2020 was a year like no other for most businesses. We went into spring with most companies firing on all cylinders and healthy profits for most economic sectors. Then came the pandemic, and some businesses went to zero, with a few of them staying there throughout the year, with others coming back a bit, but by no means at the level, they were pre-pandemic. Some saw a good year overall.
What did we learn in 2020?
- Businesses Need to Keep a Bigger Rainy Day Fund – I know of several companies in Kona that survived on that day’s or that week’s revenue and thus had no margin for error. When April came, and everything was shut down for a month, many of these companies were already in arrears for rent. At Kona Impact, we have significantly increased our “what if” resources to ensure that we have several months of operating expenses available if another existential threat comes about.
- Know when to Fold – Nobody wants to believe that there is no hope for their business. Entrepreneurs by nature are very optimistic, but this year taught us that–in some cases–the best strategy is to walk away from a hopeless situation. We know of one restaurant that remained in business despite no customers and no hope of a re-start of tourism. Now the owners are deeply in debt and have virtually no hope of ever paying this debt off. It’s sad to say, but the owners should have closed in April.
- Supply Chains are Tenuous – We have always kept a healthy inventory level–now about six months’ worth for critical supplies. We do, however, have back-ordered supplies from July orders, nearly six months ago. The pandemic has taught us that though it can be costly (and a bit risky) to have excess inventory, a pandemic, natural disaster, shipping strike, or global crisis can halt regular shipping and supply production.
- Additional Marketing Efforts Can Overcome Obstacles – Truth be told, Kona Impact did very little advertising and marketing from 2017 until the spring of 2020. We didn’t have to, as we were mostly at capacity. When the pandemic hit, we quickly focused more on our website, print collateral, and online marketing. We knew many of our usual customers–those in hospitality and tourism–would not be healthy sources of revenue in 2020, so we needed to get out a hustle a bit. By the end of the year, we had grown our customer base and made the business more stable for the future.
- Don’t Look for Excuses – There was a lot of negativity in 2020. The nightly news was full of doom and gloom, and the talk around town was downright gloomy at times. We tried to focus every day and what we could do to serve our customers better and keep growing. No excuses, no blaming, just a lot of hard work and creativity.