is the difference between the cash you have at the start of a given period compared to the end of it. You have a positive cash flow if you have a higher balance at the end, and negative if you have a lower balance.
It’s really hard to grow as a small business if you don’t have access to cash, and so having the most positive cash flow possible is really important. Ways you can manipulate your cash flow include practices like making sure you have as many short-term receivable amounts coming in as possible. Running Lime Hut at a street market, I receive cash straight away, whereas I pay my own suppliers on a weekly basis. This way, I constantly have money coming in and my outgoings occur less often. If you can negotiate more favourable receivable income and negotiate longer payment terms with your suppliers, you’re already winning in terms of cash flow. It’s all about believing you have the power to negotiate. If you don’t ask, you don’t get.
Now that we’re all working from home, what expenses can we claim back?
If you’re a sole trader and you’ve made your living room your office, you can apportion that amount of rent you pay as some of your expenses. For example, if you have five rooms in your house and one has effectively become your office under the current circumstances, you can claim one-fifth of your rent as an acceptable expense.
If you’re running a limited company (and presuming your cash flow is looking good), a lot of people don’t know that you can expense up to £300 of what’s called ‘director’s gifts’. Each individual gift must be below £50 and that is an allowable expense to ‘treat yourself’.
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Are you a fan of accounting platforms like Xero?
Generally, I’m a huge fan of Xero. It’s really bad for payroll though. If you use it and employ people, the functionality of it and the RTI submissions for HMRC are terrible. But if you have a simple business structure, with incomings and outgoings, it works fine.
What is some of the help being given to small businesses by the government and how we can access it?
The government is doing their best, and this is an unprecedented situation, but I don’t think the measures are going far enough to help people right now. That said, if anyone is worried, just feel comforted that everyone else is in the same boat and it will be fine.
The government has announced measures to help self-employed people whose annual profits don’t exceed £50k, and this was welcomed by a lot of self-employed people who had felt excluded from measures the government had announced to help the employed. £50k is a lot compared to the national average, but there are a lot of people who don’t fit into this criteria: in London, £50k doesn’t stretch as far as elsewhere and so freelancers and other self-employed people may be dissatisfied with these measures, while those own limited companies may have to furlough themselves (explained below) to be eligible.
For those that do fit the criteria, help will be coming but not until the end of June. HMRC will contact you directly and so at the moment there is nothing you can do. In the meantime, I strongly recommend cutting all unnecessary costs now to help your cash flow, thinking about ways to pivot, and having a frank conversation about rent with your landlord. If you are a homeowner, you already have a three-month mortgage ‘holiday’ as mandated by the government, which will not affect your credit score.
There are some other forms of support that the government has made available to small businesses, namely:
Furloughing
Furloughing entails a redundancy-like payment package in which you are expected to return to the company afterwards. The government has mandated that they will cover 80% of employee salaries, and so if you own a limited company you may be able to furlough yourself as an ‘employee’ and access this support. Under the furlough rules, you can’t work for the business during that period.
Business rates holiday
If you have a permanent retail space, you can take a business rates ‘holiday’. Business rates are an arbitrary amount that businesses with physical properties must pay. It’s a really high cost for many businesses and I believe it’s an outdated system anyway that is long due an overhaul.
Business Interruption Loan
The Business Interruption Loan is open to everyone under COVID-19. I’m personally not likely to apply for this as it would be taking on additional debt just to survive, however I do recommend it if you run a business and have been wanting to invest in an asset that is expensive. This is going to be a really cheap way to finance that, as it is 12 months interest-free followed by a more reasonable level of interest.
However, some clients of mine who applied for this loan have been asked to be personal guarantors against the loan. This possibly an omission by the government or a cheeky move on the part of the banks, but I haven’t yet got to the bottom of it. If you’d like to stay updated on this you send us a DM on Instagram at @cocofinancial.
Annual tax return
While it’s really important to be filing all of your HMRC obligations on time, be aware that the government has given a grace period, meaning you don’t need to pay anything for at least the next three months. This will definitely help your cash flow, and even more so if your year-end is in line with the tax year-end on April 5. This way you will know how much you owe to HMRC but you won’t have to pay it yet.
What’s your vision for Lime Hut & Coco Financial? How can we support your businesses?
The vision for Lime Hut is to eventually get a bricks and mortar venue. The way in which we do that will change between now and then, but I’m really excited for it to happen.
For the time being, I’ve set up a voucher scheme here, where you can get a Lime Hut gift card to spend when this is all over!
For Coco Financial, we built it out of a passion to help people understand their finances. We’re a family-run company with a heart and we genuinely care about people. We’re all about transparency and just want to see you thrive – that’s our vision. You can follow us on @cocofinancial on Twitter and Instagram and if you know anyone who can help build our website, let us know! Also, stay tuned with some online seminars with Money Moves and some quarterly workshops.
Follow @cocofinancial and @lime_hut_london on Instagram