Year of COVID
I own a studio and shop in Tallinn where we design and make leather bags and accessories. In addition we organize popular workshops, exhibitions and other cultural events. Or more correctly – used to organize. A year ago, in March, I had followed the news with growing worry and made plans for the crisis in the back of my head.
The reality hit on the night when the state of emergency was announced. By the morning, I understood that most of the activities we were doing are finished and up to 80% of our turnover is gone. After pondering about the situation I decided to continue despite all of it. A year ago today I published a greatly shared post about the small entrepreneur’s outlook into the unfolding abyss.
Seemingly, the situation is the same today. But in reality it is much harder – all buffers are gone, last straws used and no light in the end of the tunnel is in sight. We are all exhausted and COVID shock is replaced with lethargy. Growing numbers of infected in the news do not startle anymore. Video calls from morning to evening while distant-schooling your children day after day – most of us have a similar experience and we all handle it as well as possible.
What about work? Here the experiences can be drastically different. Whole sectors are on artificial respiration and culture is in the ice-bath. In contrast, some sectors have also benefited from the new situation. As the experiences can vary there has been a lot of interest on how we and our sector are doing – how have we managed, what changes made and how much brain acrobatics has the year demanded? And what next?
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A year ago we were fighting fire with fire – fighting an 80% decrease in income with a 30% discount helped us to survive the year as we got orders for many months at once. Now is a good chance to thank all our clients and fans again – we didn’t expect such an enormous amount of support. We were and still are sincerely touched.
Adding support from the state helped us get through the summer. However, with almost no margin left it was more like winning some time to think. As we recovered from the first shock we understood there is an urgent need to change the business model. We moved the majority of sales to the web and started to expand into foreign markets. We invested all our resources into export, e-shop and product development.
We worked harder than ever before to get new systems in place and adapt. We raced against time and carried out a lot of changes. But we were too optimistic about the length, depth and capacity of the crisis. We didn’t succeed in putting all the ideas in action in time or failed to try them out at all due to the dynamic of the last year. We started exporting to Germany and Finland during the summer months, but unfortunately had to postpone many plans. Physical markets and pop-ups were cancelled due to COVID, so most of our work has been online and back-office. We now have German and Finnish clients, but hardly enough to cover the loss due to the crisis. Launching something new – like entering a new market – takes time and we do not have much of it in our hands. Fixed costs like rent, salaries and taxes continue to exist.
The Estonian market is small and the niche of our private clients is even smaller. Last year it was the latter that carried us through the mud – workshops were cancelled, corporate gift orders declined, our own shop and other retailers were closed or had fewer clients. Not to mention, there were no tourists. With the discount offer, we had already sold our products to the people who were thinking about buying them. We needed to speed up product development and come out with new designs. Developing new products is a long and expensive process. Over the next six months we developed some new designs, but more difficult products like unisex bags and tests with vegan materials were to be launched during the spring. And here we are in yet another lock-down.
We restructured our team to develop and expand our export and e-commerce capabilities. We have reached a conclusion that doing everything in-house in Estonia is no longer possible – the costs are too high. In order to keep my experienced workers we needed to focus on adding value. We needed to focus on product development, marketing and find a cooperation partner for production. We successfully tested the latter last autumn. All our small leather goods and the most popular bag models can now be manufactured by our partner without compromising quality. This allows us to cut costs, increase capacity for export and thereby get better conditions for material and courier delivery in the future.
In business you have to cover everyday operations and plan for the future at the same time. Thereby we are in a kind of a vacuum – the seeds of the investments are beginning to fruit very soon but can we hold on until that? We didn’t use regular discounts in our previous business model, but received small pushes now and then during the last year by offering regular discounts. We also have an ongoing 20% discount to bring customers to our webshop as the doors of the physical studio are currently closed. Unfortunately, routine discounts discredit the brand and erode sales – it becomes a new normality not a temporary time-window to attract the doubter to decide. Discounts are everywhere and massive – all the companies are struggling to survive. However, we do not function on a buy-low-sell-high principle like many other companies. Understandably, our potential customers are now focused on buying health products, home appliances and upgrading home offices. People who would normally be able to buy a long-lasting bag are not thinking about it because there is nowhere to go with it anyway.
We have been working in shifts since autumn – dividing the studio days and all who can work from a distance are in the home office. For our work it isn’t easy having all communications virtual instead of working on physical materials together in the same room. Especially when you consider that the weekends of some of your colleagues have shifted to weekdays and workdays to weekends. The extra workload that needs to be done because of this is immense. I have had practically no rest. I must be ready to react all the time. We have not been wholly untouched by the disease but the work in shifts has saved us from the entire team getting sick or going into isolation at the same time. However, this has meant more replacements, more overload and more exhaustion. On top of a lot of new processes and adjustments to work style.
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In conclusion, I’ll remind you of an anecdote I shared last spring:
“A man goes to a Rabbi and complains that it is very crowded to live in one room with a wife, seven children and mother-in-law. How can I make the conditions better? The Rabbi recommends him to take a goat. The man thinks it is odd but behaves accordingly.
About a month later the man visits the Rabbi again. Rabbi asks if things are better now. The man replies that it is still very compressed with a wife, seven kids, mother-in-law and a goat. The Rabbi recommends selling the goat. The man does sell the goat.
Time passes and the man meets the Rabbi again. The Rabbi asks if things are better now. The man praises “Oh, all is great! There is so much space now and everybody is happy!””
I hope that we will pass this predicament quickly – that we will get rid of the “goat”. It is elementary that we hold the physical contacts to minimum, wear masks, get vaccinated as soon as possible so that our medical system would not crash. But let’s also compliment teachers, support students and the youth whose future perspective this time has suffered immensely. Let’s give a helping hand to elderly relatives and friends who are (mentally) suffering so that the isolation will not break them. Let’s support small businesses and culture sectors, as they will offer variety and social richness that we want to experience once we can move more freely again.
Many restaurants, bars, markets, small shops, concert halls, galleries, theatres, cinemas and other independent businesses have managed to stay alive so far but everyone's financial, physical and mental reserves are limited. Once these reserves are gone, medicine, education, employment and GDP won’t be able to recover without big help and we will have a much larger burden to carry. Each of us has a chance to do something – for the favorite bookstore not to close, for the best dill pickle maker to return to the market, the beloved band to give out next album, the fantastic artist to make new exhibition, the renowned film-maker to finish a movie, the festival with long traditions you like to happen again etc etc. After setting a regular donation to a food bank, children’s shelter, victim support or other critically suffering sector even without corona, consider also supporting your cultural & lifestyle favorites without whom your future would be emotionally poorer. It might be too late to think about it later.
Photo: Silver Mikiver