Despite the economic difficulties brought on by COVID-19, some small businesses thrived in 2020. Here's what it took for them to be successful.
Operating a small business is always challenging, but the COVID-19 pandemic has made it even more exacting. Shutdowns, social distancing rules and rising coronavirus cases have forced small businesses to close; nearly 100,000 have closed for good.
Amid the ashes, there have been stories of success – businesses that have not only survived but thrived. Through trial and error, they have made their businesses work in the new normal.
For some, this meant taking advantage of newfound demand. For others, it was the ability to pivot as new business models emerged. These small business owners' willingness to try something new enabled them to beat the odds in a year marred with uncertainty and devastation.
"The willingness to be flexible by far was the No. 1 asset businesses had," Kathryn Petralia, co-founder of Kabbage, told business.com. "You certainly had to be willing and able to modify your business plan."
We spoke with five small business owners to learn what they did that enabled their businesses to prosper during this challenging year.
Pivoting paid off for small business owners.
Pivoting was a major theme at the start of the pandemic and continues to be an essential business strategy as we head into 2021.
When small businesses across America were told to limit the traffic in their stores or shut down their establishments altogether, small restaurants suddenly had to shift their business model to takeout and delivery only, while manufacturers had to ensure their products were always on the shelves of stores that remained open.
One example of this is Sus Hi Eatstation, a chain of nine fast-casual sushi restaurants in central Florida. Before the pandemic, the restaurant featured a Chipotle-style assembly line of custom sushi rolls, bowls and burritos. When the coronavirus struck, Sus Hi Eatstation had to close its dining room and figure out a way to serve customers safely. It turned to technology, implementing a self-serve ordering kiosk and pickup model. This helped the business not only stay afloat, but increase its sales by 50%.
"The kiosk system allowed us to keep everything streamlined and prepare orders as they come in," said Robert Ly, founder and CEO of Sus Hi Eatstation. "Without the kiosk, we would be facing confusion with the line and online orders coming in at the very same time." [Read related article: 10 Reasons Your Restaurant Needs Modern POS Software]
"The businesses who embraced technology and quickly moved to digital interactions had better outcomes," Petralia said. "It really made a difference. We've seen that play out in all kinds of industries."
For Fresh n' Lean, an Anaheim, California-based organic meal delivery service, pivoting during the pandemic meant meeting extreme factory safety measures and working with the government to ensure peace of mind for customers. The arduous process was worth it: The company's sales increased by about 15% in 2020.
Business owners also had to embrace resourcefulness during 2020, which was the difference between survival and closure for many small businesses. That was particularly true of companies that relied on suppliers, retailers and consumers to conduct business.
When shutdowns started, Pastene, the 146-year-old importer of Italian foods and ingredients, had to figure out ways to ensure products kept flowing to store shelves when rivals were running out of stock. It also capitalized on the demand for home cooking and launched a new e-commerce website. Those actions drove a 25% increase in the company's sales during the pandemic.
New opportunities emerged during the pandemic.
The pandemic also provided the opportunity for businesses to pivot into new areas or expand in existing ones. With millions of people stuck at home, consumers' needs and behaviors changed. The companies that recognized the opportunities came out on top.
"There is so much change going on with consumer habits and how we do things on a day-to-day basis," said Kirk Simpson, founder and CEO of Wave Financial. "That presents a massive opportunity for small businesses and entrepreneurs who can move fast and take advantage of technology to satisfy these new consumer changes."
Cratejoy, an online marketplace for monthly subscription boxes, is one of the businesses riding the shift in consumer habits. When the pandemic struck, the Austin-based subscription company knew small businesses would need help selling products online. It also knew people at home would want subscription boxes focused on keeping them comfortable, busy and entertained. The company reached out to small businesses, offering to sell subscription boxes featuring their products on Cratejoy's website.
"We realized there was going to be a lot of folks who run businesses that are going to need to come online," said Amir Elaguizy, CEO of Cratejoy. "We said, 'OK, let's help get businesses online.' The next thing we thought about is, 'How can we help people who are stuck at home?'"
Those calculations paid off. Cratejoy's sales have more than doubled in 2020, and the company has twice revised its forecasts to set them higher.
For some businesses, the opportunities that opened up during the pandemic included an influx of demand that required them to grow faster than they had projected, which meant they had to hire more staff or implement new technology to automate processes. That has been the case at Dual Wield Studio, the Seattle-based merchandising company that helps connect fan creators and intellectual property holders. Its partnership with Innersloth, maker of the viral game Among Us, took on new meaning during the year as the game's popularity surged. As a result, the two-person company is planning to onboard new employees.
"It's genuinely overwhelming," said Rowan Rowden, co-founder of Dual Wield Studio. "Normally I can handle all of these things on a small scale, but when you get to something that's this large, you have to get all-new people involved."
These success stories are just a sampling of the small businesses that made changes to how they do business this year, which allowed them to not only keep their doors open but experience growth during the pandemic. By taking calculated risks, embracing change and looking for new opportunities, they have proven resilient. To learn more about how they thrived in 2020, read their stories below: