As cities and states begin to reopen and restart their economies, businesses need to start thinking about what they need to do when they reopen. Many businesses have already had to shift their business models in order to stay afloat during stay-at-home orders, but that doesn’t mean these pivots have to be a short-term thing.
For East West Bank client Sugarbird Sweets and Tea, catering and selling their scones, sweets and teas wholesale to cafes, restaurants and hotels comprised 95 percent of their business. Once the stay-at-home orders were issued, their catering orders were cancelled overnight and their wholesale clients started going away one by one.
“Within three weeks, we were down 95 percent of our revenue,” shares Kei Okumura, founder and owner of Los Angeles-based Sugarbird Sweets. “We had to quickly pivot to support and provide our services to consumers, direct.”
Sugarbird Sweets has offered online ordering for individual consumers for a while, but, with their catering and wholesale revenue diminished, it is now their primary focus. “Everything is online,” Okumura says. And because their focus is all on digital orders, she knew they needed to upgrade their platforms and shipping logistics to better serve their current and future customers.
“We are seeing that small businesses specifically are using this time to really get focused and figure out, you know, what can we do to continue to make money to survive this pandemic?” says Amanda Brinkman, producer of Hulu series “Small Business Revolution” and chief brand officer at business solutions company Deluxe. “And what can we do to tighten our business plan and drop any distractions? Those are the small businesses that are really honing in and surviving right now.”
Here’s how you can turn your pandemic pivot into a long-term value-add for your business.
Given how rapidly the business environment changed, many businesses had to pivot almost overnight. That being said, these business pivots can highlight untapped customer bases that can turn into future avenues of revenue.
“Are there ideas you can implement now, and are some of those ideas things that will lead to growth on the other side of this that will stay with your business model after?” Brinkman says to ask yourself. “Are there customer bases you haven't been serving before, or delivery methods you have not been utilizing before, that not only right now would help your business survive and thrive, but that could actually be very beneficial to your customers and to the health of your business?”
Especially for businesses in the food and travel industries, finding new customers has been tantamount. Since restaurants can no longer offer dine-in services, some have turned themselves into mini grocers to earn extra revenue and sell their food stock. Restaurant suppliers and food distributors, who can no longer count on restaurants to purchase their goods, have pivoted their operations to sell to the public. Some hotels have even started turning into temporary health care facilities.
Although the pandemic has been tough on many businesses, Okumura sees the sudden need to rapidly figure out and improve their online presence as a push towards growth. “I think it’s a good thing—I think it’s a great thing,” Okumura says about going online. “If I could ship this nationwide with hubs across the nation, so I can do two-day shipping to New York or to the Midwest, that would be fantastic.”
One way to access a new customer base is to rethink how you can offer your goods and/or services. For service-based businesses in particular, doing so can be a lifeline. Since many states are still under stay-at-home orders or are only allowing select businesses to reopen under strict guidelines, many nonessential service-based businesses like hair and nail salons are struggling. In these instances, Brinkman suggests thinking of ways to repackage your expertise and services in ways that people can take advantage of at home.
"Are there ideas you can implement now, and are some of those ideas things that will lead to growth on the other side of this that will stay with your business model after?"
Brinkman uses Totally Hott Salon in New York state as an example. When they received lockdown orders, they could no longer service their clients, but quickly thought up another way to take care of them—by providing at-home root touch-up kits. Customers could order customized hair coloring kits on the salon’s website, and then schedule a virtual appointment with one of Totally Hott’s stylists for when the kit arrives.
“Most small businesses started because you have an expertise or a passion, so you want to continue to be able to bring that to your customers,” explains Brinkman. She adds that, since these are difficult and uncertain times for the customers as well, it’s helpful for businesses to think of ways they can make their customers’ lives a little bit easier. Whether you’re a hair salon offering relatively simple at-home touchup kits, or a boutique gym offering online classes for free or at a discounted rate, these methods not only serve as a value-add for existing customers, but can also be a great tool to generate new business.
Sugarbird is known for their unique scones and tea, which were often used in more formal afternoon tea services at their catering gigs and the various hotels they sold to. “We decided to come up with our mini afternoon-tea-in-a-box delivered to home,” shares Okumura.
It started when someone living in San Francisco reached out to Sugarbird about getting tea packages and scones for a virtual tea party she and her friends were having. Okumura realized that this was something people wanted and could use as an excuse to connect with one another. “That was the catalyst,” says Okumura. “We’ve been doing tea packages and afternoon tea for so long, we’ll just condense it. It’s not going to be like the catering sizes, but at least we can provide it and ship it.”
Sugarbird launched their afternoon tea sets on Mother’s Day and received such huge demand for it that they ran out of everything. Although there were a few shipping issues that needed to be figured out, the response to the afternoon tea packages—which include mini Sugarbird scones, Sugarbird loose teas, cheeses, jams and clotted cream, etc., packaged in a bento box and wrapped in hand-dyed Japanese shibori cloth—was extremely positive.
“It was a big lesson for us,” admits Okumura, “but we realized it was such a huge niche, that we want to expand it into Father’s Day, birthdays—any opportunity that people want an excuse to get together during this time.” Even after lockdown is over, Okumura believes that they can keep doing these types of tea packages, in addition to their usual catering gigs and wholesaling.
Brinkman is a firm believer that if a business incorporates “doing good” into its strategy, they will ultimately find success and new avenues of revenue. She uses Good Apple, a grocery subscription company based in Austin, Texas, as an example.
Brinkman explains that Good Apple partners with local farms to rescue produce that would otherwise have gone unsold and deliver them to customers’ doors. To help combat COVID-19, they decided to offer free delivery and food to at-risk groups—seniors and those who are immunocompromised—who were in need of food assistance. As a result of the positive coverage of Good Apple’s COVID-19 efforts, the company was able to grow their customer base.
“Deluxe has started a GoFundMe page so our audience can support the good work these businesses are doing within their communities,” says Brinkman. “Good Apple has seen new paid subscriptions come in, as a result of the great reach they have been able to achieve by following their instincts and doing good in giving away these produce items to the elderly and immune-compromised.”