Facing Huge Coronavirus Disruptions, Small Businesses Pivot To Stay Alive

By Zachery Eanes The News & Observer (Raleigh, N.C.)

WWR Article Summary (tl;dr) John Replogle, a partner at "One Better Ventures"and the former head of "Burt's Bees" and "Seventh Generation" says being nimble and finding ways to soldier through the sudden downturn is the only way for many small companies to survive.

RALEIGH

Patrice Graham started crying earlier this month when she realized she needed to shut down her Raleigh yoga studio, Colors of Yoga.

It was days before the governor would issue an order shutting down businesses like hers to prevent the spread of COVID-19, but Graham had already seen the writing on the wall. In a matter of days, the entire country had been turned upside down because of the pandemic, leading to business closures across the entire county.

Graham stressed about how she would support her workers, and contemplated whether she would ever step inside her yoga studio again. "I didn't know if we would survive," said Graham, who put a significant portion of her savings into starting the studio in 2017.

But, nearly two weeks after closing, Graham now believes there's a possibility her business might even be in a better place whenever the coronavirus pandemic passes.

That's because her decision to pivot to virtual yoga classes -- as well as the loyalty of her clients -- has turned out to be a rousing success. Even though the studio's classes are now all on Zoom, she has been able to keep all of her teachers and is even adding more classes because of demand from existing paying members and new students looking for a way to exercise at home.

"We have just done our second week of virtual classes and now we are adding classes," she said. "Our studio capacity is normally 12 people, and for the virtual classes we bumped it up to 15. We have a lot of classes that are full."

Many small businesses and startups are figuring out ways to stay afloat during a time of unprecedented disruption. Restaurants, in particular, are having to completely change how they operate to scrape by.

One reason it has been a success, Graham believes, is that a Zoom class can provide a sense of community that a YouTube video or recording cannot. With so many people isolated right now, the classes provide a chance for real-time interactions with other people, and often after the yoga has finished, many students hang around on the stream and talk to each other for an hour. No one is permitted to talk about the coronavirus, Graham said.

"We need a way to connect, not only to ourselves and to our body and our breath, but to each other," Graham said, "to remind ourselves, that we're not alone, that there is support [and] that there's other people out there that are rooting for us."

Being nimble and finding ways to soldier through the sudden downturn is the only way for many of these small companies to survive, said John Replogle, a partner at Raleigh-based One Better Ventures and the former head of Burt's Bees and Seventh Generation.

He is currently advising a fleet of small companies that he has invested in -- many of them focused on retail, a particularly fraught industry during economic downturns. He has been advising entrepreneurs to save as much as cash as possible right now, but also realize that now is the time to look for new opportunities.

"The advantage of being a smaller, entrepreneurial business is the ability to be agile," Replogle said in an interview. "None of them have the competitive advantage of scale but they do have agility. It is disruptions like we are facing that make opportunity."

Philip Freeman, the CEO and founder of Murphy's Naturals, a Raleigh-based maker of a natural mosquito repellent, has been hard at work this week applying that message. (One Better Ventures has invested in Murphy's.)

Just a week ago, one of Freeman's board members, noticing the sudden shortage of hand sanitizer, asked if his company could produce some to sell.

Freeman put some thought to it and realized that because he had bought a large supply of ethanol and gotten the permits to manufacture it for a eucalyptus oil product the company makes, he probably could. Even more, because the U.S. Food and Drug Administration loosened regulations on alcohol-based hand sanitizers, Murphy's Naturals could begin production quickly.

Murphy's did a test run of 400 bottles, which they in turn donated, but the company saw that it could ramp up production, especially with shortages of the product on the market.

"It's not available and people are gouging like crazy," Freeman said. "And we don't appreciate that."

Already, the company has gotten a large order from the Navy for hand sanitizer, and it has enough supplies at the moment to produce 50,000 four-ounce bottles, which they plan to sell for $4.99 each.

Freeman said Murphy's plans to keep producing hand sanitizer in the long term, though he plans to get approval to add more ingredients, like aloe and tea tree oil, rather than just the basic sanitizer he's legally allowed to make at the moment.

"I think this whole coronavirus situation is going to change how we behave and how we look at hand sanitation for a while," Freeman said. "Will the demand fall off? Of course it will. But you will see more people use hand sanitizer than they have previously."

Replogle said companies have to be willing to say yes to new ideas at times like this, rather than finding reasons to say no. "If you become inflexible as an organization you begin to fail," he warned.

Graham, of Colors of Yoga, has enthusiastically said yes to virtual yoga classes.

The company is now advertising its offerings on social media -- including a pay-what-you-can model for those affected by business closures -- and is even seeing people from California and Texas sign up for classes.

While there were a few glitches at first -- phones rang, people were mistakenly not muted, a pet ran across the screen -- the studio is now investing in its online infrastructure, including buying microphones for teachers to use on Zoom.

Graham sees a future where they continue to offer virtual classes going forward, especially early mornings or Friday evenings, when many go home after work rather than to the studio. Many students are asking her to keep offering it going forward.

Two weeks ago she was despondent, but now Graham is filled with the more positive stress of running a busy operation.

"I went from crying," she said, "to doing all this research and typing up tutorials on Zoom."

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate ___ Distributed by Tribune Content Agency, LLC.

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