Down, but definıtely not out

Small businesses are often built on the dreams and passions of their founders. Survival is hard enough in normal times, with up to half no longer around after five years. But entrepreneurs will do whatever it takes to survive in hard times, as shown by five Costco business members profiled here.

Member: Alan Kratish / Location: Boynton Beach, Florida / Company: South Florida Magic School

Founded in 2015 by Alan Kratish. Mission: to build kids’ character, confidence and communication skills through teaching them the art of magic.

What happened: The school started with just three students using a rented room in the back of a local restaurant. It struggled with growing pains and with minimal funds; administrators tried different venues to attract more students, with some success. Then COVID hit.

The response: To grow, staff utilized email, social media and community bulletin boards, and also leaned heavily on public relations, exhibiting at community events and performing magic shows for the target demographic.

When COVID hit, school staff completed a self-taught crash course in Zoom and quickly pivoted to teaching virtual classes. A room in Kratish’s home was converted into a makeshift TV studio and teachers jumped in head-first, teaching magic to dozens of South Florida kids quarantined at home.

In their words: In our startup phase, through a combination of perseverance and relentless guerrilla marketing, such as distributing magic-themed activity pages to local children’s dental offices, our Saturday morning classes, now held at our local community center, rose from the ashes, to where they sell out months in advance.

With COVID, without the need for parents to drive their kids to a physical location, we were able to draw from an even wider geographic area. The feedback from parents was tremendous, with many expressing their gratitude for rescuing their kids from an overwhelmingly difficult time.

The silver lining for us is that we survived and were able to reach an even larger market.—Alan Kratish, Chief Wizard

Members: Delfin Ward and Dr. Jessica Tranchina / Location: Austin, Texas / Company: Generator Athlete Lab

Wellness and fitness company. Operated by co-founders Delfin Ward and his wife, Dr. Jessica Tranchina. Services: cold and hot plunges, infrared sauna, massage therapy, personal training and more.

What happened: Just a year and a half into operations, COVID hit and shut down the business.

The response: Within a week, live virtual workouts were up and operating. After a short closure, services changed from walk-in to appointment-based to control the number of people in the studio and provide for social distancing. All membership billing was paused for four months, but clients who wanted to come back sooner could resume their membership. They also worked with the landlord and investors on an emergency plan, and took advantage of federal and local government assistance. A network of fellow business owners across the country offered support and guidance.

In their words: The silver lining from our temporary closure was it allowed us to quickly implement ideas and systems that needed to happen from the growing pains we experienced during our startup phase. The shutdown also freed up some talented “A players” from other organizations that we were able to hire.

One of our core values is to “adapt and grow.” This is a great tenet to follow in life, but also in business. Now, we recently celebrated our three-year anniversary! Financials are back on track and we are on the path to be a million-dollar business. We even just made an offer on a second location.

All of the positives that came from this pandemic could not have happened without our wonderful members (some insisted on letting their membership run during the closure), our staff, my business coaches and my professional network that I belong to. —Delfin Ward

Members: Megan Nivens-Tannett / Location: Huntsville, Alabama / Company: Flourish Consulting Services

Full-service marketing and public relations firm, four employees. Founded by Megan Nivens-Tannett in 2018 after being laid off from her tech job.

What happened: When COVID hit, many clients pulled marketing spending, and the business faced failure.

The response: The team switched to working remotely; quickly partnered with local organizations to develop a series of free workshops to help small businesses bring their businesses online; and secured a federal Paycheck Protection Program (PPP) loan. They also found solutions to the staff’s personal challenges of working from home.

In their words: The pandemic was definitely a one-two punch to the gut, but we realized that we had something great to offer those businesses who were struggling and trying to pivot to bring their business online. We hustled our butts off—there was no way I was letting this thing take down my business after all the blood, sweat and tears that have gone into it.

Truthfully, what got us through this challenge was our desire to succeed and overcome obstacles—period. This is a mindset I’ve tried to instill from the very beginning. We face challenges each and every day (of course, none bigger than COVID), but as a small company we have got to be flexible enough to change quickly, open-minded enough to meet our clients where they are versus where we want them to be, and able to instill a culture within our company that’s safe. Our team had to know that I had their back—regardless of what unfolded. Not only does this include day-to-day support, guidance, professional development, etc. But I had to be their leader when there was so much unknown going on around us.

In the end, our business has actually grown from clients who realized how important a digital strategy was for their success. Because of what we’ve gone through as a team, we’re stronger, more agile, more innovative, and our desire to overcome life’s challenges is now part of the norm. —Megan Nivens-Tannett

Member: Adam Binder / Location: Manahawkin, New Jersey / Company: Creative Click Media

Digital marketing company started on founder Adam Binder’s kitchen table. Grew to 12 employees, moved to an upscale office with a lakefront view. Booming business, impressive annual growth.

What happened: COVID meant the loss of 35% of the company’s business, starting with clients in the health and hospitality industries, followed by others as budget cuts spread.

The response: The staff reluctantly vacated their office space and went fully remote. They implemented a comprehensive training system to train new employees and retain company culture and standards. They also cut costs to avoid layoffs or benefit cuts, and received a federal PPP loan.

In their words: When the pandemic hit, I had no choice but to confront one of the scariest questions I’ve ever had to ask myself: How could I keep my business afloat? My clients, my employees and my young son relied on me. While I thought about what we could spare to preserve our funds, I came to an unexpected conclusion: our office.

I was nervous about how we would function remotely. Luckily, we had developed our own online learning portal for new employee onboarding and digital courses for employee advancement. This proved to be indispensable as we went fully remote.

Truth be told, we struggled financially for over a year. Going fully remote eliminated our biggest expense—paying for office space—and reduced other expenses like utilities, group lunches and events. I also cut my own pay by 20%.

A year and a half later, old clients are coming back and we have taken on new ones. It has made me realize that having a cool office with views and amenities isn’t what makes a business thrive. It’s having a team of talented, passionate people behind you who are eager to adapt, innovate and grow with you as you continue climbing up that ladder of success together—even if it’s from a distance. —Adam Binder

Member: David Schein / Location: Houston, Texas / Company: Claremont Management Group

Founded by David Schein, HR consultant and employment law consultant. His office: a garage behind a historic house he purchased and renovated in 1997. Operated the rest of house as executive suites.

What happened: On July 6, 2016, a major house fire broke out and destroyed the roof and entire interior. Nobody was hurt, but five tenants were displaced.

The response: Schein’s garage office was undamaged, but he had to restore critical internet access, phone and water lines damaged in the fire. After the initial shock, he made sure tenants got into the main house to salvage what they could. The main house was fenced off, eliminating parking for clients. Meetings were moved to clients’ locations or restaurants.

In their words: It had always been my dream to own my own office building. At the time of the re, almost my entire savings were tied up in this building and the related business. I did try to see if I could sell the real estate and do something else to make up the difference. I found out selling something with a burned hulk on it, even with a usable garage building and a valuable urban piece of land, would be a losing proposition. I simply had to tough it out and put the building back together and regroup.

This involved a lengthy reconstruction process, working with rental insurance and slowly getting tenants back into the house. It all turned out to be a very good move. Since then, the property has appreciated substantially in value and clients like to meet with me in this nicely restored and decorated historic property. —David Schein