We at the Entrepreneur Fund share the greatest respect for every entrepreneur adapting to the pandemic’s constantly shifting toll over the last 19 months. Their effort has been nothing short of amazing. If you think about it, all – or most – of the items below have affected our small businesses:
• Forced shutdowns.
• Letting go of workforce.
• Researching, applying, investigating and accessing a myriad of relief programs.
• Short-term and permanent changes to consumer behaviors and demand.
• A total disruption of workforce: Bringing people back, losing people permanently and not being able to find workers.
• Major supply chain issues affecting product and workers.
• The biggest spike in inflation in 15 years.
So, if you’re feeling exhausted, it’s understandable. Stress and overwhelm are two of the ultimate risks for any business. I’ve had the fortunate gift of vantage point during the pandemic, in that we’ve worked with hundreds of business owners in close and personal ways.
So, what have been defining behaviors of those business owners who navigated the pandemic, their businesses and themselves relatively well? The following themes were collected from my observations over the last 19 months among business owners and our team of business advisors and lenders across the region, that I want to share for any still feeling stuck or considering what’s next.
Pause and keep your head up. I’m not talking emotionally but strategically. The best adapters kept their head over the horizon to pay attention to the constant change that was happening quickly. Many business owners put their heads down and get to work in times of crisis in the adage of “hard work.” This can quickly lead to burnout, exhaustion and helplessness. Some of the best navigators of the pandemic took a few pauses over the course of the past 19 months to analyze and make informed bets on what changes they thought would be (or, to their favor, they could make) permanent parts of their business. They made a few bold strategic changes to their business models or operations that put them in a better place. Examples include: narrowing product lines, changing service/product delivery, adding a new customer segment, or simply working the business around constraints (people, product).
Sustain your energy. Nothing will sap your willpower and energy faster than an emergent crisis, lots of decisions and uncertainty. It was interesting to see how so many coped and, admittedly, many said the shutdowns gave them the added space for personal time they had not had in years. My favorite quote was, “I took up yoga on a regular basis. It was great and probably ruined me as a business owner.” It’s more of a nod to how he sees his role now versus before the pandemic. Beyond this break in activity, many took the long view on their personal energy and paced themselves.
Get acquainted with your old friend – your numbers. Those who knew their numbers and how the pandemic affected them are thriving today. I wish I had a nickel for every time I heard, “My top line is slightly down but my bottom line is better than ever. It’s almost hard to believe.” They pinpointed key changes that gave them the biggest financial impact: What days restaurants would close, closing locations, eliminating products, or tweaking best products/services with new features. Additionally, with so much COVID-relief funds available, in the form of debt, they knew how much they could or wanted to take on.
Find ways to tackle labor issues. There is no one-size-fits all on this as it seems to hit everybody in different ways. For example, a lot of our professional service providers that are tech-enabled used to have all their workforce in the region. Almost overnight, they were competing nationally and on a much higher level than ever before. Northeast Minnesota tech wages must compete across the country because location no longer matters – that industry was partially remote before and many are fully remote. There are a few strategies that we have seen:
Reduce the scope of the business. Closing the least profitable shifts and locations to use their staffing at peak times and maximizing sales and profitability where possible.
Improve the quality of their jobs. Growing wages, adding flexibility, increased benefits, more career-track opportunities and more. Owners make sure they keep their good people and step up their game on retention and growth. Re-worked business models and continued demand for products/services has supported this.
Rework production or service delivery to minimize people constraints. Finding every possible way to eliminate the need for people in their processes. Examples include multi-location restaurants moving all food prep to one location, making major investments in automation equipment, and pushing customers to do parts of the fulfillment process a staff person used to do.
Finding alternative workforces. This one has been interesting. We have seen a series of small acquisitions just to acquire employees. A growing interest in the H-2A and H-2B visa programs is on the rise for those industries that completely lost their labor forces and are getting few to no applicants.