What Would You Do in a Crisis?
Every business goes through its ups and downs. There may be office politics, cash flow issues or staffing challenges — issues that are tough, but manageable. When a true disaster or crisis strikes, though, it can sometimes be the breaking point.
But not always, as these six women demonstrate. They refused to give up, walk away, or see their circumstance as anything other than the ultimate entrepreneurial challenge. And they managed their companies’ unexpected crises — a $50,000 theft, a cancer diagnosis, even multiple natural disasters — with exceptional spirit and determination. Even if you don’t own a business, you’ll be inspired by their stories. (We were.) Here’s how they did it.
Tammy Gail, Webster, Fla.
The crisis: Tammy Gail, a single mom and owner/producer of luxury events like food and wine festival Clearwater Beach Uncorked, didn’t have time to get sick. But in 2003, she was diagnosed with breast cancer. “Being diagnosed with a life threatening disease affects every area of your life,” Gail says. “The wheel of life doesn’t suddenly slow down just because you have cancer. Things still have to be handled and addressed, including raising your children and running your business. When you have a small business with limited resources, there are only two options — shut down or move forward. We moved forward.”
How she managed: Because it was important to Gail for clients to view her “as the same viable business professional they had been used to working with,” she did her best to keep her illness hidden during business hours. She says that decision to carry on as usual planted a seed in her brain, “allowing me to see myself as a healthy young woman who happened to be going through a slight health speed bump.”
Gail says she found that competitors were willing to use her illness to gain inroads with her clients, so it became even more important to keep up that healthy, business-as-usual appearance. When she realized the amount of downtime she needed after each chemotherapy treatment, she started scheduling out-of-office business appointments five days after each infusion, to make sure she looked and felt well enough to continue working.
And maintaining her regular, busy schedule — as much as possible — was important to her mental health during the healing process. “There is a lot to be said for keeping your mind and body engaged during challenging times,” Gail says.
Lessons learned: Raised to be strong in Brooklyn, N.Y., and a longtime single mom, Gail says she had little choice but to keep going in the face of her diagnosis. Now cancer-free for 10 years, she says her feeling of responsibility to her son and her business and her positive attitude were as helpful as the team of skilled medical professionals who cared for her. “The power of thought is as potent a medicine as the drugs we are prescribed,” Gail says. “Humor is so important in healing, so I surrounded myself with humor throughout the nine months of cancer treatments and surgeries.”
For Gail, having cancer brought great clarity. “It became easy to understand that life is quite fragile and you can’t squander the opportunities that are available to you,” she says. Grateful for her second chance, Gail created Glam-a-Thon, a breast cancer charity, seven years ago to help other young women who are underinsured and underserved in her community. “One of the most extraordinary letters we recently received was from a woman who was assisted by our charity and it simply said, ‘Thank you for allowing my son to have a mom.’”
Natasha Case, 30, Los Angeles, Calif.
The crisis: When Hurricane Sandy hit New York in 2012, Coolhaus was one of the many small businesses affected. “Our office was flooded, our truck was damaged, all our paper wares were destroyed and, because we had no power for days, we lost hundreds of gallons of ice cream,” says Natasha Case, the LA-based CEO of the gourmet ice cream truck company.
How she managed: Case attributes much of her company’s survival story to the city of New York, which she says is “an unbelievably resilient, driven, indestructible place.” In the midst of battling her insurance company to get a claim filed and approved to cover lost product and damaged assets, Case found opportunities to reach out to other storm survivors. Almost immediately after the disaster, Coolhaus received an allotment of budget from the mayor’s office to visit the hardest-hit parts of the city to give out cookies, coffee and hot chocolate. “This helped us keep staff on payroll and to make a difference to people who needed it,” Case says. “Having the opportunity to help people in a crisis is an incredible morale booster and bonding experience. It really helped us rebuild the business.”
Lessons learned: The experience showed Case that “a disaster can provide immense opportunity,” she says. “For us, it was a moment to use our truck as an emergency response vehicle. I never thought of our trucks that way, but they are perfect in a crisis because they are off-the-grid and run on generators. It allowed us to visit neighborhoods we may not normally work in, introduce people to Coolhaus and, most importantly, feed people who needed food and comfort people who needed comforting. There's always a silver lining!”
Maggie Harlow, 45, Louisville, Ky.
The crisis: In 2008, Maggie Harlow’s Signarama franchise, a sign and banner-making business, experienced its “biggest and most profitable year,” she says. But then, in early 2009, the economy crashed, and “the bottom fell out,” she says. The shop’s average transaction dropped from $1,200 to $400, even though the number of average transactions remained the same. Clients cut back on budgets and put things on hold indefinitely.
“We fell into what I call a ‘defensive crouch,’” Harlow says. “I started to drop my prices, scramble for projects and hope that somehow my clients would suddenly change behavior. I noticed quotes took longer to approve, we didn’t close as high of a rate and that my competitors were fiercely fighting for business, trying to grab at any and all jobs. I stayed in that defensive crouch for too long and my business spiraled down, my energy waned and I became increasingly unable or unwilling to make the serious and permanent changes I needed to.” Harlow’s business was at risk of becoming another casualty of the Great Recession.
How she managed: In late 2012, Harlow says she felt disconnected from the business, clients and staff, no longer enjoyed herself, and the business was struggling to stay profitable — “about at breakeven or just below,” she says. “I was fed up and decided I either needed to give up or put all I had into the business and revisit it with a fresh perspective.”
Harlow decided to look at the business as if it would always be at its current sales level and determined what she would have to do to be profitable. She invested in reducing her space, cutting rent but adding a build-out expense. She reorganized the space and put employee workspaces closer together, putting the showroom in a large garage area, “creating an open, airy, kind of industrial feel,” she says. “It was a gamble, but a calculated one. By reducing my overall monthly cost and bringing folks physically closer, we could work more efficiently and our breakeven point was lower.”
How did it work? “Almost instantly, the energy level changed,” Harlow says. “I had more energy, the staff was reenergized and liked their new workspace, and we all collaborated better. Now, I can hear the tone of conversations all over the showroom, allowing me to feel more connected to what is happening. Once the energy changed, business came in the door, and we have almost returned to pre-recession level, only with a better eye on costs and staying profitable. We don’t take success for granted.”
Lessons learned: Harlow says the experience taught her to trust herself. “I should have listened to my gut sooner, but I wasn’t ready,” she says. “Sometimes you know what to do, but we don’t want to take our own advice. My guiding philosophy is when I feel stress or unhappiness, it is a clue to take stock of a situation and either put it aside, or take action. I needed to take action.”
Harlow’s advice for other business owners: “If you find yourself in a defensive crouch, remember this: The fetal position is for babies. Get to work.”
Sheila Hodges, 63, Gulf Shores, Ala.
The crisis: After spending 20 years paying off the seven-figure loan to purchase Meyer Real Estate, Sheila Hodges’ bustling vacation rental and property management business along the Gulf Coast, she was free to start expanding the business. But just as she geared up to take the company to the next level in 2004, the Gulf Shores area suffered “not one, but two major storms back to back, the first in our history,” she says. Hurricanes Ivan and Katrina ripped through the community, damaging many of her company’s vacation rentals and all but halting tourist travel to the destination.
How she managed: Hodges, who now owns several related businesses, grouped as SH Enterprises, says her primary focus in the wake of the storm was to keep as many employees as possible. She says her company’s longtime focus on relationships and service served her and her employees well throughout the storm. She simply focused on getting up every day and continuing to do the things that had always worked for her business, providing top-notch service and building relationships with both employees and customers.
“It was painful, scary beyond words, but, undeniably, where I was supposed to be,” she says. “How could I not believe this was where I was supposed to be when every time I saw a need, the right person or thing came forth? Every time we faced a storm, the employees from executive management to frontline pulled together in creative, highly intelligent ways to pull us through.”
Lessons learned: After weathering the hurricanes in 2004 and 2005, Hodges says she learned how to be resilient, keeping her head in the business and refusing to give up during a crisis. That skill came in handy in late 2008, when the economy crashed just after she’d opened a new commercial laundry to service her company’s rental units. It was helpful again in 2010, when the Deepwater Horizon oil spill occurred just when she had an opportunity to purchase a building for another new laundry facility in New Orleans. Rather than allowing fear to control her decision, Hodges knew from her experience her business could ride out a storm — so she purchased the new plant. “I knew for our business to survive storms, governmental changes and manmade disasters, we needed resiliency. So damn the torpedoes; let’s get the plant,” Hodges says.
Jennifer Moorehead, Blue Ball, Penn.
The crisis: In 1999, Jennifer Moorehead, a mother of three, started Science Explorers, a hands-on science literacy program for children, offering after-school science clubs, summer science camps and on-site field trips. After her husband’s sudden death, she decided to move the company to her house and opened a home equity loan to add on to her garage. As she did every March, Moorehead contracted with a local printing company to print and mail 37,000 summer camp brochures to promote early registration. That year, the printer simply took her money — including $7,000 for postage — and never provided the goods, for a total theft of about $50,000. Not only was the company robbed, but without brochures, future income from summer camps was unpredictable. “The printer apparently was running into financial problems, knew about the construction and decided we must be flush, so we were a good target,” Moorehead says.
How she managed: After the theft by the printing company, Science Explorers took in only $1,800 in early camp registrations, compared to $40,000 the previous year. “I thought we were out of business,” Moorehead says. She called the police, the state attorney general, Better Business Bureau, “anyone I could think of,” she says. She also called an attorney friend who advised her that winning a court case against a company that didn’t have any money to make restitution could be a waste of time. “I decided to put the bad energy to the side and focus on getting new flyers out,” Moorehead says. “It impacted our registrations and our sales, but we didn't focus on the negative and made it through it.” Moorehead had to spend more money to print new brochures, but it was the only way to increase the number of camp registrations, and she had to rely on other programs for a greater percentage of revenue.
Lessons learned: “Showing up counts,” Moorehead says. “If it was easy, everybody would be doing it. I had three kids watching their mom for guidance and leadership. Curling into a ball was not an option. I had a family to support, and I love what I do.” Today, Moorehead says she still trusts people, but spends more time vetting those she works with.
“Go forward would be my best advice,” she says. “Learn and move on. We had to keep moving on; there is a huge crisis in our nation with science education and creating lifetime learners.”
Lynn Gastineau, 58, New Bloomfield, Mo.
The crisis: Lynn Gastineau, who launched log home kit manufacturer Gastineau Log Homes in 1977, says the recent economic downturn “was not an Equal Opportunity Recession; some of us have gotten to participate more than others!” Her business dropped 75 percent almost overnight. Sales of one product line dropped 100 percent for nine months, and the company had to reduce its staff from 56 to 18. “It affects all your suppliers, the builders, the subcontractors,” Gastineau says. “Add in the issues with appraisers and changes to the financial institutions, and we were hit from every direction.”
How she managed: To survive the economic crisis, Gastineau had to make strategic decisions. “Our business requires an infrastructure that is very expensive,” she says. “We had to cut every expense possible. We had to maintain our margins; we could not discount our way out of trouble.”
The company outsourced some tasks, cut inventory, looked for inexpensive marketing opportunities and temporarily eliminated the 401(k) matching program. She also cut her own salary by 40 percent. “Our cash flow dropped significantly, and payables were not getting paid on time,” Gastineau says. “I personally responded to our suppliers and told them when I would get the account paid. If I could not meet my promise, I would call them versus waiting for them to call me. We worked with our bank and kept them informed on what we were doing.”
Gastineau considered other sources of income, developing a new maintenance division that has become profitable and launching an overseas marketing program. In the past year, Gastineau has established distributors in China, India and Mongolia — countries do not have access to timber and that need good quality housing. She predicts that 75 percent of sales in 2014 will be exported outside of the United States.
Throughout the struggles, Gastineau says that her love for what she does kept her going. “I love the houses that we build,” she says. “We make people happy and give them a home that they love and where their family can make memories.”
Lessons learned: Keeping her company alive throughout the past several years taught Gastineau that sometimes, “you have to make the tough decisions,” she says. “I had to lay off a 15-year, single female employee who was supporting her elderly, handicapped mother. It was one of the most difficult decisions I had to make. But if I had not done it, the 18 employees who did keep their jobs and the 26 that I have now would not have their jobs.”
Gastineau says she also realized the value of thinking outside the box. “Look for new ways to generate income,” she says. “Who would have thought that people in Mongolia would buy log homes from America?”
Credit: Gastineau Log Homes