Posted on: May 29, 2020Posted by: moniolaoComments: 0
Stella’s Pop Kern is a locally owned business in Washington D.C that sells gourmet popcorn. Kristina Kern’s love for the food industry inspired her to create this now, well-established business that has been running for several years; however, the COVID-19 crisis proved to have a significant effect on her business and below Kristina will explain how.
[Moniola] How has this crisis affected your business financially and was this financial effect gradual or abrupt?
[Kristina] Abrupt. So, basically, I did not set my business model up to make money by selling a bag of popcorn at a time. As a result, my business model really depends on catering, and when this hit I immediately lost over $7500 in business, so that was like “boom gone.” So what I did because of the crisis, because 100% of the people that work for me live in the city and take public transportation to get to work, was close my business on March 15. I wasn’t going to ask them to risk their lives to sell bags of popcorn when I knew that the way I make business, or make money in my business rather, is by doing catering and I knew that all the catering was gone. Because of the crisis, everyone canceled for all the April events that I had at that point. So, clearly it’s impacted my business in a very bad wa
[Moniola] What steps have you now put in place to combat the financial obstacles that have come in these times, and have they have been effective?
[Kristina] So the first thing I did was I, well actually I kind of did a lot of things at the same time, but I applied for a SPA grant, then I applied for a VC grant, and then I also did the PTP loan application. I did three things that I knew were legit and could potentially assist me in this time because typically as a business owner you set up an operating account and prepare for disasters, but when all of this kind of happened at the same time, my payroll company had not filed a VC […] for my business for multiple years. As a result, at the same time as COVID, I was hit with a massive tax liability. So, it has been a crazy hurdle for me for sure.
[Moniola] Is there anything that you believe the government or every day people can do to support local businesses, in these times, that has not been done already?
[Kristina] Well, clearly all of us feel the same way. I would imagine that testing is the key so that we can figure out who can go back to work. And as soon as that piece of the equation has been figured out, I can then feel pretty confident to open my business back. It still isn’t going to necessarily bid well in terms of catering for me because of the whole physical distancing aspect of COVID-19, because people aren’t going to be throwing events at this time necessarily. So, I think that testing would super helpful, and that way that would give me the confidence, as a business owner, to feel like I am not putting people at risk to come to work for me. So, I can open that aspect of my business even though I will probably lose some money by opening back up just based on how, again, I’ve set up my business.
[Moniola] In general what do you think is important for business owners to understand during troubling times like these?
[Kristina] To always have a sizable operating account and to make sure that you have funding for these types of problems. You know, as said in the olden days “have money for a rainy day.” I think that this type of thing can certainly happen at any time, and as a small business owner you should run your business and make sure that you have enough money. I’ve had to work out a situation with my landlord because I had that tax liability, but if I hadn’t had that tax liability I wouldn’t be in such a bad position. So, I think business owners need to plan, and you always need to think before you open a business. But, because I’ve had my business for a long time I know that you need to be able to, especially the first couple of years, have at least a year of income or a year of money to live on.
[Moniola] Do you think that, as a result of a crisis like this, the future of business lies online and in a virtual world; if so, how long do you think it will take us to fully achieve this?
[Kristina] Absolutely do not think so. I do not think that we have to move to that. I mean, that is one aspect of my business. The reason I chose to close my business is really primarily because we are in an urban environment so all of my employees live in the city, and when you live in the city, you pretty much take the metro and you take buses. So, that’s really why I closed. I mean I already engage in online commerce, e-commerce, but I don’t think so; I think that as soon as we figure out about this and learn more about this virus and the disease that we’ll be able to resume life as it was and including business. I think that as humans we need to be together, and your community is so important. And small businesses especially, and all businesses right now are suffering except for all the grocery stores, which are not suffering and they’re all doing well, but we’re all suffering right now. So, I think that if we took that away and we aren’t able to engage the way we’ve been able to engage through these years that we’ll be taking away a part of who we are, and I don’t think that’ll ever work.
[Moniola] In general, in your opinion, what are the most important factors a potential business owner must consider when starting or running a new business?
[Kristina] So having lots of working capital 100%. As I’ve already mentioned, you have to have working capital for at a minimum a year, if not longer. You also need to have the capital to be able to sustain your own household because without that you’re going to fail. And I can’t even tell you how many businesses I’ve seen fail because they think I’ve got this great idea but they don’t think it through. And there are some people, and I think that this is also a factor of social media, that have gotten real lucky and their business was a success out of the gate; that is not the norm, and that is absolute luck. When I first started my businesses, I was going in the direction of getting a SPA back loan, a business loan, and at the time my daughter was 9, and I thought if I get a loan to start a Brick and Mortar, which is the direction I was going in, the only thing I have for collateral is this home that I’m paying for my daughter and for myself. I realized that was not smart because what if it didn’t work? And I do think you have to think in those terms. You can’t delude yourself into thinking that just because you think you have a great business idea that it’s going to work. Even if you do market research. Which I did not, I just had always been in the food business and I knew that my background was such that I knew that I was able to tap into what people really like. So, it never occurred to me that people wouldn’t love gourmet popcorn, especially what I do to it. So, I would tell people to be realistic, and to have 1 to 2 years of operating income, or capital rather, and have money to be able to live during that time. Living and your business are completely two different ‘babies’.
[Moniola] Is there anything else you would like to say about business, finances, COVID-19, or anything in general?
[Kristina] I’m ready for it all to end. The one thing that I feel is such a letdown in all of this is that there’s not a coordinated effort by the federal government, and that’s a disappointment to me. It’s very, very sad, but I’ve used this time and gotten to know some really cool health care professionals, because I donated a bunch of product to different hospitals in D.C. So, I’ve gotten to know some really cool people which has been really nice and that’s one silver lining in all of this. I donated thousands of dollars worth of product to “So Other’s Might Eat,” which is a nonprofit organization in D.C.