Articles

Non-Essential Businesses Struggling with Shut-Downs, Lay-Offs, Focusing on Surviving

By Keith Morelli

In times of crisis, like the one we are facing, small companies that are creative and resourceful are the ones that are going to survive

TAMPA (April 2, 2020) -- Nick Vojnovic never expected to be an emergency grocer.

The past president of Beef ‘O’ Brady’s and owner and current president of Little Greek Franchise Development, Vojnovic now oversees some 44 Little Greek franchises and has had to shut down his entire operation to help stop the spread of the deadly COVID-19.

There is some service to be had, though not table service. Restaurants in the chain are changing the way they do business. Franchises now are selling gyro platter ingredients that would normally be served at their tables or moussaka makings, a staple on the catered buffet.

How did the thriving chain wind up as a mini grocery store?

The instinct for survival took over, prompting a whirlwind of decisions about two weeks ago. Drastic governmental precautions were put in place in Florida and across the nation to stem the spread of the virus and they included shuttering places where people gathered, like sporting events, concerts and restaurants.

“Sales dropped 30 to 40 percent,” Vojnovic said. “We started being open only a half-day, then take-out only. Now, we’re selling groceries. If you need rice, chicken; if you go to the grocery store and they are out and you need some ground beef or a head of lettuce, stop by. We may have some for you. Whatever you need, if we have it, we’ll sell it to you.”

It’s all about getting through to the other side, he said.

“You can survive when sales are down maybe 20 percent, but you can’t plan for a drop of 40 or 50 percent.”

So, the new model was remain open, in whatever fashion you can, he said. Little Greek franchisees are being urged to “hang in there,” don’t order as much food, ask landlords if they can accept a late rent payment.

“In our business, you don’t want to shut down,” Vojnovic said. “You have to toss out all the food and it takes weeks to get your employees back; or you lose them altogether and have to train all over again.

“If we can get through this, at some point, it will crank back up,” he said. “It’s going to be a long summer for me, usually, we are super busy right now, March and April, May and June; This is going to be a tough one.”

Vojnovic is not alone. All over the state, the nation and the world, small businesses, deemed non-essential, are under orders to lock their doors in an attempt to keep the spread of the virus at a minimum. Business owners able to adapt are the ones who will emerge at the other end of the tunnel.

“In times of crisis, like the one we are facing, small companies that are creative and resourceful are the ones that are going to survive,” said Dirk Libaers, associate professor of entrepreneurship and innovation and the assistant director of the USF Center for Entrepreneurship at the USF Muma College of Business. “They employ several strategies to sustain existing – or create – new revenue streams.

“For example, restaurants can serve their existing customers and find new ones by moving to a take-out or home-delivery process. Like Little Greek, they may sell their ingredients directly to individuals or organizations that have difficulty obtaining them through regular retail or wholesale outlets.”

Another way is to adjust their pricing strategies or in the extreme, operate on a non-profit basis, Libaers said. “Many service businesses can sell vouchers or special deals that can be redeemed once the lockdown ends.

“In short,” he said, “any kind of pandemic or natural disaster requires a business – big or small – to re-examine its business model and change those components that enable it to sustain its operations, often in a scaled-down manner, to serve existing or new customers.”

Vojnovic, a 2012 graduate of the USF Muma College of Business MBA program, said restaurants across the nation are having to adapt or close up shop, perhaps permanently.

“The restaurant industry works well together,” said Vojnovic, a past chairman of the Florida Restaurant & Lodging Association Board of Directors, which currently is heavily involved in discussions about what’s working and what’s not working and “what’s the best way to move forward.”

For now, Little Greek is keeping all its employees on the payroll, even though many who work the catering side of the business are idle because all the events at which they would be catering are canceled.

“Fortunately, as a company, we are well capitalized,” Vojnovic said. “We’ll see how the summer goes. I think we will be able to make it. Overall, there’s going to be 10 to 20 percent of all restaurants that will close permanently. That’s a given.

“What does the landscape look like when we get back on our feet? Even if only 10 percent of restaurants close, the survivors will pick up that business,” he said. “We will phase back up again; push hard to get through this help get the economy going again.”