5 Tips On How Small Businesses Can Survive This Disruption And The Next
Chocolate Pizza Company owner Ryan Novak carries a wealth of knowledge beyond his confectionery trade. Taking over the business at 21 years of age, he’s businessman wise beyond his years.
Read below how he transformed this small local company into a chocolate brand getting national attention.
Q: Tell us a little bit about your strategy for crisis management. What has helped your business?
Novak: The key to surviving a major disruption to your small business whether it is a COVID-19 shutdown, major natural disaster, terrorist attack, financial market collapse or other catastrophe is to anticipate the possibility and plan ahead. We found out in this crisis that the internet was our lifeline. We started over 2 years ago investing in upgrading our online presence and capability including updating our website, prioritizing SEO, strengthening domain authority and building up our social media. The investment in our online presence would pay immediate dividends when we were forced to close our retail store.
As a chocolate maker, we also built modest inventories of critical ingredients and packaging so we could absorb at least an initial disruption in procurement. Having supplies on-hand didn’t eliminate the pressure on keeping the operation running but it bought us time by pushing those do-or-die points farther out, so we had time to react.
Q: As a big believer in social media, how are you putting it to use during this crisis?
Novak: The power of social media in a crisis cannot be overstated for small businesses. The network you have in place on Facebook, Instagram, Twitter and other channels instantly becomes your only marketplace when normal operations are disrupted. Again, we had spent the last several years building our presence on social media with particular emphasis on Facebook and Instagram. We had grown from a few thousand followers to over 50,000 on Facebook and nearly 20,000 on Instagram. Those are small potatoes if you are a Hollywood influencer but if you are a small business those are solid communities of people with an interest in your products.
When the crisis hit, many of those “followers” became customers and those customers became ambassadors who shared our business with their friends and family. We posted daily and took time to upgrade the quality of our pictures so our content respected people’s trust in our products. Keep the tone of the posts positive, optimistic, and forward-looking. We create gourmet chocolate gifts so we kept the focus on how our products could help people find a bit of normalcy in their lives or celebrate a holiday or birthday when you’re stuck at home. We talked about sending sweet surprises or thank you gifts or fun ways to engage the moment like our “Stay Home, Love, Mom” Chocolate Pizza. People need every dose of positivity they can find in a crisis and if they find it for a few minutes on our social media pages then they will stay connected to us.
Q: As a local business, how do you stay true to your roots?
Novak: This one is personal for me. My mom was killed when I was 9 years old by a man high on drugs who ran a stop sign as she drove home. It was a nightmare that devastated me, but my community stepped up. In countless acts of kindness, people we knew and, most we didn’t, helped me and my dad through that tragedy. That hometown connection has stayed with me. I kept my business here because of that bond. It taught me to lean on your neighbors when times are tough because they’ll be there when you need them. And in this crisis, they have. People are willing to spend their money close to home with people they know. They take pride in successful small businesses in their communities. They like having that personal connection to the products they buy. Yes, they will shop the big box stores for a bargain but when it matters most they will rally to the little guy because they know the owner’s name, they see them sponsoring a youth baseball team, donating to the local food bank or offering fundraisers for the schools. We had done all those little things over the years as a normal course of business, as part of being responsible members of our community. Now, our community was returning the favor.
We had to switch to all online sales so our local patrons, who were used to walking in our door, switched with us. They were the curbside pickup business that kept coming back week after week. They were the customers who sent our products out of town as gifts. We live and work in a small town that has one stoplight and maybe 6,000 people but, in a crisis, they showed up and stood by us. And so did the next town over, and the next; one neighbor at a time telling us with each order that they valued our business and wanted us to weather this storm. They don’t teach it in college, and it doesn’t show on a balance sheet but “buy local” is an asset that matters.
Q: What advice do you have for businesses struggling with inventory?
Novak: You remember the old movies when the ship was caught in a gale and the captain ordered the crew to throw everything that wasn’t nailed down overboard to lighten the ship so it would handle better. Well that’s sound advice for small businesses in a crisis. Don’t try to do everything, just keep doing something. Strip down your product line to items you can most easily manage and focus your efforts on providing the best customer service for those things. We were not afraid to tell customers that we didn’t have a particular requested item right now, but we did have this other item available. In almost every case, people understood and would order what we did have. People know these are not normal circumstances and they will accept that you are doing your best. In a crisis, you cannot pretend that everything should run as it did before the disruption – it won’t, and the added pressure of trying to operate like that only worsens your position. Instead, put your efforts into a streamlined operation that still provides quality products and services.
Q: For businesses looking to get innovative, do you have any examples of how Chocolate Pizza Company has done this successfully?
Novak: They say necessity is the mother of invention. I agree. Ideas that lay dormant sometimes blossom under duress. For example, we had never offered free shipping on our website because we did not think we could make the numbers work. We talked about it numerous times but always found an excuse for not implementing it. The day after New York ordered most retail stores to close including ours we decided desperate times call for desperate measures. We put in free shipping on orders over $35 to one destination and instantly our online sales exploded. We did more online sales in the month of April than we did in the first 9 months of 2019. It was unbelievable.
Now, that explosion in online sales was not completely attributable to implementing a free shipping threshold. There were a lot of factors in play like an unprecedented number of people home browsing the internet, Easter falling in April and virtually no walk-in retail options for shopping. But, the impact of adding a free shipping option into the equation ended up multiplying our orders. Obviously, the added cost puts significant pressure on our margins but in a crisis, you worry less about what you’re making on each sale than you do on just making a sale. Keeping the ship afloat is the objective and we did that in part because we acted outside our comfort zone.
For more information, contact email@example.com. About Chocolate Pizza Company. This small town family-owned and operated chocolate shop in Syracuse, New York is becoming a national brand with recognition for its signature and trademarked Chocolate Pizza® and Peanut Butter Wings®. Established three decades ago, owner Ryan Novak has transformed the business into a premier chocolatier. Novak started with the company as a dishwasher at age of 15 and by 21 years-old, he made his dream a reality becoming the owner.