In March 2020, our business was having its best-ever March. As producers of chai latte powder, we were readying for the traditionally busier winter months when a hot, comforting chai latte peaks in popularity write Bondi Chai founders Melissa Edyvean and Martin Buggy.
But like everyone else, this year we also had one eye on the unfolding COVID-19 pandemic and what its effects might be on the economy, and our business.
Aside from the news, there had been no financial warning signs – demand was strong and growing and we had seen no early drop-off in sales.
Then, almost overnight, everything changed. We went from having our best March in 16 years to our worst week ever.
Sales fell off a cliff. Our product sells mainly to cafes and as they were closed down around the country, demand for Bondi Chai evaporated.
In any other circumstance, it would have been too easy to panic. And we may well have, if not for one thing – ever since we started the business, we’ve been putting money aside as a backup fund.
Our initial aim was to make sure we had enough in reserve to be able to keep our business operating for at least a month with no income. After reaching that goal, we just kept going until we had created a 6-month financial buffer.
Aside from the financial stability it provided, the crucial benefit was that it helped us to stay calm when all around us was in chaos.
As a business owner and operator, you need to be a rock for your employees in times of crisis. They are looking to you for direction, a clear head and at least some stability. Without that, a culture of uncertainty can spread quickly, making even your best people mentally paralysed with fear and unable to contribute in any meaningful way.
Two factors helped us stay calm and anchor our business and our team: the decision to build a rainy-day fund into our business model from day one and the decision from very early on to retain and work with external business advisers who could provide us with impartial, balanced advice and guidance – through the good times and especially the not-so-good.
These people gave us the necessary avenue to walk through all the issues confronting us without unnecessarily stressing our team members.
As businesses around the country re-open, we’re starting to see a way forward and are confident our business will resume the growth trajectory we were enjoying pre-COVID.
It’s going to be tough for everyone going forward, and we know that not all businesses have the luxury of putting money aside for a crisis.
But we made it part of our DNA from the very beginning, it wasn’t negotiable – like taxes or insurance premiums – it had to be paid.
We never thought we’d need it – who saw this coming! – and putting money away when you had so many things to spend it on was never comfortable, but the benefits we’ve reaped in the last few weeks are worth more than money could buy.
So if you’re just starting out or gearing up to re-start, firstly take a bow for your tenacity and fighting spirit and then maybe think about how much less stressful this crazy period might have been if you’d had a ‘survival fund’. We highly recommend setting one up – and we sincerely hope you never, ever need it.
Want more? Get the latest coronavirus news and updates straight to your inbox! Follow Kochie’s Business Builders on Facebook, Twitter
Now read this