COVID-19 has presented problems for businesses faster than any economic problem since the industrial revolution. Unemployment has reached all time highs and US GDP has contracted for the first quarter in over a decade.
With customers disappearing from retail establishments and mandatory lockdowns covering much of the globe, entrepreneurs in many industries have found it necessary to innovate their business. As Plato once said “necessity is the mother of invention” and as we’ll see, many entrepreneurs are using this crisis as an opportunity to gain marketshare, change their product or service and find a new way to reach their customers.
Industry experts share how COVID-19 has presented problems and opportunities for their sector.
We asked a panel of established mid-market businesses how they are holding up during Coronavirus. Are they cutting costs, taking advantage of lending options, or pivoting their business models? Also, what tips can they share that our readers may be able to implement in their own business.
Thanks to Smallpdf’s online tools that give everyone around the world easy access to PDF problem-solving wherever they are, the company has seen a steady uptick in subscribers since coronavirus began making headlines. ‘This makes it critical for us to not slow down our hiring process, but to recruit as effectively as we were before,’ says Carlota Alcázar, People Manager at Smallpdf. ‘Except under the exceptional circumstances posed by a
pandemic like coronavirus, our hiring process has adapted to include additional online meetings with the candidate, instead of an on-site interview, where we can still readily gauge the applicant’s job aptitude, affinity for problem-solving, culture fit, and passion for getting things done.’
While onboarding still represents a challenge during a time of critical social distancing, Smallpdf is geared to welcoming newcomers 100% remotely. ‘Of course this isn’t ideal, but under exceptional circumstances, we must be prepared to do things differently if we want to be exceptional,’ Alcázar remarks, concluding, ‘Remote Smallpdf newcomers instantly feel at home with us, even from a distance, because we ensure they have the infrastructure and support they need—and a vibrant new family around the world ready to welcome them home.’
“We haven’t done anything different during the CoronaVirus, but we certainly have eliminated a lot of waste within our organization. Everyone that we hire is on a contractual basis, therefore we only pay someone when we need their services. We have also negotiated rates with the business software that we use and and have kept our customer service costs to $0. All of these strategies together have helped us maintain a lean, profitable business during this crisis.”
Horderly is a professional organizing company with a staff of 30 employees across 7 states, and before COVID 19, we worked with clients in their homes to help them get organized. In the past few months however, we have pivoted and completely changed our business model. As clients were forced to cancel in-home organizing appointments and we lost over 2,000 billable hours, we developed a new way to take care of both our clients and our employees: virtual organizing.
Virtual Organizing is just like in-home organizing, but it happens through a FaceTime call or Zoom meeting. Our pros coach clients through every step of our 11-step process, provide tips on organizing, and even place product orders for clients who need new systems to keep their spaces organized.
Out of this nimble change in our model, and the hours that the PPP has provided for our employees, has come great growth for Horderly. We’ve built a new revenue stream, we are now serving a worldwide clientele and team morale is at its absolute best.
I believe other businesses could benefit from focusing on things they have control over! We are taking this time to fortify the foundation of our business. Our operations team, who are usually busy with booking logistics, are now focusing on things like client retention and employee training.
“We aren’t the biggest team here at Marygrove, we have around 50 staff in total working for us in a number of different departments. We specialize in
Awnings for customers that want to improve their home decor and enjoy an outdoor space no matter what the weather. We haven’t used any business
lending options, although business has declined over the last few months, we are optimistic for the future as we put our focus on finance options for
customers. Therefore we can look to begin works as soon as possible, with the customer paying the total amount over a number of years. We have also
increased our online presence to engage with the customers and attract new business. I’m glad to share that we are doing amazing work and as a team,
cannot wait to get back into work.”
“At I Heart Raves, We’re curators of all-over print clothing and world leaders in festival fashion. We currently gross about $30M a year and have been featured in the Inc. 5000 six years in a row. Our founder and CEO, Brian Lim, was featured on ABC’s Shark Tank and received a deal from Mark Cuban & Daymond John.
Our eCommerce store is in a very challenging position because we sell fashion items to attendees of music festivals. These events are being canceled or postponed all around the country and even throughout the world as the Coronavirus spreads. We have been preparing for a potential recession for multiple years now, and thus have cash built up to withstand a huge revenue hit. But we did not plan for a health crisis on top of a financial crisis.
As a result, we are pivoting in a couple of ways. First, we are shifting our marketing from mostly festival clothing to focus now on other uses of our clothing such as lingerie or loungewear. Second, we’ve started designing face masks and for each mask that is purchased, we will be donating one non-printed face mask to nonprofits supporting those on the front lines. We are receiving thousands of orders and are excited to help anyone we can! In fact, we just donated 10,000 masks to Providence Little Company of Mary Medical Center – San Pedro last week!
If your business is suffering, think critically about how you can pivot in these uncertain times. The economy won’t stay shut down forever, and pivoting can help you weather the storm and keep your business afloat until things return to some sense of normalcy. These pivots can turn into permanent revenue streams. Even when COVID-19 is gone, our masks will still be purchased and used by festival-goers to protect their faces from dirt, dust, wind, and sun while staying fashionable at the same time.”
“Jam paper company has adopted a work from home policy for the last few weeks, and it has been pretty successful as far as maintaining productivity. We each have a phone call with our team leader in the mornings, to discuss what we are aiming to accomplish that day. We also remain in contact throughout the day via email and Slack just to correspond or ask for help if we need it.
At the end of each day, we send daily updates to our team leader detailing the tasks we completed for the day. This way, it can be documented and everyone can make sure we’re staying on top of everything. It is important we maintain business as usual, because as an e-commerce company, we serve our customers fully online and through delivery. Switching to work from home allows us not only to maintain our safety as employees, but to make sure that our customers are served without missing a beat. We all have had the option of direct deposit since even before the pandemic, so contactless payment is something that benefits us in an even greater capacity now.”
“Vejibag is a small, family-owned and operated North Carolina-based business with 5 employees and total revenues of $415K in 2019. We’ve been in operation since 2013 and manufacture and sell organic cotton vegetable storage bags which keep produce fresher longer than plastic. To date, while the wholesale side of our business has ground mostly to a halt, direct sales via Amazon and our own website have stepped up considerably. We’ve been growing rapidly over the past few years and, as expected, our gross sales have increased. This is due, we believe, to customer’s increased interest in food preservation, so as not to waste money in these uncertain times. Also, prior to the pandemic, we contracted with an outside social media marketing person to help drive more online sales.
While our cut-and-sew facility has been able to keep working with a reduced staff, such that we have maintained moderate amounts of inventory, it is uncertain how long this will last. We also have a supply chain disruption that threatens to stop or slow production. And we’ve had to limit our order fulfillment to one day per week due to limitations with our fulfillment contractor. So we are sober about the future, and our ability to grow, even if there continues to be increased demand for our products. While at the first of the year we’d begun to hope that we might see our first million-dollar year in 2020, there’s no telling how the months ahead will play out, as the effects of worker health and economic slowdown ripple outward. We’re hoping we’ll be able to pick up where we left off and see renewed activity on the wholesale side.
Wish us luck!”
“Authority Hacker is a small, online one with less than 10 employees. Due to the nature of our work, and the fact our team is already fully remote, the effects of this crisis haven’t had such a huge up front Impact on our operations, but that’s not to say we haven’t felt the ripples throughout the business.
We have managed to keep our core full-time team of 6 people in work but what we’ve also been trying to do is ensure all the various freelance workers that we employ are kept with work. This covers various aspects of the business such as design, programming and writing.
What is important for us at the moment, however, is to focus on the things that will still make a difference during this downturn of sales and profits. This means focusing on under the hood tweaks to the business. We’ve used this as an opportunity to review aspects of the company that have often taken a back seat to sales and marketing activity. For example, we’ve worked on numerous customer support initiatives as well as improving the overall presentation of our site, fixing up those areas that never seemed that important.
On reflection, this has been a great opportunity for us to take stock of where I company is at, look at how we can bolster it and make our processes even more efficient and really focus on that aspect of the company without the constant pressure of needing to make sales – something which is currently beyond our control.”
“To keep their business afloat during the global pandemic, bars and restaurants must now look for alternative ways to keep going. A Warsaw-based gourmet confectionary, Deseo, was able to expand into new markets without investing in new technologies and paid advertising, they leveraged an engaged community and free Facebook tools to boost their sales during challenging times. What they do is publishing their menu on Facebook and asking users to comment on the post with the word Order. Any user who comments on the post using the trigger word will receive an automatically generated private message walking them through the process of placing an order. Not only does this tactic help users make quick purchase decisions, but it can also help restaurants tap into new audiences through the power of viral reach. If an individual user comments on your post, the post will appear in their friends’ feeds. And so, the business is booming.”
“I started a global branding and marketing firm 19 years ago in Cambridge, MA. I am very concerned about the spread of this virus and the short and long term impact it will have on the economy. We have had a few delayed projects but no client has been lost yet but projects have slowed, everyone is still on board knock wood.
For professional service firms like mine we will recover even if our revenues slow from the crisis. The biggest change for me, my team and my clients from the virus so far is the shutdown of all networking events, travel and conferences. Spring is typically a very busy time with many events, trade shows, business meetings on the road, etc. and for the past few months everyone is staying put and meeting virtually instead. I have had more Zoom and Skype calls in the past 15 days than the prior 6 months! Pivoting to online meetings, webinars, etc. is a smart and productive way companies can continue to have conversations that educate and inform, build relationships and move forward during this crisis period. So first and foremost I have learned to help small businesses to be flexible and open minded so we can keep working together during the crisis and create more flexible capacity going forward over the next year as the economy reopens. If small groups on the team want to talk through specific issues (managing anxiety, kids, parents, etc.) virtual coffee meetings online have been helpful too. A few colleagues have even met online after work for virtual happy hour/beer/cocktails as well when they had more time to chat.
I did not apply for PPP and do not think the government bailout will fix this crisis so an idea I am sharing with my community is to look at all the groups we are a part of (industry, trade, neighborhood, alumni, women, hobby, religious, non profit, etc.) and suggest we start our own stimulus packages by agreeing to support/buy from each other directly and refer business proactively to each other too. Cross promote the products and services in newsletters, follow/like/retweet on social media and vice versa. Whether you need to buy food, a book or a gift, office, supplies/equipment, update your website, or create a video there is probably someone in your network who is more than happy to get the business right now. You can always buy gift certificates from them too which is thoughtful and very much appreciated in times like these. I bought a few from my favorite local restaurants in fact to use when they reopen. The corner store would probably even carry out your bag to your car if you called them and said you needed some cereal, milk, candy and lottery tickets if you asked. Help your neighbors and network thrive and we will all get through this together stronger.”
“To avoid unnecessary exposure to the coronavirus, we have begun to wholesale houses virtually in Atlanta, which is where we also live. Our normal business model is to meet with homeowners face to face and holding open houses for flippers and landlords to see the property.
Now, we are buying houses over the phone. We are having the homeowners send us pictures and videos of the properties. We have a list of specific things we like to see in the video, such as the mechanicals, the kitchen, and the bathrooms. The biggest struggle with this approach is that most homeowners don’t have the same experience with creating quality videography content. Their content tends to come out a little worse than we would like to really showcase the property. They also don’t have the same processes set up to make content management easy. We use Google Photos to easily share content with our team. A lot of times, we are having to walk the seller through how to set up Google Photos, upload content, and share it with us.
The buyers like seeing these tours. In the current environment, no one wants to go outside unless it is necessary. These tours allow buyers to filter through properties without having to spend time going to them and risking exposure. A lot of buyers feel more comfortable seeing the property before making any purchasing decisions. On properties where we cannot accommodate getting buyers into the properties, we have been seeing that those properties are harder to sell and they suit on the market.”
“We all know how difficult and painful these times are with the spread of the deadly disease. Coronavirus (COVID-19) has spread in an unprecedented manner throughout the world. The impact is not only felt by the general public but throughout various sectors and most importantly travel industry.
It has been a challenging time for various organizations and companies as they’re hiring, and the recruiting process has completely stopped. Personally, my company has recently announced that no more employees will be hired for the next four months due to financial loss and economic slump. We are told that due to coronavirus, several of our projects have been canceled or stalled. We are all giving our best for the company and are willing to dedicate more hours of work.
Fortunately, We all are financially secure as our employers had made sure of our salaries and other expenses. Several other competitors are also facing similar kind of problems and most of them have stopped their recruitment procedures for several coming months. Hopefully, everything will get back to normal. That’s all we can and should hope.”
What we learned (Business strategies and takeaways)
As most entrepreneurs and business people have already come to understand, there is more than one way to skin the cat in business. There is more than one way to build a successful business, and more than one way to survive or thrive during a recession.
For US based businesses that have had to close their doors, the payment protection program seems to be a solid program and they have been able to get cash into the hands of business owners and employees faster than anyone thought possible. While this will only help bridge the gap, businesses with real estate, full-time employees or other fixed costs can greatly benefit from the cash it can provide.
Some business owners have found success in pivoting their service business to a digital model. While this may not be ideal for home service businesses, it may be a good option for traditional retailers to take their products online and for education companies to adopt Zoom classrooms as the new norm.