June 12, 2024

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Business is my step

Pamplin Media Group – Small businesses speak out on pain, opportunities of 2020

14 min read

CEOs, founders turn companies in directions they couldn’t have imagined 12 months ago

Editor’s note: Oregon newsrooms have partnered to share content to highlight the human toll of the pandemic. Our hope is this collaboration captures this historic nature of the COVID-19 crisis.

There’s the calendar year. The fiscal year. And for the first, and hopefully only, time ever, the pandemic year.

The latter began on Feb. 28, when the first Covid-19 case in Oregon was reported.

On March 12, Gov. Kate Brown ordered that no events with more than 250 people could be held for four weeks. The next day, Oregon schools closed for two weeks. An avalanche of stay-at-home orders, social distancing requirements, business closures, layoffs, eviction moratoriums, health care worker shortages and more crashed down upon us on a daily basis.

March and April were a blur as a thick fog enveloped the state.

Executives and business owners who thrive on well-laid plans based on reasonable assumptions were suddenly navigating in the dark. There was no roadmap.

That all seems so long ago. The panic, the chaos, the fear.

We’ve learned plenty about ourselves and our businesses in this pandemic year, about our resilience, ingenuity, courage, our breaking points and vulnerabilities.

We’re stronger for it, and better prepared for a world of uncertainty.

We’re more comfortable in the chaos.

This has become remarkably clear through our reporting. We’ve interviewed hundreds of CEOs and founders in 2020 who have turned their companies in directions they couldn’t have imagined 12 months ago. And they’ve done so in many cases in a matter of weeks.

We’ve gotten to know several of those companies especially well. In March, we published the first of six installments in a series following those businesses as they responded to the pandemic. Their journeys have been an inspiration.

We reconnected with most of them in early December. Here are their stories.

PORTLAND BUSINESS JOURNAL - Jeff Yapp, Golden Leaf Holdings

Keith Lee, Chin’s Import Export

“I have been doing this for 41 years and I think I have been through four recessions. It’s hard to say this is the worst storm that I have ever endured. I think it’s a different storm than a recession,” said Keith Lee of 2020.

Lee owns and runs Chin’s Import Export, the company his grandfather started in 1945. He imports and distributes primarily packaging products to restaurant and retail customers. Most of his restaurant customers are Asian-owned eateries.

When the Covid-19 pandemic took hold in Oregon in March, Lee saw his restaurant business immediately sink 50% to 60% as customers had to shut down in-person dining.

That initial jolt, however, did not last and he hasn’t seen his customers permanently close. Many went to takeout and haven’t looked back — even when limited dine-in was permitted.

“We are finding the trend with a lot of restaurants is the takeout model is going well for them. On the flip side, you don’t need to hire as much staff. People are re-evaluating how to do a restaurant,” he said.

He added that many of his customers are family owned businesses as well and have survived with the parents and children working to break-even and pay the bills.

Lee is humbled that his business has rebounded in a big way as more restaurants convert to takeout. He credits a decision 10 years ago to focus on packaging and paper products as his saving grace for this year. His fiscal year, which ended May 31, was better than the previous. He had the best July he has had in five years, but he doesn’t really know why.

He still has a staff of 15, and didn’t do any layoffs. In fact when people left on their own and he needed to hire, he had a hard time finding folks. He also got a Paycheck Protection Program loan that helped when business dropped dramatically in the spring.

Now his challenge is forecasting orders for his vendors. One of his sauce vendors wants a three-month forecast, but Lee is finding that challenging amid the ongoing uncertainty around the virus. He is also trying to keep the right mix of packaging to help customers continue takeout models.

“2021 is going to be totally weird,” he said. “The reason we survive is I still make sales calls. There is business out there if you go look for it. I try to remain ahead of the curve and looking for trends. Sometimes you fall flat on my face and sometimes you hit the jackpot.”

— Malia Spencer

Alex Hofberg, Watchworks

Alex Hofberg, an old-school watch connoisseur who co-owns a Portland shop with his wife, loves to meet people face-to-face, tell stories and share his enthusiasm for what he sells. But with his company’s recent bet on online marketing, only so much of that is possible.

“The entire electronic method of doing business is so impersonal and so boring to me that I’m not sure I would continue if it were solely going to be e-commerce,” Hofberg said. “I’d rather tear my eyes out.”

So as his store, Watchworks, makes a digital shift, he plans to leave much of the online work up to others. “I can do what I do best, which is schmoozing people in a more personable manner,” he said.

After being broken into earlier this year, the small business moved from its public-facing storefront in Portland into an appointments-only space on the city’s southeast side. It also placed heavier emphasis on online marketing.

Crafting a website was easy but loading it up with items has proven “an endless task,” Hofberg said, estimating the work wasn’t even a fifth of the way done.

Such are the digital-marketing bumps experienced by small business owners this year. And while retailers such as Crown & Caliber and Jomashop had already upped online competition in the watch-selling industry before 2020, a client roster built up over roughly 30 years may give Watchworks more of an edge.

Some customers want repairs, some holiday, birthday or anniversary purchases, Hofberg said. Some are “bored at home” and opting to treat themselves because they cannot travel or go out. “We are certainly seeing some degree of purchasing going on,” he said.

Even so, there have been changes. About a third of staff members are fully employed, Hofberg said. “This is our new normal; this is what it’s going to be for a long time.”

People still want what Watchworks offers. The phone rings daily, Hofberg said. Some days appointments are so stacked that another person couldn’t fit inside the new, small space where Watchworks operates.

Hofberg has tried to make available a mix of merchandise for a sweep of customer budgets. But a business lesson he learned years ago is that it takes at least as much energy, if not more, to make a $300 deal as a $3,000 one. Same goes for $3,000 to $30,000, he said.

“It’s easier to work the upper end,” he said. “There’s just no question: The rewards are greater, and the time is the same.”

— Jonathan Bach

Lynn Le, Society Nine

Lynn Le has survivor’s guilt.

While no business planned for the pandemic, it’s had an arbitrary impact.

Boutiques that relied on in-person shopping got walloped. Businesses with an online presence fared better. Businesses that sell fitness products soared.

Le is founder and CEO of Portland-based Society Nine, a female boxing apparel company that does both of the latter, but that’s not what’s most on her mind.

When the pandemic hit, Le scrapped her 2020 financial projections and planned for all scenarios, including liquidation. Like other founders, she had no idea what to expect as stay-at-home orders froze entire lines of commerce.

“No one could know where things were going,” she said.

As the calendar nears the end, Le said the closure of gyms and mandated quarantines played into Society Nine’s hands. A lot of people who previously boxed at commercial gyms needed gloves and mitts for home workouts.

But she’s less interested in talking about numbers and more interested in talking about how she thinks Covid will leave a lasting impact on business, particularly, a bigger sense of community and support for companies that showed up during the crisis.

“There’s going to be a newfound sense of community,” she said. “It was very clear that the government, on all levels, failed us.”

Le said Society Nine helped out in various ways, including working with domestic violence shelters to provide protective masks for staff and residents.

And while a vaccine is on its way, Le said 2020 also will be remembered for once again exposing the country’s struggle against systemic racism. On that front, she said change can’t come soon enough.

“A vaccine isn’t going to solve the problem of social and racial injustice that’s systemically rooted in the roots of our country’s tree,” she said. “Our roots are rotted.”

For her part, Le continues to focus on the physical, mental and emotional health of her employes. But she said it’s been a taxing year for small business owners.

“When people want to play business owner, this is what people don’t talk about,” she said. “What do you do when you’re expected to make hard decisions in the middle of a crisis when your employees’ safety is on the line?”

As for the business highlights, Le said the big accomplishment was launching the company’s first boxing shoe, which is now featured on Zappos. Society Nine also will end the year with sales above 2019. But she said there remains significant uncertainty.

“It’s hard to predict where and how people are going to want to spend their money,” she said.

But Le is optimistic that Society Nine is positioned to continue growing.

“Crazy as it might sound, 2021 feels bright for us.”

— Malia Spencer

Ian Williams, Deadstock Coffee

Ian Williams didn’t know what to expect when the pandemic hit.

He thought it might mean the end for Deadstock Coffee, his celebrated sneaker-themed coffee shop in Old Town.

“If Deadstock had to close, I would have been like, ‘Cool, we did it.'”

But as the year wraps up, Deadstock is on a roll. The company will open a second location in 2021, and it’s expanding wholesale distribution of its drinks. Williams also is a mentor-in-residence for Built Oregon’s accelerator, which helps local consumer products companies. He even got cameos on an MSNBC program about small business and in a Nike spot.

“Everything is good,” Williams said.

Williams, who is averse to handouts and debt, navigated 2020 without the help of government grants or loans. Instead of applying for Covid relief programs, Williams put his creative thinking to work, coming up with several new ways to keep Deadstock’s cash register ringing, including making growlers of Deadstock’s most popular drinks.

The drinks are now sold at several local retailers. He also expanded Deadstock’s line of bagged coffee and accessories, including hats, T-shirts and water bottles.

Sales took a “big dip at first,” but then came back as regular customers adapted and replaced in-person coffee with bagged coffee.

Williams, who previously worked at Nike, continues to give back to the community. He’s teamed up with a few friends to craft a curriculum for kids who want to learn more about the sneaker industry. He expects it to launch soon.

Deadstock benefitted from the surge in support for Black-owned businesses after George Floyd’s killing, but Williams said the sales boost was short-lived and difficult to manage.

Sales tripled some days over a roughly four-week period, but that made it hard to maintain quality. And Williams said many of the first-time customers would linger in the shop taking photos for social media and asking questions about the shop’s origins, making it harder to serve regulars.

“That’s draining,” he said, “Especially when you know this person is never coming back.”

Although the sales spike ebbed, Williams continues to find new ways to generate sales and expand Deadstock’s reach.

He just returned from a coffee road trip to Houston. Instead of flying to Texas, he put an espresso machine in the back of a car and made it a Deadstock Coffee on wheels. He stopped in 10 cities over 19 days, connecting with new customers on social media along the way.

“I had a lot of fun doing it,” he said. “I met some amazing people.”

Williams hopes to take another coffee road trip, but on the East Coast, in 2021.

As for next year, Williams’ biggest focus will likely be the new store, which will open in the spring in a new development at N.E. 30th and Alberta. It will be about 1,300 square feet, nearly three times the size of Deadstock’s original location.

“We’re trying to keep the intimacy of it,” he said. “If Deadstock is your high school bedroom, (the new store) is when you get the big time job and when you get to decorate your office. But you’re still into sneakers and you still love music.”

After all the ups and downs, Williams expects revenue to end the year flat, but he expects growth next year.

“I feel like we’re just getting started,” he said.

— Matthew Kish

Jason Bolt, Revant Optics

As 2020 comes to a close, Jason Bolt, founder and CEO of Revant Optics, said he has plenty to be proud of.

“There are so many variables, challenging variables for the bulk of the year, the ability for the team to adapt to a lot of it and remain optimistic and connected; our culture continues to be very strong even though most of us are working remote,” he said. “The commitment to Revant, the mission, and each other.”

The company, which has 33 employees, makes replacement lenses for eyewear. The bulk of its products are manufactured here in Portland and the company has expanded its prescription lens offering. The company expects to close 2020 with revenue even with 2019 — a win, according to Bolt.

Net income is expected to be up compared to last year. That’s an outcome Bolt attributes to the team’s quick moves as the pandemic took hold.

Many Revant employees are still working remotely and increased health and safety protocols remain at its production facility.

Bolt and his managers are planning 2021 with two financial models: A conservative plan with growth below 10% and a more aggressive model.

Tracking the models in real time will guide Revant on what investments to make and where.

“There are still so many unknowns going into 2021,” Bolt said.

Bolt has bootstrapped the company since it started in 2010. This is the first year he has seriously thought about taking on investors. There are opportunities to bring even more production in-house and the company is evaluating the capital needs for such a decision. He is already in talks with potential strategic partners.

He initially planned 2020 as the year to re-platform the website, transition to new products and suppliers, general upgrades across the board. The pandemic shifted that work dramatically.

Those projects were completed, but it took longer. New products such as prescription lenses will ramp even more next year.

“I’m optimistic and excited about next year,” he said, adding that he never thought 2020 would be an existential threat to the company.

“I had complete confidence in the team and the business model and the mission,” he said. “We have done a good job managing cash and adopting technology from the start of the business. I knew we were set up well to adapt quickly to the demands of changing circumstances.”

— Malia Spencer

Jeff Yapp, Golden Leaf Holdings

Just when the pandemic began to ebb earlier this year — for a time — Golden Leaf Holdings faced a new challenge.

“We came out of Covid and then we went into a period of social unrest that I don’t think the country’s ever seen before, especially in Portland,” Jeff Yapp, CEO of the Portland-based cannabis company, said. “And we had stores downtown that were impacted and were broken into constantly.”

Welcome to 2020, right? It was targeted as a turnaround year by Golden Leaf before it started, and despite everything, appears to be ending that way. Nine months into the year, the company had surpassed its 2019 revenue, pulled off a cash-flow positive quarter from operations for the first time and put together consecutive record-breaking quarters.

Cannabis demand is up all over the country, and up a lot — 40% — in Oregon this year. But that’s only part of the story, in Yapp’s view.

“We’ve grown our market share,” he said. “Part of that is we really leaned into the business this year, when others were cutting hours or staff. But I think really a big part of the story is the culture that emerged in our company through all of this.”

Oregon never formally declared cannabis an “essential” business, but it treated it as one, allowing producers and retailers to remain open while taking new safety precautions.

“That idea that we’re providing an essential service, that it’s our job to be there for our customers, that really took hold,” Yapp said. “It’s the reason why, I believe, when we started to get broken into, my team would be there at three and four o’clock in the morning, cleaning up the store up and getting it ready to open again. And we would be open the next morning.”

The damage was frustrating and tiresome, of course, but just as it had with the pandemic, Golden Leaf turned challenging circumstances to its advantage.

“They’d break the glass, we’d replace the glass and open up again,” Yapp said. “So finally I said just put the barriers up. And then one of my employees painted this stunning mural on the front. And after the mural went up, our traffic actually went up. So I talked about taking lemons into lemonade. The mural was all about unity, and our business actually went up when we left the board up.”

— Pete Danko

Dick Clark, The Portland Clinic

The Portland Clinic may not end the year in as robust shape as it started, but certainly healthier than it was last spring, when Covid-19 first struck Oregon.

The pandemic’s ripple effects clobbered independent medical practices, which typically function on thin margins. Not only did patients stay away in droves out of fear of contracting the virus, but Gov. Kate Brown ordered a halt to nonessential procedures for several weeks to conserve masks, gloves and gowns.

In April, The Portland Clinic’s revenue plunged by 75%. The clinic had furloughed 194 of its 575 employees, cut the partner-owners’ salaries by as much as 35 percent and temporarily closed two of its six clinics.

The clinic pivoted nearly overnight to telehealth for more routine care and insurers agreed to pay the same rates as they would for in-person care, helping to stanch the red ink. The clinic also received $1.6 million in federal grants — helpful, but the equivalent of only four days of operation.

Once the temporary ban on nonurgent care lifted, patients began to return, but many still delayed their care.

Clinic CEO Dick Clark still expects to plateau in the low 90 percentage range of normal revenue for the next several months. The headcount stands about 100 fewer than pre-Covid, but hiring is underway for 40-50 positions. All employee pay has been restored.

“The clinic continues to be resilient in its recovery from the initial surge last spring,” Clark said in early December. “Things are stable. If this was a ship, I’d say we’re going through some stormy times but not like the tsunami that hit us last spring. I feel more optimistic.”

With Oregon in the grips of another Covid surge, the clinic’s number one mission is to keep as many of its patients out of the hospital as possible, Clark said.

The clinic is still planning its move to a new flagship building downtown in 2024 and will celebrate its centennial next year, with a major display anticipated at the Oregon Historical Society.

“A key symbol of our resiliency is that we’re able to come out of this year and still be independent and locally owned and preparing for our future,” Clark said. “We have survived and we’re smarter.”

— Elizabeth Hayes

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