Navigating through Covid as a small business owner

44% !

It’s Monday 2nd March 2020 and I am at my office running numbers for February for my businesses. I am feeling pretty good - YTD revenue is up 44% overall - 47% at one business and 41% at the other versus the same period in 2019. We had fixed a bunch of things last summer (mainly staffing and marketing related) and now had both our Waxing and Blo businesses humming along as we finished up our 3rd year in business. I was also busy working with the franchisees I support for Blo - three of whom were working on new locations, expecting to open during the summer of 2020. What could possibly go wrong ? Well of course we all now know the answer to that !

By way of quick background, my wife and I are based in Charleston, SC and own/operate a couple of franchises in the beauty space - Blo Blow Dry Bar and Waxing the City, and with the former I am an area developer. I made the leap to small business owner from a long banking career in 2016. I am also now a Franchise Consultant / Broker... but that’s giving away a bit of the story to come ! I have published a number of articles on my journey into business ownership, and a number of people have said we look forward to hearing how you are navigating the Covid crisis... so here it is !

Lockdown

By the second week of March all conversations seemed to revolve around Covid. Our Blo business was seeing the impact as Charleston destination weddings were cancelled left and right, knocking the heart out of the peak spring wedding season. While the numbers in South Carolina were low, we took the decision to close both businesses on 21st March - while SC didn’t require salon businesses to close until 1st April, it just felt like the right thing to do from a PR perspective, as well as health of staff and to manage costs. 

What a strange time - I drove to NYC to pick up both of our kids who were living and WFH there to bring them home, driving through a deserted Times Sq. Then we all hunkered down in SC - days full of zoom calls and dinner together - what a novelty. What about the businesses - well it was full on crisis management mode - my time in banking and managing a business through the 2008/9 crisis definitely helped. I saw a lot of people in panic or denial mode for much of March/ early April, but I think I was able to get my mindset focused quickly. One thing I learnt in 2008 was over communicate - whether that is with staff, customers or other stakeholders. We did that for sure in March and April:

• Staff - we furloughed our entire team when we closed. A really difficult decision, but softened by the pandemic unemployment assistance (which became a real problem for many businesses on reopening and still is at the time of writing). We worked long and hard to help all of our team navigate the nightmare that was the state unemployment system - doing all we could to help them get benefits flowing. We also held regular zoom calls with each team to keep engaged. I think these two things definitely engendered some loyalty and helped when we reopened. 
• Clients - we got into a rhythm of texting with our best clients - rolling appointments forward etc. It felt like they appreciated it, and it payed off when we re-opened.
• Landlords - again communicate, communicate, communicate… and don’t send in the rent checks. The communication paid off, as we got rent deferred, which certainly helped cash flow. 
• Franchisors - They say you see true colors in a crisis. That was true with our franchisors. One (whose favorite color is pink) really stepped up - providing fee relief and really communicating well with their franchisees. The other… well not quite so good - some fee relief was forthcoming eventually… but not without lots of pressure.
• Fellow franchisees - I spent a lot of time talking with other franchisees, both in the systems I am in, and also in other network/mastermind groups. Some of it was “Group Therapy”, but overall it was tremendously helpful to compare notes with others as we all tried to navigate the unknown.
• Vendors - we approached all vendors - some helped, some didn’t. You certainly discover who your friends are in a crisis !

To PPP or not to PPP

We spent many hours in April trying to figure out what to do with regards to the various government support programs - PPP, EIDL, ERTC…. alphabet soup. Initially, we stepped aside from the cavalry charge for the first round of PPP funds - we had no visibility to a re-opening date and it looked like the tax credit program might actually be a better bet. We kept a close eye on PPP, and as South Carolina started to re-open in May, we tapped the 2nd round of PPP for one of our businesses, and then as the program got restructured, making forgiveness easier to achieve, we tapped it for the other business. Now the focus is on ensuring we get full forgiveness. We also tapped EIDL’s as well - while I hope we won’t need the funds, I am a firm believer that its easier to raise funds when you don’t need them, then when you do !

Don’t let a crisis go to waste !

When lockdown started, after the initial shock and too much wine and cheese each evening, I resolved not to waste the time. I had been thinking about starting a new business, as a franchise consultant - leveraging my experience of transitioning from the corporate world and owning/operating franchises, to help others considering a similar move. I decided to partner with an existing very experienced consultant, and jumped into training/set up in late April, and was ready to launch the business by the end of May. 

Re-opening

By the end of April, it felt like we were tuning into daily press conferences by the SC Governor - will he or won’t he allow close contact businesses to re-open. We began planning for safety requirements - knowing we would have to be able to ensure staff and customer safety. This meant getting creative with sourcing masks, sanitizer etc, and once re-opening was allowed, ensuring our teams were appropriately trained in revised procedures. Not everyone came back - its clear that the pandemic unemployment payments were a huge dis-incentive to return to work, as it effectively gave a claimant $23 per hour, assuming full time… and much higher effective hourly for someone working 20-30 hrs per week. 

The first week back for the Waxing business was a record week, despite extending service times to allow for extra cleaning etc - great credit to the team who coped with everything admirably. From day one we required all staff and guests to wear masks - virtually all guests were happy and acknowledged everything the team were doing…. a few objected to masks and we ultimately asked them to take their business elsewhere. 

Whats the latest ?

So we re-opened 18th May and predictably Covid case numbers spiked in June / early July. At the time of writing (and I know this is tempting fate !), non of our teams have tested positive and we have continued to ensure safety protocols are followed. It’s been a grind from a results perspective - Blo down by c. 20% vs the same period last year (not surprising given cancellation of weddings and events) and Waxing down by c.15%. It has slowed noticeably in July/early August vs June. I think its clear - for any business providing services to consumers - be that beauty, fitness, or restaurants - its going to be a long road out of this. Many won’t make it - we fully intend to, and also expect there to be opportunities… but not just yet - right now patience is a virtue. Focus will reman on rigorous cash flow management, which in this environment means greater focus on managing expenses vs spending to drive revenue. 

My Franchise Consulting business has gotten off to a good start. It’s clear that lockdown has caused many people to reflect on what is important to them and also think about future career / business aspirations. Currently having great conversations with / helping a number of individuals think through if business ownership makes sense, and if so, helping them find the right franchise. 

What does the next 6 to 12 months look like ?

Who the heck knows !. There are people out there confidently predicting one thing or another - I am calling BS on that… because none of us truly know what the next 6-12 months will look like. So how do we prepare as business owners ?. Well I think its back to what I said above - it’s all about cash flow preservation, being patient and keeping a keen eye out for opportunities. For those thinking about getting in to business right now, depending on the sector its potentially a great time - many service segments (both B2B and B2C) are doing well. Even in segments that are struggling right now (in particular bricks and mortar centric businesses), there should strong opportunities over the next 6-12 months as there will be great lease deals to be had and business models will be tweaked to adjust to this new normal. 

If you are reading this and thinking about making a change, don’t hesitate to reach out to me on LinkedIn - I would love to speak with you. 

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Jeremy Bollington - Franchise Broker / Consultant / Coach - Your Franchise is Waiting

I help individuals explore and navigate the world of franchise ownership. If you are in transition or just tired of the corporate grind, if you are already a business owner and looking to add another business or if you are returning to the workforce, but don't want a 9-5 job, I can help you find the right business fit for you.

I made the transition in 2016 from a long corporate career to business ownership (I own / operate two franchises in the beauty space) and now I am using that experience to help / guide others considering business ownership 

Contact me at:     [email protected] / Cell: 973-908-1807