Since opening in 1929, Cavan Bakery has seen a lot of history: it’s been baking bread, cakes and pastries through the Great Depression, the Second World War, two coronations and a global pandemic.
For the next chapter of its story, the owners have now invested £1.5 million in a purpose-built, 1,400 sq m baking facility – three times the size of their original site.
The move has had tangible benefits for the business, says managing director Jeff Greenall. He is married to Sarah Cavan, whose grandfather David was the original founder of the company.
She and Greenall took over in 2000 and now run 13 shops (and a café) across southwest London and Surrey, employing 180 people and making more than 80,000 products a week.
After Greenall started turning down orders, he knew he needed to do something. “There was no way our existing premises could have expanded much more,” he says.
“We were bursting at the seams. We’d had to give up some business because it was too difficult to bake, pack and deliver everything from the old bakery. The workflow was terrible; it was all very disjointed.”
He gave the go-ahead on the new site in November 2020 and, two years later, Cavan Bakery moved into its new home in Walton-on-Thames. There have already been significant improvements in productivity.
“Now that everyone’s under one roof, we’re able to move staff around for efficiency.
As an exclusive poll finds that nine in ten SMEs say improving productivity is key to growth, getting the right support can make all the difference – as one southeast bakery chain discovered
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“Everything’s temperature controlled, we’ve got room to pack things properly and we don’t make the mistakes we used to. We’re much more efficient in terms of getting products out of the bakery quickly.”
Taking a step back and identifying opportunities to invest in efficiencies and growth can be difficult for small business owners who are immersed in the day-to-day running of a business.
But most recognise the need to do just that. An exclusive YouGov poll of more than 1,000 SME decision makers, commissioned by Lloyds Bank together with The Times, found nine out of ten of those polled recognised the importance of improving productivity to grow.
David Atkinson, Lloyds Bank’s UK head of manufacturing for SMEs and mid-corporates, says he has been impressed by how agile and innovative the sector is, despite the challenges it faces.
“When an SME is investing in a new bit of kit, it has to know that it’s going to work. If it doesn’t, that can be catastrophic for the business, the family that runs the business and the local community.
“So they have to be very careful when they’re making these decisions to innovate or invest in a new plant and machinery to improve productivity.
“At the same time, if they don’t invest they lose sales. They’re constantly walking a tightrope of opportunity and risk. It’s a tough gig and they need more help and support.”
Atkinson says that investing in productivity can provide a real competitive advantage, even in tough economic circumstances. But it needs to be carefully thought through.
“SME owners need to be bold but also sensible about the level of finance they might consider taking. And watch the cash – profitable businesses can fail if they run out of cash to trade.”
For Cavan Bakery, the best thing about the new site is the capacity it provides for the future. “We have the space to add 50 per cent to our production,” Greenall says.
The business now runs more sustainably, by minimising the amount of power and water used and moving from old gas ovens to modern electric models. It’s also been good for attracting and retaining staff, which has become challenging.
Research source: YouGov, sample size 1,058 SME senior decision makers, survey dates May 2-9, 2023.
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Almost one in five want to improve processes and systems to increase productivity but only 33 per cent think there’s enough financial support for SMEs to fund productivity and innovation.
Cavan Bakery wouldn’t have been able to expand without the financial support and guidance of Lloyds Bank. “Up until a few years ago, [our relationship with the bank] was a fairly transactional process,” Greenall says.
“But having the support of the bank gave us security when we decided to move the bakery. It was a massive decision.
“Even when it got a bit tricky and the costs went up, I always felt that Lloyds Bank had our best interests at heart and they weren’t suddenly going to pull the plug.”
“It’s a selling point. The old bakery was very hot in summer and wasn’t always a great place to work. Now it’s all temperature controlled and there are nice changing facilities.
“It’s good to be able to show potential wholesale customers around the bakery too. It’s really impressive.”
Greenall hopes to add at least another three sites over the coming year and sees no reason why expansion won’t continue now the production infrastructure is in place.
“There are always reasons not to do things,” he says. “There were a lot of people, even within the business, asking whether we could afford it. It was a big risk.
“But if you’ve got a good idea that you’re passionate about and believe in, you’ve got to give it a go.”
of SMEs polled think improving productivity is key to growth
90%
