When sh*t hit the fan
Our business is reliant on high foot traffic in the Sydney CBD & North Sydney coming into our retail stores, and our corporate customers ordering catering for their office.
Before the government regulations started being imposed, we started to notice our corporate customers were cancelling their orders as meetings and events were slowly being banned in offices. Within 1 week, our revenue from corporate catering dropped 95%. The tens of thousands of dollars and years of time spent on developing online software, staff training, systems, marketing etc etc seemed to be wiped pretty much overnight.
We anticipated our stores would be hit next, and a crisis meeting was quickly called with our key staff. We mapped out worst case scenarios and decisions that would need to be made if different events transpired. Mindful that our cash reserves would zap quickly if revenue dried up, we braced ourselves to make ugly decisions quickly if the brand was any chance to survive and bounce back in the long term.
In this meeting, whilst we jotted down our worst case scenarios, we all remained optimistic, and probably more hopeful than anything, that none of these scenarios would transpire. The message was clear to the leaders in our business – remain calm, protect our staff, protect our customers – and brace yourself for an absolute sh*t fight.
As the week progressed, and the importance for everyone to work from home escalated, we saw rapid decreases in people commuting to the Sydney CBD and North Sydney. Our worst case scenarios became reality within days. Most companies decided to shut down their offices before government lock downs and we saw our in-store revenue drop about 90% within days. Like many other companies, we did not anticipate our business would be hit so rapidly. It seems so obvious in hindsight!
Whilst initially defiant to keep our stores open, it was clear quickly this was a battle we could not win. With revenue so low, expenses so high, and more government restrictions being announced by the day, we had little choice but to shut down 3 out of 4 stores. As a small business, we do not have a tonne of cash reserves, and rely heavily on our cash flow each week. If we kept our stores open, the little cash reserves we have would be wiped, and we would have zero chance of re-opening in the future.
With cash flow now gone, our goal was no longer growth, but focus quickly shifted to survival.
View other blogs in this series: