It was a seemingly perfect day. Beautiful weather, fine food, great music, and good wine. My wife and I were celebrating another record year for our small business and the grand opening of our new downtown office, only days away. Our glasses were raised and ready to toast 15 years of hard work. Then, the phone rang, and everything changed in an instant. Friday the 13^th had never been more than a B-Film to me, but this particular Friday, March 13th, 2020 would give many of nightmares a name - COVID-19.  The warm spring day was suddenly a scorching heat of pressure and fear, a sudden collision with what I now see as seven profound life lessons for surviving and thriving in any crisis. We will never be the same. 

We rang in the 2020 New Year with the highest of expectations. Our 15 year old small business, First Crush Tastings, had just finished another record year in sales; our new event technology start up, Palaterra, was starting to gain traction, locking in 5 new customers; and our new 10,000 square foot downtown Round Rock Office Building was finally complete after two years of designing, permitting, and construction. Everything was going as planned, our 10 team members were excited to move into our new office space, and everyone was looking forward to a new chapter in our company’s life.

Move in day was January 23, 2020 and although we had dreaded moving in the past, everyone was working together to get settled into our brand-new office. You could smell the fresh paint and new carpet, and we had spared no expense; this was our new permanent work home, complete with fancy new ergonomic desks, high end audio/visual, an office gym, and a 3,000 square foot multi-purpose event space. It was one of our proudest moments. My wife and I had always dreamed of designing our own building and after 15 years in business we saw our dream turn into reality.

After moving into our new office, we had big plans for both of our companies and our event space, Centro. The grand opening date was set for March 25, 2020, and invitations went out to local community leaders, customers, family, and friends. We were planning a big party to celebrate our new building and share our vision for how we would use the space to enhance our local small business community. The first two months of the year were a busy blur, and our Q2 was looking to finish strong, even against a record year. Business was booming and my wife and I were on cloud nine, finally enjoying the fruits of our labor. We decided to take a few days off for a long weekend in mid-March before our BIG Grand Opening celebration. We had over 100 RSVPs and we were looking forward to celebrating this tremendous career milestone with our family, friends, and community.

Enter Friday, March 13, 2020, a day which will forever be etched in my mind. Up until then, I had paid no mind to the date, as I am not a superstitious person. My wife and I were enjoying a nice lunch outdoors at one of our favorite places, True Foods at the Domain. I remember the sun was out, the wine was good, and my wife and I were enjoying each other’s company. Up until that point, we had heard about the COVID virus but did not think much about it. We had some small retailers send in notice that they were suspending their in-store demos/tastings, which caused us some concern, but we thought if our major retail partners continued, we would be fine. Then the phone rang, and our operations manager notified us that our largest retail partners were shutting down too.

In an instant, our business world crashed and changed. The warm spring day suddenly felt like a scorching heat of pressure and fear.  As I stared into my wife’s eyes, I could see that she was worried and in complete despair.  She was looking for me to assure her that everything would be ok, and I was fighting to hold back any sign of concern. I wanted to be strong for her, but I was gripped with the same fear. The reality sank in like a ton of bricks; our revenue had been turned off like a faucet. My mind was racing, trying to understand what was happening. I don’t remember driving back home, but I do remember the questions with no answers racing through my mind. How long would this last?  How long could we last?  How were we going to make payroll?  How were we going to pay for our new building?  How were we going to pay for our sons’ college?

As these questions raced through my mind, I felt like I was in a tunnel and the light at the end of it was quickly fading away. Our four-day weekend was now dragging on and we were trying to understand what was happening, how serious this was, and what we were going to say to our employees. That next Monday was awful. We had to purge almost 1,700 events for the second half of the month, over $200,000 in revenue gone. Once that was done, there was not much left to do, so we decided to send our employees home for the rest of the week. Panic buying had started to set in, and I wanted to make sure that everyone went home and stocked up on the essentials. Who knew that toilet paper would be the first to go?

As the days continued to pass, I needed to figure out what to do, but as much as I tried, I could not think straight. In need of counsel, I reached out and set appointments with my attorney, my financial advisor, and several of my EO (Entrepreneur’s Organization) colleagues. I must have talked to six or seven people asking for any advice or experience that could help me formulate a plan. I remember sitting at my desk on Friday, March 20, 2020, after several days of meetings, mentally and emotionally exhausted, reading notes and trying to process all of the wisdom and information I had received. I knew what I had to do, and it would be painful: I had to let go of 70% of our employees and make cuts to our marketing and development budgets as well.

Determining who would stay and who would go was the hardest decision I have had to make in my entire business career. Our employees were like family; some had been working with us for over eight years. It was so overwhelming that I could not control my emotions and tears began to flow. It was too much for me to bear. One of our employees was well into her 60’s and another was pregnant with her first baby. These people had been devoted to us for years; how could I possibly decide?

My wife walked into our empty office to find me leaning back in my chair, staring at the ceiling in tears. She was shocked and asked me, “What’s wrong?!” I told her that on Monday we would have to lay off most of our staff and I did not know how I was going to decide or how I was going to do this. Throughout my career, I have hired and fired more people than I can remember, but I have never had to lay off nearly an entire team, my team. That weekend was the longest and most emotionally draining weekend we have ever had. There has never been a Monday that we dreaded more than Monday, March 23, 2020.

Although advice from my colleagues and friends helped me separate my emotions and look at the problem with a strictly business mindset, it still was not easy to execute what needed to be done. The one-on-one meetings to discuss the layoffs had to be done over a Zoom call, as the entire city had already gone into a lockdown. One by one, my wife and I met with our employees. It was two of the most painful hours in our entire lives. When we were finished, we could not help but hold each other and cry. Just like that, our new office, full of happy employees, was empty. We were all alone. The feeling was surreal, like we were in a dream – no, a nightmare – and we could not wake up. How could this have happened? We had just celebrated our best year ever and had a great soft opening party, but now it was just us in this empty new building.

As we began planning for the rest of the year, we wondered: how long could we last? What was our runway for both our business and personal finances? What would we need to cut out or sell to stretch our runway a little bit more? Some people told me not to worry, that this would be over in a few weeks, while others said it would last much longer. I planned for our company to exist at zero revenue for six months, followed by about 20% of last year’s volume, and as we entered the last few months of 2020 (typically our busiest time of the year), we would finish the year at 35-50% of our revenue from 2019. With this forecast, it seemed that we could last for almost a full year.

One thing we had done right as a business and in our personal lives was to work and live well within our means. We had a strong balance sheet for both our company and our personal finances. This would prove to be key for us and a valuable lesson I had learned from several books I read through the EO. I sat down with my wife and I showed her the numbers, based on the assessment I had made. It was my best guess and although I hoped I was wrong, and our business would come back sooner and stronger, we planned for the worst and prayed for the best. I also reached out to my banker and began to discuss available options. He helped us apply for the new Government Paycheck Protection Program (PPP) loan and he graciously offered to defer three months of our mortgage on our building and extend our interest only payment an extra three months as well. This, along with our PPP loans, helped to extend our runway even further and gave us the peace of mind that our employees would be safe for at least the remainder of the year.

At this point, I was faced with something I had not experienced in a very long time. I suddenly found myself with a lot of free time. Prior to the pandemic shutting down our business, my days were always full. Even though we had spent two full days in January building our strategic plan for 2020, everything we had planned was now totally irrelevant. I had no idea what to do, and for the first time in a long time I felt lost. So, I started to sign up for every free webinar I could find. Since I was plugged into the EO, I had a lot to choose from. I hoped that somehow, I could find the direction that I was so desperately seeking.

One of the common themes I noticed in my webinars and research was the concept of “pivoting.” I read about several businesses who were successfully pivoting or starting something completely new. This got me thinking about our businesses and how we could potentially pivot. Unfortunately, I could not think of a way. Our businesses were too heavily based on face-to-face human interaction. Ideas like virtual tastings or virtual meetings just did not seem to be possible or profitable for our business model. Sure, it was working for some, but I could not grasp how this would work for us.

Although at the time the days seemed to drag on, we were suddenly three months into the pandemic with no end in sight. It was becoming more and more difficult to keep myself motivated. How was I going to keep what remained of our three-person team motivated? We began to question if our business would ever come back. Would what we had to offer be relevant anymore? Would this really be our “new normal”? I really came to hate those two words. The stress of not knowing when this would be over, if our businesses were ever coming back, and what we were going to do if they did not, was overwhelming. The worries were fresh every day.

I found myself eating and drinking more, which did not help my stress and lack of motivation. So, my wife and I searched for things to help us cope. The gym turned out to be the best investment we made and the most used room in our entire office. Lifting weights/exercising really seemed to help us mentally and physically. 

Our days and moods seemed to brighten up after a workout, so we kept doing it. We also pushed deeper into our faith in God. I found myself meditating and praying more and soon I was incorporating this into my new daily habits. These actions were key to our mental fortitude and the ability to handle our daily stresses in the months to come.

Six months later, in August 2020, we finally started to receive emails requesting some in-store tastings for September. It wasn’t much, but at least it was something - a sign that our business was slowly coming back to life. One by one, retailers began to open their in-store tastings/samplings back up. There were new rules we had to follow but by now people were used to them. In October and November, we doubled our in-store samplings from September, and in December (typically our biggest month of the year), we finished just over 1,000 events. I was close to my business forecast from back in March; we went for a little over six months with no revenue and we were at 20% of our 2019 volume during the last four months of the year. Our business is slowly coming back but more importantly, I am encouraged that our service is still relevant and needed. There is a light now at the end of the tunnel and instead of fading away, it is getting brighter.

I decided to write this article for two main reasons. First, to help me remember what we went through, the little details and the pains that time always seems to heal. Trials and tribulations have a way of making us stronger and more resilient if we let them. And second, to share our story and the lessons that I have learned in hopes that it could help someone who is going through something similar. Entrepreneurs are resilient because we are always learning from our failures, our trials, and from other’s experiences. That is why I love being part of the EO, a community of small and large busines owners who share our experiences to help others who are going through what we have already been through. So, with that same mindset, I want to share with you the seven lessons I have learned from this COVID experience. These are lessons that will help anyone who is thinking of starting a business, or even if your business was able to thrive during this pandemic, they will serve you well and prepare you for whatever the future holds.

1. Shit happens – Despite all your best efforts, doing everything right, having the right strategy and perfect execution, something will inevitably happen that will turn your world upside down. What you do during this time will be key to your outcome.
2. It takes a village – Being an entrepreneur or a small business owner can be lonely. Your business will be all encompassing and take up most of your time. Be careful not to let this steal away your relationships, especially the ones with other small business owners. Seek out organizations (like the EO) that put you in a community of like-minded people. You will need to tap into their experiences to learn how to better navigate yours, and your experiences will help others as well.
3. Take care of #1 – When the shit hits the fan - and it will - the number one priority is you. The amount of stress that my wife and I experienced was enormous. During the first few weeks, it felt as if I was drowning in quicksand and the stress affected every aspect of our life. I had to first focus on me before I could help my wife, my son, my employees, and my business. My focus on God, prayer, meditation, regular exercise, good nutrition, and sleep, was key to help me handle the enormous stress, so I could think clearly and move forward.
4. Experts matter – Some entrepreneurs focus so much on their product or business model that they lose sight of the professional services that are key to every successful business. Expert resources (a great business attorney, CPA, financial advisor, local banker, and mentor) were key in helping me navigate through this crisis. Do not wait until you need them to find them, because by then it may be too late.
5. Live within your means – One of the most tempting things for a business owner/entrepreneur who begins to succeed is to celebrate their success by buying the fancy new sports car, boat, or new house/condo they have always wanted. Be careful not to fall into this trap, especially if your business is growing. A growing business will consume more cash in order to continue to grow. You should have at least six months of operational cash in reserve to prepare for that rainy day. Now that we have been through a pandemic, it would be wise to extend that runway to one year before you start to make any big-ticket purchases.
6. Cash is king – Now more than ever, you should know your cash flow -- how long does it take your dollar to hit your bank account? What levers can you pull to shorten that timeline? Just because you have closed a deal does not mean you have cash in the bank. A strong balance sheet for your business is like having a strong heart. It will help you weather the upcoming storm.
7. Look for opportunities in the crisis – I am sure that one day I will look back at this experience and see that some of the decisions we were forced to make opened new opportunities for growth, both personally and in our businesses. The key is having the right mindset to make the change and take the risk, even when it feels like everything you once knew is falling apart. Like gold purified by the fire, use this crisis to become a better person and build or rebuild a better business too.

As we start a new year, I am filled with great expectations for the opportunities it brings. We are not out of the woods yet, but I am encouraged by what we have been through and how we have come out: refined, stronger, and more resilient. We are capable of so much more than we think, especially if we look out for one another and look at our current crisis as an opportunity to grow and shine a bit brighter, for even the darkest of nights fades with the faintest of light.

Here is to a brighter 2021!

Daniel Hernandez, CEO
Palaterra  /  First Crush Tastings  /  Centro

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