Enjoy this week’s guest post from Ann Zack, a business owner and small business specialist, on how small businesses and entrepreneurs must “Adjust, Pivot, or Die.”
“I have not failed. I’ve just found 10,000 ways that won’t work.” Thomas Edison.
In the course of my business — which began as a cookie company in 2011 but fairly quickly morphed into a moonshine cake company –- I have found many ways that won’t work. I’m not at 10,000 yet, but then again I haven’t lived as long as Mr. Edison yet (he died in 1931 at age 84).
During the COVID-19 pandemic, we’ve probably all discovered many ways that won’t work. My husband and I discovered in a hurry that we had to adjust our previous business model: Prior to the coronavirus crisis, about 70 percent of our revenue came from fairs and festivals, from the Minnesota State Fair to huge summer street fairs in Michigan.
Our first show of 2020 was scheduled to be a seafood festival in St. Augustine, FL, at the end of February. A few days before we were supposed to hit the road, festival organizers called it off. And of course that was just the beginning; I’ve lost count now of how many events have been postponed until (at least) 2021.
As the weeks rolled by, we realized we needed to pivot: We couldn’t afford to rent an 1,100-square-foot space with good visibility. Our landlord wouldn’t reduce our rent, but she did let us out of our lease a few months early, and on May 1, we downsized. Our rent is now 30 percent of what it used to be.
As more weeks went by, we realized we couldn’t afford to keep making expensive monthly payments on our big cargo van. When we purchased our Ram Promaster three years ago, we were thrilled. We had been driving a little Ford Transit for several years but this new vehicle was in a different category in terms of space and comfort.
Since we don’t have anywhere to go in 2020, we no longer need space or comfort. Last month, we sold the van to a nice young woodworker, whose friends came out and oohed and aahed when we delivered it.
Instead of seeing our customers in person, we have concentrated on communicating with them via email newsletters and social media, and have experimented with different Facebook ad campaigns. The results have been gratifying; Website sales and profit margins are way up.
Our profit margins have also increased thanks to our decision last year to stop selling wholesale. At one point, our cakes were sold in 35 Whole Foods Markets in the Southeast, as well as dozens of gift shops and boutiques across the country. But when we took the time to closely examine all our costs, we realized that when we sold our products at wholesale prices, we were just spinning our wheels, working very hard for very little return.
It seems the longer we are in business, the easier it gets to adjust and pivot, in part because we know the ability to adapt is one of our biggest advantages as a small company. We’re no longer driving our Ram Promaster, a behemoth that was slow to react. We’re in a Honda Civic now, zipping in and out of traffic. We will continue to adjust and pivot, because we’re determined not to let our business die.
Ann Dickerson Zack is a small business specialist for the Tennessee Small Business Development Center on the campus of Cleveland State Community College in Cleveland, TN. She is the owner of Tennessee Moonshine Gourmet Products, a Chattanooga-based business that makes all-natural cakes, jams, barbecue sauces, hot sauce and honeys infused with 100 proof (legal!) moonshine distilled in Gatlinburg, TN.
You can find Ann here: Website, Facebook, and Instagram