Survival tactics: The Covid war diaries

How hard-hit Kiwi businesses have triumphed during the worst global pandemic and economic downturn in living memory. We report on the stories and lessons of four now-thriving survivors.

By editor Glenn Baker.

When New Zealand’s nationwide lockdown kicked in on March 25th, 2020, there was an air of ‘pinch ourselves’ disbelief among the nation’s business owners. How did we end up here? What does the future look like now? Angst and uncertainty was almost palpable.

The adjective ‘unprecedented’ quickly became the word of choice to describe what was happening around us.

Across New Zealand business plans were hastily recalibrated. We all entered unchartered territory – in desperation the nation turned its collective eyes toward Jacinda Ardern’s government for relief.

Over the past year there have been countless inspirational business stories pumped out by the media. Stories of business owners lifting their enterprises up from the ashes like a phoenix – pivoting and reinventing, relaunching and rejuvenating.

Here’re four remarkable stories of survival we uncovered, and no doubt there are countless others still waiting to be told. They all provide valuable lessons.

1. Secret Kiwi Kitchen:  It’s never too late to create

This story is not one of reinvention – more about creation. Secret Kiwi Kitchen’s founders, Lauren ‘Lulu’ Taylor and Clare Gallagher began 2020 full of hope. Lulu was loving her career as a digital marketer. Clare had been looking forward to going back into the workforce, with her youngest of four children starting school. She had previously established a highly successful fudge company in Waiheke Island before selling it in 2016.

Lulu describes Covid’s arrival as a “slow-motion realisation”. Clients slowly dropped away but she knew it wasn’t personal.

“It was scary facing the void of no job. So much of our identities are tied up in the work we do.”

Lulu admits she panicked at first and “came up with all kinds of crazy ideas”.

“That’s when Clare approached me about starting a fudge sauce business. She knew that 2020 wasn’t going to be the easiest year to re-enter the job market. If she wanted to balance work with the demands of a large tight-knit family, it might be wiser to start her own business.

“While ending my pre-Covid work life took a few months to unravel, opening the door to our new business happened instantly,” remembers Lulu. “The moment when Clare asked me and I said “’yes, let’s do it!’

A business plan was already underway during the first lockdown, and subsequently updated.

“Right from the start, we brought our friends and community along for the ride, so we were able to get support and traction incredibly fast,” says Clare.

They launched Secret Kiwi Kitchen during the second lockdown; it was a great time to get product into peoples’ hands. “We couldn’t get to a commercial printer, so we began by glueing paper labels onto our pouches,” says Clare. “Many of our processes were crude and time consuming but while the pandemic brought us challenges it also gave us opportunities to connect more quickly with customers,” adds Lulu.

With both families down to single incomes, this artisan food business had to be bootstrapped. Lulu and Clare worked around the clock – building their website and handling the graphic design, marketing and product development themselves.

Word of mouth within the local community gave the business a quick start. The dream was to sell their artisan baking mixes and dessert sauces into stores and supermarkets New Zealand-wide within a few months.

“A silver lining of Covid-19 was that it helped us access stores quicker than anticipated,” says Lulu. “And thanks to the national swell of interest in supporting local products and small businesses, retail outlets were excited about offering our products.”  

There’s always a trade-off between trying to scale a business and banking money, adds Clare. “Our goal was to grow Secret Kiwi Kitchen as quickly as possible in six months; to see if it had the potential to meet our joint income requirements.

“We are tracking well and hopeful that the business will continue to be our full time job in coming years.”

At the time of writing, prior to Christmas, Lulu and Clare had additional new products in the pipeline and a manufacturer on board for a new product – Marshmallow Fluff Sauce. They were looking to grow both retail and online sales, and fielding enquiries from Australia and Asia.

So what have they learnt through all this?

“Don’t be afraid to reach out to people. We would never have had the success we’ve had if it wasn’t for all the people who cheered us on,” says Lulu. “From customers spreading the word, to business people guiding us and sharing their learnings.

Clare says: “Likewise, it’s a conversation – really listen to your customers and adapt your business to meet their wants and needs. Now more than ever, the country is rallying around small businesses looking at how they can support them and that’s an extraordinary opportunity for business owners.”

Both women have no regrets. “As tricky as lockdown was, it gave us a chance to create something really meaningful and empowering,” explains Lulu. “The realization that it is never too late to reinvent yourself was especially poignant given that we are both mums who at times have put careers on the back-burner to focus on family demands.

“Re-entering the workforce and launching a new career on our own terms, with the opportunity to build something from the ground up, has been incredibly rewarding.”

www.secretkiwikitchen.com

2. Viva Expeditions: Desperate times, desperate measures

Prior to Covid-19 Rachel Williams and Brendan Robbers, founders of Viva Expeditions, were out to conquer the world. Their Albany-based travel agency, which specialised in organising unique experiences throughout Latin America and to Antarctica was experiencing full-blown growth.

They had business coming via almost all of the top agency chains in New Zealand and had recently purchased two hotels in Peru. Sales were up 30 percent year-on-year. They also had a contract with NZ Rugby to sell official packages to the All Blacks-Pumas games in Argentina and Buck Shelford lined up to lead a group tour.

“We went from selling a million dollars’ worth of Latin America and Antarctica holidays a month to nothing almost overnight,” laments Rachel. “It felt like the carpet had been pulled from under our feet. It was like a bad dream.”

After focusing on repatriating stranded clients, including the flight organised by the government out of Lima, Rachel remembers shedding many tears, retreating from the world and “finding solace in sauvignon blanc”.

Fortunately she was able to tap into some “realistic and practical” mentoring support through a contact from the Icehouse Owner Managers programme she completed in 2019, and another business contact who specialises in responding to shifting industry paradigms.

“These two wonderful people helped me to hibernate my business, cut overheads and look for opportunities,” says Rachel. “Once I could see a little more clearly, a plan started to emerge.”

That plan involves refocusing on high-end tourism and marketing ‘unique luxury experiences’.

Viva Expeditions formed new domestic relationships, obtained special contracted rates and marketing collateral and set about adding New Zealand to its online offering.

To market this new offering Rachel organised a luxury heli-tour for Joseph Parker. 

“My friend works with Joseph and I asked him what the chances were that Joseph would do a trip with us and let us film it.

“We were able to get amazing footage and run a marketing campaign that tied in with the lead up to his fight on December 12^th – all at minimal cost,” says Rachel.

Their ‘pièce de résistance’ was their Southern lights by Flight – a ten-hour return flight by Air New Zealand Dreamliner from Christchurch to view the Aurora Australis.

There was no money for marketing the flight, but the brother of a Viva Expeditions team member created a video, which was posted on social media and sent to Rachel’s press contacts.

Three days later the plane was fully booked and Viva had its biggest sales month ever.

That flight was followed by a second charter, and Rachel is confident they can fill two more flights in 2021.

Looking back over the past 12 months Rachel is grateful for the support she received from friends and family, her mentors, and her accountants. The latter helped her to manage her liabilities, cashflow, and to understand her options – even in terms of liquidation, which had been a real possibility. 

She can clearly see the lessons Covid-19 has thrown up – the big one being not to have all your eggs in one basket. “Brendan also runs a scrap-metal business and its income has been sufficient for us to get through.”

With hindsight Rachel believes income protection insurance would have been wise, but she’s glad they acted so quickly to cut their costs. It allowed her to continue operating for more than six months on zero income.

At the time of writing (late November) Rachel was quietly confident that their new domestic product would continue to serve them well, and was eagerly awaiting the arrival of the trans-Tasman bubble to open up new business.

As for outbound product, there were still major question marks over when they would be able to resume. It all depends on when borders reopen, flights resume, and most importantly, when a vaccine is made available.

“The vaccine will be the game changer and the sooner we have it, the better.”

3. Thrillzone: The thrills must go on

When New Zealand’s border closed and international tourism ground to a halt in March 2020, Thrillzone, an indoor game and entertainment business originally based across Auckland and Queenstown was suddenly forced to think outside the box to survive. It was time for a total rethink on strategy, recalls Sonja Painter who, along with husband Francis, owns the business. With international tourists making up 95 percent of its Queenstown customer base pre-Covid, some drastic life-support measures were necessary.

Sonja was forced to put Queenstown on the back-burner in order to focus on the more challenging Auckland market, which is where she lives. The Takapuna business had only been opened the previous November, and it’s target market is the local ‘occasions’ market.

Thrillzone had also opened a small Viaduct Harbour location two weeks prior to the first lockdown, with the intention of targeting cruise-ship passengers. That focus was quickly pivoted to the corporate market.

As it turns out, the lockdown was also the catalyst for sourcing a new augmented reality (AR) technology from Germany. ‘Escape Adventure’ is a customisable state-of-the-art technology that caters to different ages and skillsets. It’s new and exciting – combining scavenger hunts, escape rooms and AR into an immersive outdoor experience that’s perfect for group events.

Sonja says the new Escape Adventure technology is ideal for corporate businesses to keep their dispersed workforce connected and build trusted working relationships even when staff are working remotely. It’s unlimited customised feature means a company’s mission statement can be the central feature off a game.

“This is not off the shelf technology. This is what differentiates our product from the competition,” she says.

There’re delivery options that allow for various covid restriction levels too – ranging from full-on event-plus-dinner arrangements to just online game only.

While keeping the business ticking over during the lockdown Sonja was able to keep all 15 staff busy on the payroll, thanks to the government’s wage subsidy. In Queenstown particularly, when there is a customer spike staff work ‘in’ the business, and when there’s a quiet patch they work ‘on’ the business, explains Sonja.

“It’s a fundamental strategy we’ve implemented over the years. We always have a large work schedule in the background – everything from updating social media and web-pages to cleaning, and developing new ideas.

“Our expertise lies in making people happy. Our focus is purely on the guest experience – on bringing the best state-of-the-art experiences to the market – and exclusive to the areas in which we operate. To do this we work with the world’s technology leaders.”

Looking back Sonja admits there was a lot of stress in the early days, particularly around wage subsidy eligibility and negotiating with suppliers and landlords – agreeing on what is and isn’t fair.

Fortunately Sonja and Francis had previously worked in the corporate space. “We’d already experienced a few rollercoasters and saw Covid-19 as just another challenge. We focused all our energy on making it possible to survive in the new environment. That’s what drove us, and to some extent I even enjoyed it. Prior to lockdown we had become somewhat bored. This was seen as a challenge for us.”

If there is a worldwide silver lining to Covid-19, it’s the fact that it forced us all to slow down and rethink, says Sonja. “People are now more connected. In Queenstown especially, life was moving too fast, people didn’t talk to each other. But with the switch to domestic tourism people are talking again. We’re now looking at ourselves and our backyards, and we’re proud of our country and where we are.

“Many people have suffered financially of course, and I know our personal plans have been set back at least five years. But in many ways we are better off.”

4. ACLX: Adjusting to the times

Things couldn’t have been going better for ACLX just prior to Covid-19’s arrival. The Waikato-based supplier of entertainment and event production services works on events all over New Zealand and in the words of owner Aaron Chesham, “was in a nice phase of growth”.

“We had solidified our market share, were starting to build up a reserve, and spending money on strategic assets to increase our turnover,” recalls Aaron.

Unfortunately the business couldn’t operate in a lockdown.

“When the [lockdown] announcement was made it felt like the world had crumbled,” says Aaron.

No amount of planning could account for such a massive shutdown, and the nature of what ACLX does meant that assets were left scattered across multiple jobs.

“The warehouse is like an airport,” explains Aaron. “At least half the gear is out all the time in multiple locations. This means the risk of a significant event disrupting the entire business is well managed by the nature of the work. Covid laughed at all this good planning and completely shut us down for two months. We had no income for eight weeks.

“It took me about 24 hours to come to terms with the fact that our awesome business had been flattened and there was nothing we could do. To be honest it’s the most helpless I’ve felt in a long time.”

A ‘side hustle’ was not the answer. “It would directly impact our ability to run our main business when or if it returned,” says Aaron. “So we tried to be as productive as possible from our homes. We met twice a week on Zoom, we did the things we never had time for. We remade our health and safety system and motivated each other.

“We looked at the most promising areas of our business and set about developing them. We also got stuck into CRM to try and develop new clients.”

Thankfully a solid cash reserve could still be earmarked as a deposit on a new arena-sized concert sound system, and Aaron made an early call to pay all six staff their contracted wage 100 percent. “After all, they are the people who built the business.

“So between the reserve and the wage subsidy we got by. Just.”

Being open and honest with his team and his family proved the key to staying on top of the covid situation mentally, says Aaron. “It was the most challenging mental situation I’ve ever been in. I quickly realised it was OK for members of the ACLX team to have a day off or to not do anything. We were just all honest about it. Personally, I rode my mountain-bike a lot during that time, which kept me sane.

“The big deal is, if you have an awesome team who are all invested in what you are doing, then share the good and the bad. It’s not just a question of how are we doing as a business, it’s how are you doing too.

“Our guys were all worried about the future. So we made time to talk about it and share our concerns.”

The insights from 2020 are pretty clear for Aaron. “You can never have too much money in the bank; good staff are absolutely key to success, and New Zealanders on the whole are good, kind people.

Also, a plan is a plan. We’ve planned well for years. But we didn’t throw those plans out the window – we modified them to fit the new situation and ploughed on.”

ACLX came out the other side of covid looking strong. “It’s now gone nuts. All the good work we did in lockdown is coming into play,” says Aaron. “We still spent half a million dollars on a new sound system so we need to get that out there working.

“The event industry is seeing a huge surge. We’re basically at maximum capacity. So, failing another long lockdown, we should be back to profitability at the start of the next financial year.”

Photo above: the ACLX team.    Photo below: Clare and Lulu, Secret Kiwi Kitchen