Staying nimble during a pandemic
This pandemic has hit small business particularly hard. And so we wanted to check in with some of the makers who we’ve covered in this series and see how they're pivoting and staying resilient during this unprecedented time. You're going to hear from Lance Hanson of Jack Rabbit Hill Farm in Colorado, Jenny Yang of Phoenix Bean Tofu in Chicago, and Matt Weik of Yker Acres in Minnesota. We're also going to check in with Jennifer Marcontell, an Edward Jones financial advisor in Texas. She has some particularly relevant advice for small business.
The morning after the governor came down with the order to shut the restaurants, we got together. I've got four full-time staff up here on the farm. And so we just brainstormed for a couple of hours with some charts that I use to kind of map out our key activities, key resources, assets, those things. So just trying to figure out a way that we could repurpose what we have to making products for a market that was still alive, recognizing that 80% of our revenues disappeared overnight because we had always been focused on restaurants.
Well, I think that, in and of itself, the fact that in one moment, 80% of your revenue stream temporarily, semi-permanently, who knows what's going to happen with this, but just evaporated and you didn't panic. You kind of sat down and you said, "Okay, what pieces do we have to play with and how can we get through this time by being smart?"
In the beginning, first it's denial, "There's no way this is going to happen." And then some people just recognize the fact, "Wow, this is going to be crazy. This is going to be hard. It's going to be a tough time because orders disappeared." There's no orders at all. And then the employee doesn't want to come into work because their family member thinks they're risking their lives is not worth it. So it's just like all kinds of reasons, all kinds of things happen. That was just goosebumps still going through me right now, just by hearing everybody's concerns, stories and then how you continue to maintain a business to provide jobs, security for everybody and make sure their families are okay and they're okay.
I can't remember the day that our governor shut things down, but we were watching it from afar because Minnesota was pretty late to get cases. We harvest every week, every other week and we deliver that same week, the stuff that we'd harvested two weeks before that. We'd gotten deliveries and everybody was a little tentative, but we still had deliveries. Everyone was planning on life is normal. Then Wednesday of delivery week, the governor shut down restaurants and Friday was delivery day. I had already made everything, so it was 80% gone instantly. More than that, if you count the fact that I had to pay the processor. So yeah, it was pretty much night and day.
We were nervous for a while. We were trying to think about, we were planning with my team that makes the boxes and does our food truck stuff that we needed to take the boxes out of beta mode probably pretty fast. So the restaurants shut down on like Thursday or Friday. By Sunday, we had built a shopping cart on our website just took all that product that we... We had 200 pounds of ground pork that goes to a restaurant that uses it for all their sausages and stuff and pasties and different things, and we made a bunch of spaghetti sauce out of it to put in our boxes and then took out the things and we just improvised.
What was your process? When you sat down with your staff, which is a pretty small staff, but when you sat down with them, what did you go through to kind of get to the other side where you ended up making hand sanitizer, shifting to do retail box wines, you're going to be doing the glamping. How did you tee everything up so that you came out of that brainstorm session with actionable items?
So what we do, we have this thing here that we call a business model canvas that is just a way of drawing out your business landscape. So what it does is it's just a very simple represent- It's a way to simply represent all of the key building blocks in your business. Okay? This way of mapping out your business and what your key strengths are, your key assets, activities, resources, what your customer segments look like, it's a very effective way to get everybody on the same page really quickly. And by really quickly, I mean within a matter of minutes. That was the sort of the centerpiece of the conversations that we had on Tuesday morning - was looking at this business model canvas and really coming to an agreement on what those key resources and assets are, and then thinking in terms of, "Okay, what new and different products can we make with those things?"
So you mentioned that you have a $2,000 a week feed bill, is that right?
So, with this shift in your business model, are you able... Where are you? You're shifting from wholesale accounts to doing these boxes and prepared foods and you're working on staying nimble, but is that enough?
We've been really overwhelmed with the support we've seen so far. It's heart warming and things are going okay, but yeah. I just don't know where we're at yet.
It's frustrating because we don't qualify for PPP because we're sole proprietors, and the farm has a lot of depreciation that it can do. We pay ourselves by drawing from our account, but we don't write ourself a check. We still pay our taxes. But at the end of the day, it doesn't work out to the formula that they set up.
So I look at SVL, I look at PPP and the other resilient funds and also from Illinois state if they all has a lot of small business support resources was, so I've seen them all. I think that that's the best strategy. I spent all the time. That's why I have sleepless night. I get up three, four o'clock in the morning, just want to make sure I got my PPP submission entered. I feel like this is an opportunity for us to try something new as well because if the old channel didn't get to them, they disappeared. So how can we create a new channel to reach out to the same customer?
So we started e-commerce page. We are going to start a e-commerce page, and then we're going to have curbside pick up. We have working on the delivery services company to deliver our meal solution meals to them. We also, I think this is just a looking at the bright side that really forced us to face this as a different channel. If the existing channel, the old channel, traditional channel disappeared, and this is the way we need to create a new way to get out how to reach out and deliver to the customer.
So what kind of advice do you have for people, whether they're in the beverage industry or not? Any kind of small business owner, what kind of advice do you have to them to kind of help see opportunity or find opportunity in this moment?
I think that the, I can only speak from experience, I think that the idea of trying to think about your business in terms of kind of where your core strengths are, what are your key activities? What are the things that you do that you feel you do better than anybody else on a day-to-day basis and the key resources you have; people, equipment, technology, customer relationships, whatever those are? And start there in terms of imagining the types of things you can do with those that are outside the box. So not being so product driven, not being so sort of value proposition driven in the sense of, "Okay, this is what our identity is in the market today with this product that we sell into this customer segment." because in our case, that customer segment disappeared. I think there's opportunity for companies like ours maybe to come out of this even stronger.
Yeah. I think that's kind of the hope is that we can find opportunity in disruption. Disruption very often does create opportunity, but it takes that special kind of person to be able to look through the chaos of what's happening and say, "That's where I can leverage whatever skill set I have to be able to get to the other side and to try to find something positive in what's going on." I do feel like there are opportunities even in this really disrupted time, especially I think for small businesses because you're much more nimble than kind of a big business. So you can play around with ideas as long as you have the assets to be able to do that. It's a really scary time for folks, but I think the takeaway is that all is not lost. This too shall pass. The world might look different on the other side, but we're in this together and we're all kind of navigating this all at the same time.
We're not going to go back to the way things were, but hopefully, we can figure out how to take the heartache and the stress and improve the world because of it, change up our business models, change the way that we transact with one another and treat one another and come out the stronger for it.
This is an interesting time to see how people evolve, people rise up to the challenges and then as a team. It's not only me that I can “wow wow wow.” But people will listen to you, will people believe in you. It is not I motivate them single-handedly. It's their environment. They feel like they won't give up. They don't want to give up. They don't want to be sick at home or they don't want to be hiding from virus. They want to come out, do business as usual, whatever they can't. They will just put up to help us to grow continuously doing business. I think that's the part, the human part of it is really shines right now.
My little farm spends a hundred thousand dollars a year at minimum at our feed mill. We spend $40,000 at our farm fleet place. We spend a hundred thousand dollars on our processor. That money's never leaving a 30-mile radius. They're paying their employees. Their employees are paying... That's huge when you look at all these businesses coming together. I can think of 10 farms in my neighborhood that are doing similar things to what we're doing between vegetables and eggs and honey and maple syrup and sprouts. That becomes a real thing and it kind of coincides with one of our philosophies when we started our farm was making a difference through little changes.
It's just real wages, real human interactions, money staying in your community. We all are together. That's one of my great hopes of what comes out of this is that we get a big reset, priorities shift. A lot of people are scared. We're all scared whether we don't know what's going on or whether we don't know if we're going to have a paycheck or we're scared we're going to get the virus, but if we can set that aside and look at what we can do as we work to come out of this and how we can change things, I think out of tragedy can come a great rebuilding. We've seen it before in our country.
So just kind of generally, what are your maybe top two or three pieces of advice for people specifically in the small business sphere?
So the first thing that I always tell people to do is to look at what options are out there for lending, even if you don't need the money now because we don't know how long it will go. So look for funding, look for lending, look for options that are out there. Look for people you can partner with that will understand your business model and can help assist you with not just the day-to-day aspects of operations, and then really take care of your key employees. You've got to take care of the people who are helping your business run. They have to want to be there. They have to be engaged. They have to feel like they're part of it.
Our office, I've told everyone, "You can work remotely. You can all work remotely." And they still all drive into the office every day and all of us drive at least half an hour to get here. So they want to come to the office and be part of something that's making a difference. I think when they start really embracing their key employees and saying, "Hey, look. We're working together to make this happen. We can impact the rest of the employees." A lot of people are working with skeleton staffs, but still trying to hold it together.
Any final words of advice?
Be creative and stay optimistic. Right?
Absolutely. I think that's probably the best advice that you can possibly give just for life generally.