Doing Business in a Pandemic: Analysis by Chaifetz School Entrepreneurship Professor Jerome Katz
Dr. Jerome Katz, professor and Robert H. Brockhaus Endowed Chair in Entrepreneurship at the Richard A. Chaifetz School of Business, offers pandemic-friendly tips for business owners.
Dr. Jerome Katz is no stranger to the work necessary to get a new business off the ground. In fact, he has been advising St. Louis entrepreneurs for 33 years. But although starting a business has never been easy, the COVID-19 pandemic has thrown additional curveballs at aspiring business owners.
“It’s slower and harder to raise money,” Katz said in a recent St. Louis Public Radio article, pointing out the importance of meeting with investors face-to-face during the early stages of the investment process.
But Katz points out that creative entrepreneurs have found success pivoting to new business models and practices to overcome challenges presented by the global health crisis.
“I’ve been amazed at all the ways small businesses have adapted to the pandemic,” he says. “Initially, we saw small businesses basically going into a lockdown kind of footing and learning how to take care of their employees and customers. A lot of businesses figured out ways to keep selling during lockdown — we saw a move to curbside and delivery options very quickly.”
Suddenly, Katz says, small businesses that were entirely face-to-face pre-pandemic found themselves operating full-time via phone and websites. Some restaurants started offering meal kits in place of their regular products to meet new demand.
Katz highlights Seoul Taco, a St. Louis favorite for Korean-Mexican fusion, as a business that has effectively adapted to the pandemic, noting their quick pivot to curbside and delivery options. Katz also mentioned Seoul Taco’s campaign early in the pandemic to deliver free food to essential health workers as an example of an approach that both boosted their business and advanced their reputation as a community-oriented restaurant.
The campaign, “Seoul for the Crew,” both bolstered Seoul Taco’s business and offered support to St. Louis’s essential workers, which allowed consumers to feel good about two things: Supporting a local restaurant and offering encouragement to the city’s health workers.
And while many companies have struggled through the last six months, some have been able to grow their business by identifying and catering to new demands created by the pandemic. Katz cites Flexible Label Group, a label-making business owned by Elaina Sexton, as an example. When Sexton noticed that local distilleries were switching to production of hand sanitizer instead of alcohol, she reached out and offered to create the labels necessary for the new product lines.
The result? Even though many of those distilleries have switched back to brewing alcohol, they’ve kept her on as their label supplier, and her regular client base has grown.
While ingenuity and quick thinking are necessary for any business looking to thrive through the pandemic, Katz believes maintaining a strong online presence is even more important.
“With everyone stuck at home, the number of people who have had to get used to shopping online has increased dramatically,” Katz says. “People don’t want to leave home, particularly to go shopping, but many people have gotten so much more used to shopping for everything online.”
This creates yet another hurdle for small businesses, even those with strong websites and social media pages: How to compete with online giants like Amazon or Target, which offer low prices and fast, free shipping?
“You’re not just selling a product, you’re selling a story,” Katz says. “Yes, you could get a similar product on Amazon—but here’s the story behind that product that makes it worth your time and a little bit more of your money.”
For local businesses looking to stay competitive among the big brands, Katz advises focusing on that story. He offers Greetabl, a gifting company co-founded by Chaifetz School graduate Joe Fischer (CSB ‘04), as a prime example of the impact a good story can have on a business’s success.
Greetabl provides easy gifting customization, allowing consumers to personalize cards and gift boxes with their own photos and messages.
“The personalization of the experience, for both the buyer and the recipient, is what makes it special enough that the product is worth the additional cost, which makes it hard for a site like Amazon to compete,” Katz says.
Ultimately, Katz is optimistic about the health of St. Louis’s local business and startup scene. He notes that his entrepreneurship students are continuing to successfully launch companies by creating primarily online business models that don’t require face-to-face interactions to thrive. Katz offers Mission Control, a St. Louis esports startup, as an example. The company—co-founded by Chaifetz School graduates—provides a platform for recreational gaming competitions, which have served as quarantine-friendly activities this year and are only increasing in popularity.
The Chaifetz School offers an undergraduate and MBA major in entrepreneurship, as well as an undergraduate minor and graduate certificate in entrepreneurship for students or local business owners looking to bolster their entrepreneurial skills during this difficult time.
“Entrepreneurship programs at the Chaifetz School have been nationally ranked for more than 25 years because of the experiences we provide our students and the success our alumni have,” Katz says. “We’re proud of the unique education we offer and the amazing things our students go on to do as entrepreneurs in our communities.”