Deciding on a career as a business owner – even at the best of times – can be a stressful undertaking.
For those who launched their small businesses earlier in 2020, those stresses were even more magnified. A Statistics Canada report from May said 60 per cent of shops with one to four employees reported first-quarter revenues down 20 per cent or more from the same time in 2019.
But new businesses’ abilities to quickly pivot has been a saving grace.
“Once we put this in motion, nothing was going to stop us,” says Justin Dumitrescu, the co-founder of Sheep Black Wine, whose premium canned California wine brand, stel+mar, launched in late April.
“The ability to be able to adapt and be nimble is extremely important right now. More than that, you need to trust your instincts.”
Luckily, Mr. Dumitrescu and his co-founder Chris Noll had already made sure they had ample supply in the country before the U.S./Canada border was closed in March.
“If our timeline was to launch three to four months later, I’m not sure how we could have done it,” says Mr. Noll.
Their launch was still impacted. Stel+mar was supposed to have a robust marketing campaign, with billboard advertisements posted in Toronto’s downtown core leading into the May long weekend. But the co-founders pulled that idea after realizing the number of people going to work and visiting Toronto had dropped significantly.
Instead, they pivoted to a digital influencer strategy and hired workers to bike around Toronto and hand out samples of stel+mar and Good Sunday – a canned gin soda that Mr. Noll is an investor in.
Good Sunday launched in April, founded by two childhood friends and first-time entrepreneurs. Christian Karayannides, one of the co-founders, says being able to adapt quickly has been the key to their early success.
“There was a gap in the category and we found our avenue and stuck with it,” he says. “If we have an opportunity, we can make decisions in minutes. There’s no big checklist to go through.”
The same was true for Juliana Graf, Andrew Chatham and Lizzie Chatham, co-founders of Heartbreakers Pizza and Wine. The Ottawa restaurant opened its doors in March, on the same day the first confirmed case of COVID-19 was reported in the city.
Ms. Graf says the pandemic has caused the team to make decisions at an “insane” pace.
“There is just so much going on that needs our attention that we were hoping we’d try to get to in the first years,” says Ms. Graf, “not the first five months.”
At one point Ms. Graf had just $27 left in her bank account after the restaurant’s initial renovations. But six months after opening, she says the restaurant is “doing okay” financially, thanks to community support.
Still, the restaurant industry as a whole has been ravaged by COVID-19. Ms. Graf says in speaking with other restaurant owners in the city, “nobody is making money,” but they are all doing what they can to keep going.
“You have to do what’s necessary to make the numbers work,” she says.
The co-founders couldn’t have known it at the time, but they are “very thankful” to have opened a pizza restaurant, since it’s an ideal food for delivery and takeout. In fact, the whole restaurant was renovated again in July, with 14 seats removed, to be more efficient and less focused on eating in. Waiting for it to open for 100 per cent dining capacity was “not an option,” says Ms. Graf.
While businesses do start during a recession, there are obviously fewer of them, says Ted Mallett, the vice-president and chief economist at the Canadian Federation of Independent Businesses.
“There are a whole new set of consumer demands out there and there are new opportunities for (new) firms to take advantage of these,” says Mr. Mallett. “They can pivot faster than businesses that are in a track already and unable to shift.”
That’s not to say all 2020 startups are doing well.
Chris Habets incorporated Good Habets Inc. on March 2. His Ottawa-based company helps businesses reduce their energy consumption through an energy audit and follows up with engineering work to help the businesses save on energy costs.
After getting laid off in January, he did all the legwork for Good Habets over the following few weeks and pressed on in March, despite COVID-19 starting to rear its head worldwide.
“There was a mistake there,” he says with a chuckle. “An energy audit I would put below literally everything else a company was working on at the time” in terms of priorities.
Mr. Habets pressed pause on his business not long after it launched, with his young son out of daycare and his wife still having to work in an office. The biggest lesson he learned from the pandemic was that starting a business is all about selling, and it’s difficult when you can’t go do that in person.
But he says he’s optimistic things will pick back up again.
After being laid off from his previous job, Mr. Habets says he was prepared to go six to eight months without any income at all. “This has delayed things, but hopefully I’m able to pivot along with the current situation and make some revenue at some point.”
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