There’s no denying times are tough for small businesses, but innovation has helped a number of enterprises get ahead of the curve.
From cafe home deliveries to online yoga classes, they’ve thought of creative ways to keep their lights switched on while the nation hibernates.
“We’ve seen that the businesses who are really turning their fear into motivation are the ones that are coping the best. Though it’s daunting, being able to adapt is crucial,” says Emily Townsend, co-founder of Workit Spaces, a coworking space for small and eCommerce businesses.
At Workit Spaces, three small businesses are proving that’s the case.
Whether it’s taking advantage of their existing eCommerce platform or reshaping their products to fit new customer needs, these businesses have each used their own tactics to respond to COVID-19’s unique challenges and opportunities. That has helped them stay on top of their cashflow - and in some cases, not just survive, but thrive.
Here are their stories.
Selling strategies: Alcmena eases panic buying
Alcmena, which sells cloth nappies online, found that business boomed during coronavirus shutdowns.
Founder Eunica Shaw says with shelves being cleared at supermarkets, parents were concerned they wouldn’t be able to get their hands on baby essentials like nappies.
“When people couldn’t guarantee nappies at Woolies or Coles, they turned to reusable alternatives,” she says.
According to Shaw, because Alcmena’s nappies can be washed and dried once they get dirty, and they come in “one size fits most”, customers felt assured they wouldn’t ever run out of this necessity.
Price also made a difference, she says. The ability to turn nappies from a weekly $20 expense into a one-off purchase appealed to many families, especially those feeling the squeeze on their finances.
In fact, Alcmena saw such a surge in sales over the COVID-19 period they paused their marketing efforts. In May, they even had a long waiting list after running out of stock.
Shaw acknowledges that this success has come down to a bit of luck.
“We were at the right place at the right time,” she says.
“If we had started a cloth nappy business during this time, we wouldn’t have been able to get production and we wouldn’t already have an established customer base.”
Keeping customers on board
Despite Alcmena’s big boom, Shaw is wary that getting customers to buy in the post-coronavirus period could be a challenge. So her focus has been on retention.
For one, she’s created info sheets that explain the benefits of using reusables over disposables. Alcmena also releases new nappy print designs, with an aim of keeping the product fun and fresh.
Another of Alcmena’s long-term strategies for growth is building a community through its VIP Facebook group, where members get extra benefits (like early access to new prints) and customers can share nappy tips with each other.
“The group means [first-timers are] less likely to be frustrated because they’ll have answers and they’ll have support there,” Shaw says.
She adds that the group has taken on a life of its own beyond the product itself, with members having more general discussions about life as a parent or caregiver as well.
In that way, Shaw says, “you’re not only buying into a product, but you’re also buying into a community.”
Money kindness: Strength in numbers
For Floraly, which delivers farm-fresh flowers to households across Australia, partnerships have been a key ingredient to their success amid COVID-19. Like Alcmena, they saw an uptake in orders throughout the shutdown period.
Floraly works with local growers and packs to order, which means that their supply chain wasn’t disrupted by international travel bans and they could continue to operate as usual.
Last month for Mother’s Day, they also joined forces with Gelato Messina - another local business - to create ‘flower and chocolate’ bouquets. These special packages sold out in just five hours, according to their website.
“We found talking to and partnering up with other businesses has been very advantageous,” co-founder Stefan Muff says.
Circumstances have also helped to boost Floraly’s sales.
Muff says that flowers have been a way for people to send support or love to each other while stuck at home.
“Because we’re an online-only company, we were still able to operate during shutdowns while a lot of brick-and-mortar florists had to close up shop,” he says.
But even as social distancing restrictions ease, Muff isn’t anxious about losing those new customers.
He says the company’s acts of money kindness - such as their promise to donate 1% of all their revenue to charities - are part of the reason that “once people discover our brand, they tend to stick around.”
“We have quite a high repeat purchase rate … [and it’s because] we offer a unique proposition,” Muff says.
“We’re a sustainable company, we work with local growers, we support local charities, and we send flowers which are fresher and often cheaper than our competitors. So I believe we have a very strong brand that customers can get behind.”
Topping up to meet demand
Unfortunately, for some companies, the transition in and out of coronavirus shutdowns has been far more turbulent. iKegger, a beer keg supplier, found they have had to completely re-evaluate the whole business, from their expansion strategy down to marketing.
Before COVID-19, iKegger had planned to move away from home brewing - where there’s a lot of competition but not much profit - into the premium end of the market, where they would sell kegs to nitro coffee makers and craft breweries.
However, those plans were turned upside down once news of the pandemic broke. Suddenly they saw a resurgence in enquiries and sales around their home brewing equipment, as bars and pubs closed up shop and people feared they wouldn’t be able to readily access beer anymore.
“We went from [a customer base of] 40% home brewers to 80-90% home brewers in the space of two weeks,” founder David Thackray says.
He adds that getting their hands on stock has been enormously challenging due to travel bans. When iKegger received a wholesale order from a Sydney brewery, their supplies ended up being stuck at Shanghai airport for six weeks.
“There’s just nothing you can do. You just have to apologise and keep checking the tracking numbers,” Thackray says.
Now, with restrictions being lifted, iKegger has hit another speed bump.
“Ours was an enormous growth and it’s very quickly been followed by a slump as people realised all the pubs are going to reopen,” Thackray says.
“Since they’ve reopened a lot of venues with a 50-people capacity, we’ve immediately seen a decrease in sales by, probably, 70-80%.”
More recently, iKegger has turned their sights to Europe. They’ve signed a deal with big beer brand Heineken to provide their takeaway kegs through European venues where much stricter measures are still in place.
Thackray says while there’s been a lot of “scrambling” to meet customer demand, it’s also useful to take a step back.
“What we found we needed to do was just take a day to sit down, reassess, and think about other avenues we could take our business and other ways we could use our products to sell to a completely different market,” he says.
“It gives you a chance to hit the reset button, to have a think and to really look at what you’re doing and where you can improve.”
Every business will have a different answer as to how they’ll survive the post-coronavirus world. But reading the stories of other small to medium-sized enterprises (SMEs) could shed some light on your own strategy for tackling this financially difficult period.
Here are a few collective tips from Alcmena, Floraly and iKegger:
- Connect with your customers: Whether it’s over social media or email, keep your customers updated on how your policies and products are shifting with the times, and their needs. Communication is key and sends a clear message that you have your customers’ best interests at heart. Remember they’re not just people who buy your products - they’re also your community. If you stay connected, chances are they’ll be more than happy to support you.
- Work with others: Think of ways you could band together with other small businesses. Maybe it’s a collaboration for a special occasion, or perhaps it’s spending some of your profit on another company’s products to give as little ‘thank you’ gifts to your customers. This is a time to not only ask for help, but also give back when you can.
- Look at the ‘forest’: … and not the tree. Pan outwards and consider what the current circumstances mean for your business as a whole. With COVID-19 restrictions easing, ask yourself how customer demand will change: which products will sell better, and which will no longer be relevant? A cashflow forecast is a great way to map out your revenue and expenses for the coming months.
As your business picks itself back up, you may find you’ve got new costs to cover, such as inventory and staff wages. Looking for extra finance? A business loan can help, and right now, the government could even guarantee half of your unsecured loan under its SME Loan Guarantee Scheme.
So what are you waiting for? Scroll down below to check out some unsecured business loan options.
Page last updated October 26, 2020
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