Are you prepared for your next business crisis? Whether it’s a recession, once-in-a-lifetime storm, or another pandemic, it’s coming. Discover these lessons learned during COVID so you can be prepared for the next challenge your company faces.
Rich: My guest today is a small business advisor for the Maine Small Business Development Center in Portland, and also a freelance business writer. Before that she owned and operated an inn and restaurant in Downeast Maine for 12 years, with her husband and professional chef, Tony Lawless. By the way, that’s a great name for a Spider-Man supporting character. Just want to throw that out there.
After earning an MBA from Boston University, she started her career in the business side of nonprofits, and feels she’s come full circle by combining her business and nonprofit backgrounds working for SBDC.
Today, we’re going to be talking about lessons learned during the pandemic, and how we can use these to ready ourselves for the next challenge, with Tina Oddleifson. Tina, welcome to the program.
Tina: Thank you, Rich. Thanks for having me.
Rich: So as I was putting together the questions for today’s podcast, I was thinking back on the first podcast that I heard talking about the pandemic, as well as some of my first podcasts that were impacted by it. I had no idea that we’d still be talking about it a year and a half later. And maybe we’re out of the woods, or maybe we’re in a little space in between two giant forests, I have no idea. But we certainly had enough experience with COVID to have picked up a lesson or two. So as you look back on the pandemic and your work with small businesses and nonprofits here in Maine during that time, was there any silver lining?
Tina: Well, that is a great question. Because I think, you know, over the last year or year and a half, I’ve been working with businesses who are in crisis mode. And as someone who also is a writer, I’m always looking for that story. And I felt like the story here was, what have we learned. Because the world is always changing. There’s always going to be some kind of challenge. And I felt like it would be a good idea to start documenting what we learned and to share that with our clients.
So I actually put together a blog series about this, and lo and behold, that it kind of mushroomed into a lot of different topics. You know, it started out looking at financial aspects and how small businesses can better survive a crisis. I took a look at this issue of ‘pivoting’, a word that we used a lot during the pandemic. And I became really interested in what characterizes businesses who are able to do that quick turnaround and change their operations. Like, why could they do that better than others?
I also looked at the question of remote work. It’s a huge topic that we can talk for a long time about. And you know, I also wrote about industry trends and things that are happening and ways that businesses can capitalize on some of that changes and trends.
And also really looked at consumer expectations. Because obviously, people had to get online. And in order to keep selling their products and their service. And we’re really interested in helping small businesses figure out how to improve their digital footprint. So there was a lot of lessons there, too. So tons of topics.
Rich: You hit on a lot of the major things that I did want to talk about today. So let’s just go through them one at a time. What are some of the financial lessons we’ve learned throughout the pandemic?
Tina: yeah, it’s a really important one. So I started talking to bankers, other SBDC advisors, clients, and I think one banker said it best when he said, what mattered before matters more now. And that’s a way of saying that there wasn’t a lot of new information, but it just reiterated the importance of the things that we do talk to our clients about.
So specifically, that kind of broke down into four or five different subtopics. So the first was – and this may seem really obvious – but liquidity matters. And when we talk to small businesses, understanding the importance of working capital and understanding the importance of a rainy day fund is really key.
There is a national survey that’s done every year called the U.S. Credit Survey, it’s done by the Federal Reserve Bank. And what that found was that small businesses in America had far less rainy day funds than most experts feel that they should have. It should be like three months of money to cover your expenses if you have some kind of a disruption. And most businesses don’t have anything near that. And that’s kind of scary when you think about how much small businesses contribute to the economy, but they’re kind of living on the edge there. So that really matters.
The businesses that had some cash were the ones that could buy the tents, and set up the umbrellas, and buy the software to sell online. So liquidity is really important in understanding financial planning. Really important.
But a big one that came up that was kind of a consistent theme through all of these topics, was that relationships matter. And when I say that what we found is that a lot of small businesses who had banking relationships with local Maine banks fared better. And the reason for that is that some folks who had relationships with large national banks were kind of shut out of the PPP loan process in the beginning. They came around in the second round, but a lot of those banks did not really work with really small, main street businesses to help them out.
Whereas Maine banks were literally, I talked to bankers who were literally calling up their customers, helping them apply, talking to them about what they could do to help them. And one banker told me that it’s really important for people to understand that it’s a two way street, and that if you have a banking relationship, you need to contact your banker if you are in trouble or you anticipate a cashflow crunch and they will work with you. And that’s the beauty of working locally. But you do, as the business owner, need to also reach out.
Another big one that came up under finance, was that financial and technological literacy really matter. And a good example of that is, we also work with a lot of businesses to try to help get loans and grants, and all of that required profit and loss statements, balance sheets, digital copies of tax returns, and not everybody had that. A lot of businesses did not have a digital or electronic accounting system, or didn’t really understand what those reports even were. And you know, unfortunately it was a little heartbreaking to see, but they were unable to access the emergency relief funds that a lot of other businesses were. So that was also a big one.
And finally, we talked a lot about credibility. From banker’s perspective, if you’re going to go and ask for funding or help of any kind, you need to write a business plan and you need to have financial projections to back up that plan. And most bankers are going to look at your executive summary, they’re going to jump to your financial statements, and then they’re really going to look at the assumptions behind the numbers that you give. And they need to be credible, they need to be grounded in reality.
And that’s something that the SBDC can help businesses with. We help businesses all the time, write business plans. But we also ask the hard questions, like why do you think you’re going to make this much money? Have you really looked at these expenses? Whereas banks are not in a position to do that. So credibility matters.
Yeah, I would say that those are pretty much the top themes that came out.
Rich: Well, I think those are all critically important. And I just think back on my own journey through COVID with flyte new media, and just very grateful that maybe three or four years ago, I admitted finally after 20 years in business that I had no idea about any of my financials. I didn’t know anything about my bankers or anything like that, and I started taking it more seriously.
I know you’ve had very good relationships. You talk to a lot of bankers from Bangor Savings. I have a very good relationship with Machias Savings Bank. Two small, local banks. And I agree, we got on the phone with them at the very beginning. And they were incredibly helpful about getting us the PPP loans, and incredibly conversational and checking in with us and making sure the paperwork was done. And it just made things so much easier. So that relationship piece is critical. And I never thought about that when the company was much younger.
And then the cashflow piece. Having that buffer. There may not be another pandemic, I hope, but there’s going to be something. There is always something. And if you were in a position where you have cash in the bank and other people don’t, it puts you at such an advantage. Just knowing that you have three or up to six months, where if no other money or work came in, that you could pay your employees, that you could pay your bills. It lets you sleep at night. I mean, it’s incredible.
And then we also work with an outsourced agency that helps us with the forecasting and the budgeting as well. And that piece, again, helped us be in position to really understand what was going on, and then quickly make changes to our own forecasting when COVID started. And then when we saw the shift, when everybody realized that they had to go online and that change in direction and momentum again. So all of those things are critically important to any business that wants to grow here in the state.
The second thing you mentioned is the word that everybody loves to hate. I mean, I never really did get sick of it. I thought it was just a brilliant word, but perhaps it was overused too much. Very interesting concept. And you kind of hinted at this, but why do you feel – or what did you find – why is one business able to successfully pivot while another, perhaps in the same industry, found it impossible? Is it a money thing, is it a combination, or something else entirely?
Tina: Yeah, it’s really fascinating, because I think it really gets to partly to human nature. But clearly there were industries where pivoting was really difficult to do. There are industries that were impacted, obviously like hospitality, that’s a tough one to pivot in. Although there are examples of it. And what I’ve kind of found was the biggest hurdle is you really need to run your business where you embrace change. Because the world is constantly changing and the environment that you operate in is constantly changing. And hopefully we won’t see a pandemic of this scale, but there’s always going to be something. There’s going to be a competitor opens up down the street, or there’s new technology in your industry, or consumer interests have changed.
Rich: Or Google or Apple decides to get into your business.
Tina: Yes. Exactly. So, I think a lot of small business owners sometimes set themselves up, they set up operations, things seem to be going pretty well. They don’t see a reason to tweak it. But that is really when you need to be looking for opportunities, and just see yourself as constantly in a growth mode.
And that means even if things seem to be looking working well, trying a new market marketing strategy, thinking about a complimentary revenue stream, thinking about a different delivery method, all of those things. And that’s just really accepting the idea that change is constant and that you need to see it as an opportunity. So I think businesses that did well, had that kind of growth mindset.
Another area that really came up when talking to people about this, was creative problem solving. You know, I think a lot of times small business owners think that they have to come up with all the answers, they’re the leader of their business. But creative problem solving really involves listening to customers and vendors and staff. It means asking questions. It means observing rather than thinking that you have to come up with the answer. And when you involve particularly your customers in that conversation that’s when you find these really creative solutions that people came up with to reach their customers. So that was another characteristic of somebody who understands how to engage with the people around them.
Another one that came up was the ability to communicate regularly with customers, staff, and vendors. We had some clients that when the pandemic hit, they kind of went into dark mode and they waited. And unfortunately, if you are not communicating updated hours and maybe some ways that you’re keeping people safe if they come to your business, then people just will come to their own conclusions and go to a competitor if they don’t know what’s happening. So people who really communicated regularly definitely had an advantage, definitely were able to pivot better.
After that, technological adaptability. We had some clients who, there was one example that I just want to mention that on our website, we have some great success stories of how we work with clients. And there’s a lot about how people pivoted during COVID. And there was one fitness center that their industry, it was kind of in disarray. And they immediately were able to get back online and recapture their sales within two weeks because of the use of technology and live streaming and on demand video and personal fitness plans for people using an app. They developed it, it was impressive to watch, and they were just ready to go.
And then I will say, the last two things I wanted to mention, are lots of discussion about being tied to one revenue stream and the need to diversify a little bit. It doesn’t mean to go do something completely different. But a good example is farmers who were selling to restaurants. The restaurants shut down, so there was, a lot of effort that went on to connect those farmers directly to consumers, and there were apps that were developing. And I think a lot of people came out of this realizing that, to pivot successfully also means thinking about some complimentary revenue streams and some complimentary customer bases.
And then finally, this relationships topic came up again. Because people who had some successful people were able to collaborate with other businesses. There was a lot of collaboration that went on. There another example of a client with somebody who did kind of wine and food based experiences, like tours and events. That person obviously couldn’t operate that way. And so she reached out to chefs and wine purveyors and developed a package that got delivered to people’s houses where they had those experiences at home. But that wouldn’t have happened without drawing on her network of relationships.
Rich: Absolutely. Interesting stuff. And like you said, there may not be another, hopefully not another pandemic in our lifetimes. But at the same time, there’s always going to be challenges that come up. So lessons that we can learn now, so that we’re going to be in a better position for when the next thing happens, we’ll be more resilient and ready to make that change, make that pivot in our own business.
You also talked a little bit about employees at the beginning, and then also just recently. I found myself chatting with my team at flyte new media yesterday about our plans for the office going forward. We’ve got a hybrid approach right now, because the business we’re in we’re able to work remotely or in the office. And I’ve basically given everybody the choice. But some of the people who are working remotely have started to express interest in doing more of a hybrid. So we’re having conversations about what does that look like? Do we need to start going with workstations? How are we going to handle parking? All these sorts of things that are coming up right now. So, what lessons did the pandemic teach business leaders and owners about working with their employees – whether it’s about a hybrid and remote working – or anything else? Because there’s definitely been turmoil in the marketplace, from an employment standpoint, ever since the pandemic.
Tina: Absolutely. You can’t open a newspaper or get online without seeing some kind of conversation about this from so many different perspectives. And I think what’s probably most important for small businesses to think about is that one, there’s not a one size fits all solution. That a business has to decide for itself whether someone’s job functions can be done remotely. But it’s also, people have different preferences. Some people work really well at home, others are dying to get back into the office. Some people really are at different stages of their career and working remotely makes a lot of sense for them. Other people are at the beginning stages of their career, where being immersed in the culture of a business is really important.
So I think the first lesson is that there is no one answer. But what small businesses really need to do is develop a policy and a transparent decision-making process around who works remotely and who doesn’t. And obviously the job duties of a particular position are gonna fuel whether someone can work remotely. But I think some things for businesses to think about as they’re developing policies, are things like expectations.
If you’re going to have people working remotely, what’s your expectation as the owner for response time and for availability. How has productivity going to get measured and performance? And also, there’s just kind of some tactical things like business expenses. Are you paying for that? Are you reimbursing employees for equipment? How’s that gonna work? And then cyber security protocols, that’s really come up as a question. You know, can somebody go and work out of a cafe? Probably not.
And then other major topics for small business owners to be thinking of are kind of legal issues, overtime laws. Are you going to let somebody who’s not exempt from overtime laws work at home? And if that’s the case, how are you going to have that conversation about what’s allowable overtime? You as the employer are still responsible for worker safety. So you need to make sure people are going to be working in an environment that’s safe and ergonomically correct, and all of that.
And then finally, anti-discrimination is another topic that’s been coming out in this conversation. Because if you, for example, find that a lot of people who want to work remotely happened to be women because it gives them greater flexibility to address other aspects of life like children, you need to make sure that they have equal opportunity for promotion if they’re working remotely or anybody that does. So, I would say the lesson learned here is to take it slowly and to develop a transparent policy that makes sense and that kind of addresses all these topics. But I think it is safe to say that in a very competitive market for labor, giving people some kind of flexibility options is going to be a competitive advantage. There’s certainly Gen Z, and millennials in particular, are really expecting that kind of flexibility.
Rich: Absolutely. You know, after we saw our initial drop in business right around March/ April of 2020, we then saw a significant upturn. And that was because companies suddenly realized everything’s going online. They need to improve their online existence. As more people work from home, shop from home, try to do everything remote, do you feel that this trend will continue as we move forward, or did we kind of like plateau and things will continue on as is?
Tina: I don’t think anything is going to be as it is. I think that 2019 is a long time ago. And as you well know, e-commerce exploded. And at the same time, I think another trend that was happening is that people really wanted to support small businesses. So the ‘buy local’ movement also exploded. Small businesses are part of the backbone of our communities, and people did not want to see them fail. So the expectation is that small businesses can be found online.
And we are, thankfully right now, we are working with Cares Act funding that has allowed us to hire some extra contractors at the SBDC who are marketing firms in Maine. And they are working with our clients to help them to get online and to help streamline their marketing processes. You know, you need to not only get online, but you need to be found online. You need to make the customer buying experience easy. You need to be available to your customers online. So for some businesses, this was a huge change. For others, this was something they were already planning on doing and just had to move it forward. But yeah, it’s definitely here to stay. I mean, we all expect to be able to buy and purchase online now.
Rich: It’s especially challenging, and I find for small and even medium sized businesses, just thinking back to my experience. And I’m always trying to buy small and I’m always trying to buy local. But there are just times, especially during COVID, where you saw it’s just so much easier to order from a big box store, and you can have them bring it right out to your house, and they’ve got this giant inventory. Most small businesses just can’t manage that. But people are willing to bend a little bit, I believe, for small businesses. But then small businesses have to be able to meet them part way there.
So you may not have as robust an inventory, SKU tracking, e-commerce system as say Home Depot, but if you are a local store, you need to make sure that your hours are updated and they’re doing things and you’re being found and all these other things, to make the buying process as easy as possible for the people who are choosing to shop small.
Tina: Yeah, absolutely. And you know, that means accepting all these diverse payment systems that are out there now, and being educated about all that, and having a line item in your budget for upgrading software. And watching what’s happening in the industry and looking at your competitors is really an important piece of this. But yeah, getting people online and getting them setting up shops has been a big part of what we’ve been doing over the last year.
Rich: You know, it’s interesting. We at flyte have not really been especially aggressive in trying to take new payment systems, only because our clients haven’t asked for that. But you know, certainly you see there are stores and businesses out there who are taking cryptocurrency, who are taking Venmo. Do you feel that there’s going to be a continued movement towards digital payments out there in the real world, and do small businesses need to plan on this and come up with ways of encouraging – or at least accepting – different types of payments?
Tina: I do. I mean, I don’t, I think for sure, like you need to go beyond credit cards and be dealing with at least PayPal and maybe Venmo. But cryptocurrency, not so sure if we’re there yet. But yeah, I think it’s a whole new world and it’s all being driven by consumer expectations of how to buy. And people want to be able to do it easily and efficiently, and that expectation is there.
Rich: Tina, we’ve talked a lot about the lessons that we’ve learned from the pandemic today. But there’s one question we always ask everybody, it kind of ties into your topic in a way. What one thing would you change if you could to improve the business ecosystem here in Maine?
Tina: It is a great question. I’ve been thinking about it. You are probably well aware that there was a survey recently that placed, I think it was by Thumbtack, that placed Maine at the top of the list of states in the United States to start a business, because of all the fantastic resources we have here. Free resources like the SBDC, and SCORE, and Top Gun, all of these programs. But having been a SCORE volunteer and also working for the SBDC, I would love to see some kind of centralized information source for people, because I think that it gets really confusing. And in my world, there would be like a centralized physical location where some of these organizations were together under the same roof. But if not that, then some kind of a website that would help people understand who the players are in Maine and what the best resource for them might be at whatever stage they’re in.
Rich: Awesome. This has been great. Tina, if people want to connect with you, where can we send them online?
Tina: Just go directly to, I’m going to plug the SBDC again, to the mainesbdc.org. That’s our website. If they want to get advising, they can certainly fill out an advising form online, and then ask for me. I’m also on LinkedIn. And but yeah, please send people to our website. We have great webinars that we’ve really built our library over this last year. And lots of great resources online. So mainesbdc.org.
Rich: And we’ll have links to that in the show notes. Tina, thank you so much for swinging by today and sharing with us those lessons learned.
Tina: Thanks. Rich has been a lot of fun.