Unfortunately, right now in America many small businesses are struggling, and some of them are failing, because of the COVID-19 pandemic. It might sound strange to consider we can learn any business lessons from a business that failed, but sometimes the best way to learn and grow is through failure.
A recent story in Bloomberg shared the lessons and learning experiences of Fort Defiance, a bar in Brooklyn, New York, that was forced to go out of business because of COVID-19. But this story actually has a happy ending! Struggling businesses should emulate what Fort Defiance has done, and pivot toward a new, viable business model.
Once upon a time …
Fort Defiance was a cocktail bar, founded in 2009 in the Red Hook neighborhood of Brooklyn. For 10 years it was not just a place to drink, but a hub of activity, a place to connect with the community. New York is an expensive city, and the bar’s rent, health insurance premiums, and other costs of doing business kept going up, but Fort Defiance kept surviving—until the COVID-19 pandemic hit. New York was the early epicenter of the outbreak in America, and New York City’s bars and restaurants were forced to stay closed for months.
Even after the city’s lockdown restrictions were lifted, St. John Frizell, the owner of Fort Defiance, realized his bar wasn’t going to make enough money to stay afloat. Carryout drinks weren’t paying the bills, and not enough people felt comfortable drinking in bars due to the risk of catching the virus. Wearing masks also is not conducive to a friendly neighborhood bar atmosphere.
So Fort Defiance decided to pivot. Instead of operating as a bar selling drinks, it became Fort Defiance General Store, a neighborhood grocery store selling food. And Frizell says he’s actually happy that his bar failed, because he is doing good work for his community, and can see a path forward for his business.
Here are a few business lessons from this New York bar that went out of business:
Take time to reassess during crisis
Frizell wrote in his Bloomberg article about how people in the bar and restaurant business, like him, tend to be some of the hardest workers on the planet. They believe the answer to a problem is to just work a bit harder. But here’s the problem: during COVID-19 so much of everyday life and economic activity became impossible. Frizell realized that the harder he worked, the more money he was losing. So he finally decided to close up shop and reassess his business.
People often say to “just keep swimming” during a crisis, but sometimes you need to give yourself permission to stop. Take a fresh look at your business’s books and reevaluate your opportunities. Where is new revenue coming from? How can you cut costs? What aspects of your business should be completely redesigned or thrown out?
Don’t keep losing money unless you have a specific plan for how those short-term losses are going to turn into long-term gains.
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Go back to your core value proposition
Why do people go to bars? To drink, yes. But also to experience a sense of community and connection. Frizell felt that the community he served in Brooklyn was one of the most meaningful parts of running his business. Bars and restaurants are ultimately in the business of hospitality—feeding, serving, taking care of, and nurturing people. Frizell liked creating an experience and sharing it with people.
While his bar was closed, almost by accident Frizell decided to start selling food. He got fresh farm-share produce, posted about it on Facebook, and soon his bar customers were asking to buy groceries from him. He started selling milk, eggs, and rotisserie chickens. He sent weekly emails to share recipes and set up an outdoor picnic area for customers to eat outside the store.
Fort Defiance Bar became Fort Defiance General Store. But, in a way, the two businesses’ mission and values are the same: take care of people, create a community, provide for basic human needs.
Embrace uncertainty
Frizell writes in Bloomberg that despite the uncertainties of the future, “There are times when my fear of an unknowable future feels like exhilaration.”
Think about it this way: Did you decide to become an entrepreneur because you wanted everything to stay the same forever? If you wanted “safety” and “stability,” wouldn’t you have just gotten a full-time corporate job and stayed there?
Maybe in some ways, despite the disappointments and anxieties and sadness of 2020, the “uncertainty” of these times is not entirely a bad thing. What if entrepreneurs could shift their mindset and instead of being worried about the future, be excited about what might happen next, and how they can adapt and show resilience in the face of those changes?
Going forward
Good luck to St. John Frizell and the team at Fort Defiance General Store. This story is a wonderful example of how business owners can adapt to massive challenges and come out on the other side with a spirit of purpose and optimism.
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