Not Business As Usual
For the past year and a half, alumni entrepreneurs faced calamity as Minnesotans retreated indoors and commerce ground to a halt. This is how some of them coped and what they learned along the way.
Back in 2015, University of Minnesota graduates David O’Neill (B.S.B, ’15) and
Jason Dayton (B.S.,’15) were in the process of launching Lionheart Cider Co., a
craft cidery they had conceptualized during a Carlson School of Management
Entrepreneurship in Action course, created and taught by John Stavig (B.S.B.
’86), director of the University’s Gary S. Holmes Center for Entrepreneurship.
While assembling their business plan and raising capital for the company (which
has been renamed Minneapolis Cider Co.), one of the required documents was a list of potential risks the business could face. Their lawyer
helped them put it together, and one of the items on it
was a pandemic.
Dayton recalls. “I saw that and chuckled. I thought,
‘There are a lot bigger things that will impact us.’”
For writers of suspense novels and screenplays, this
is what’s known as “foreshadowing.”
As in a suspense thriller, co-owners Dayton, O’Neill, and
cidermaker Rob Fisk never expected such a seemingly
unfathomable event would become their reality, posing
the biggest challenge to their business to date.
The term “pivot” has become something of a business cliché. But it’s useful to sum up the way each of
the entrepreneurs on the following pages—all U of M
alumni—were forced to make quick course-corrections
to guide their businesses through one of the most challenging events in a century.
Rob Fisk, Jason Dayton, David O’Neill: Minneapolis Cider Co.
Jason Dayton says he learned to make cider with the help
of his father-in-law, former University agricultural Professor
Will Marsh, who learned the craft as a teenager in his native
England and took up the brewing hobby after he retired.
Marsh had set up a commercial kitchen to brew cider in his
basement, and “that got us started,” Dayton says.
The company opened its taproom north of the river
at 701 Southeast Ninth Street in May 2019. While the
business now carries 10 varieties of cider, as well as food,
it wasn’t fully established when the shutdown began in
March 2020. In fact, that February had been their best
month to date: “We were just ramping up into what we
thought was going to be more normal volume,” Dayton
recalls. The partners were also hosting events and had
launched a pickle ball league for customers.
Unfortunately, when Minnesota Governor Tim Walz’s
order to shut down came through, the founders had just
taken delivery of a “massive” new fermentation tank. They
had also taken out a sizable bank loan and were not yet
able to begin paying it off.
At that point the company did not have a full distribution operation to sell to outside vendors and was only
selling its cider at the taproom and to a few bars and
restaurants. As even those establishments closed due to
the stay-at-home order, the three owners sped up their distribution launch, beginning wholesale sales by April. Fortunately,
their bank helped them tap into other resources.
“We got going as quickly we could,” filling cans by hand, says Dayton.
By doing so, they were able to keep most of their employees working
almost full time in the expanding canning operation. They were also
able to obtain an $81,900 Paycheck Protection Program loan from the
“Thankfully, as things opened up [a year ago] last summer, we were
able to adapt the business and have an OK summer,” Dayton says. It
helped that they have one of the largest taprooms in the Twin Cities,
conducive to social distancing.
“Business is a constant evolution,” Dayton says. “We are successful
because we have been willing to throw everything out the window and
change the playbook if we need to. We’ve done that several times for
One of the concepts Dayton took from his time at the Carlson School
was the importance of “minimum viable product,” which means the
ability to learn as you offer a new product. It’s about the importance of
“getting something up and into the market and adapting and building
as you go.” Improvements like an online ordering system were also
important in adapting to the pandemic, he notes.
“In our situation, we’re not taking our business for granted. Business
changes constantly, and you need to think about worst-case scenarios
and, when planning, really game out what to do when something goes
sideways,” he says.
Kiara Ellis: The Nail Bar
Kiara Ellis’s path to becoming a business owner
started when she served as a volunteer with the
Minnesota Black Chamber of Commerce, where
she was inspired by other Black entrepreneurs.
She’s also the community engagement and education manager at the Masonic Cancer Center at the
University of Minnesota.
Ellis (B.S. ‘12), had long loved the craft and artistry
involved in womens’ nail care, and decided she wanted
to start a nail salon that would “support the diversity
of the work force that I wasn’t seeing in Minnesota.”
After opening the 100 percent-women-owned-and-operated Nail Bar in Uptown Minneapolis in
2019, Ellis spent the ensuing months building a
loyal clientele and a staff of six beauticians. When
the pandemic hit, she initially had to shut down her
fledgling enterprise. About three months later, she
was able to reopen under the new procedures and
guidelines necessitated by the virus.
“We had to create an entire Covid protocol, and
we invested in additional equipment, stations, and
furniture, with a big investment in PPE [personal
protective equipment]”, which included masks and
gloves, among other items, she says. “No one could
have been prepared for this.”
Initially, Ellis had to finance those expenses out of
her own pocket, but she eventually secured a $10,000
Paycheck Protection Program loan from the Small
Business Administration. That enabled her to cover
payroll and use part of the loan for rent and overhead
items. To restart the business, Ellis also had to hire
and train a new staff. “Two of my leads had moved
back to their home states, and one made a career
change,” Ellis says. Other employees had to stay
home due to childcare responsibilities.
“What really helped is that I am used to being
resourceful,” Ellis says about the pandemic and guiding her business through it. “When I do community
work, I know how to advocate for clients and help
them find resources ‘out there’ that will help them.
I’ve used those same skills as an entrepreneur.”
Being closed for several months caused Ellis to lose an estimated 30 to 40 percent of her annual revenue. But in recent months, the business has rebounded, and the biggest challenge now is recruiting enough replacement employees to keep up with a long waiting list of customers. “We have more customers than staff time, but we have a good buzz going in the community.”
The tumult of 2020 brought home the importance
of being resilient, says Ellis.
“There were absolutely days I thought ‘I’m done,’ but then I was able to power through it.” She took periodic rests when needed, and maintained an optimistic state of mind in the face of uncertainty, all while dealing with the stress of the death of George Floyd and the turmoil that followed, she says. And as a mother of three young kids, including one born last spring, “I have a lot going on, and I’m used to juggling a lot of things,” she says.
Kristen Denzer: Tierra Encantada
The determination that has made Kristen Denzer
a business success has served her well during the
pandemic. Seven years earlier, Denzer founded
Minneapolis-based Tierra Encantada to provide
innovative, Spanish-immersion early education
daycares, with on-site commercial kitchens to
provide fresh, organic meals. The company has
six corporate locations in the Twin Cities and a
franchisee in Virginia. (Other potential franchisees
are looking for sites in Alabama, North Carolina,
Texas, and elsewhere in Minnesota.)
Tierra Encantada enjoyed steady growth from
the start, posting 2020 profits of more than $1
million on revenue of $10 million-plus. Denzer also
recently opened a $2.5 million headquarters on
the Minneapolis Greenway, was named an Ernst
and Young Heartland Entrepreneur of the Year
in 2020, and made the Inc. 5,000 list of America’s
Denzer (B.A. ‘06, M.A. ‘08) earned degrees in
advocacy and leadership from the U of M. She’s
also completed coursework and passed the
exam for a Ph.D. from the University in evaluation
studies. She recalls meeting the pandemic “with
the mindset that I was going to do whatever I
needed to make [my business] succeed. If that
meant working 90 hours a week, that’s what I
was going to do.”
Even in a high-touch sector not exactly tailormade for social distancing, her daycare business
not only stayed open through the pandemic; it
grew. “We had some families that had to leave
because of lost jobs or other reasons,
but we also opened a new location,”
she says. The new Minneapolis
Hiawatha Avenue location, which
opened in June 2020, is its largest
and first new construction.
Along with instituting standard
public health measures during the
pandemic, Tierra Encantada opened
a new early elementary distancelearning support program when
Gov. Walz announced that schools
would no longer be required to stay
open. “There were so many families
interested, we ended up opening
three classrooms,” Denzer says.
“Some schools required parents
to be there (at the computer) for
the entire school day. That’s where
we stepped in,” she says of finding
opportunity in chaos.
To lead a business through crisis,
Denzer emphasizes the importance
of finding a good balance between
“When the pandemic started, a lot of different stakeholders were affected. Staff were concerned about their jobs, and parents were concerned about paying tuition after losing their jobs. Parents wanted us to hold their spots, but we [also] have hundreds of people on our waiting list. In situations where parents lost their jobs, we made exceptions. Balancing the decisions you make and those interests will have a lasting impact on the goodwill you have in the community.”
John Sturgess: Adogo
Lifelong dog lover John Sturgess (M.B.A. ’08), a
Carlson School graduate, applied what he learned
working for 23 years in the hotel business to the
canine world, founding Adogo Pet Hotels in 2011.
The business offers boarding, daycare, grooming,
and other services for dogs.
As of early March 2020, everything was smooth
sailing: Adogo was highly profitable, with margins
in the high 20-percents at all four locations and
increasing at least 5 percent year over year, he
says. Sturgess moved to the Twin Cities in 2000
when he was recruited to Carlson Hotels as an
executive. In fact, Adogo was coming off its best
year in 2019, with plans to open a fifth location
and some potential new acquisitions, including
one outside Minnesota.
Then came Covid-19.
“When the pandemic hit hard in mid-March
, everybody was saying ‘Holy cow, what’s
happening?’” Sturgess says. “By April, everything
Adogo’s revenue dropped like a stone, falling 85
percent from the same period in 2019. “We were
trying to understand the scope of how it would
affect us, initially and over the long term,” Sturgess
says. “Based on previous pandemic scares, the
government was talking as if this would be a
short-term [event]; the [original] PPP program
was set up to cover people for just 2.5 months.”
One of Sturgess’s first moves was to contact
the firm’s creditors and make new arrangements, assuring them “We are going to pay our bills; can
you work with us?” Creditors like Xcel Energy,
Wells Fargo, Comcast, and Centurylink were
helpful. “They looked at our credit history, and
over a 10-year period, we had not been late
That’s one pandemic—or other
crisis—lesson for business owners, he notes:
“Make sure you are consistent, and people will
work with you” if something unforeseen happens.
As it became apparent the pandemic was not
going to be a short-term event, the company
had to weigh the pros and cons of furloughing
employees. “We got to the point where we were
asking, ‘Should we be open?’” Sturgess says. The
business eventually wound up furloughing about
half of its staff for a time.
Fortunately, the state included dog daycare
and boarding in its classification of essential
businesses. Customers still needed a place to
take their dogs, so the business kept its boarding
and daycare open. Grooming was temporarily
discontinued as a non-essential service, although
the company did train some of its front office staff
to give dogs baths when needed. In addition,
Adogo obtained a PPP loan to help cover payroll
for several months.
Today, 95 percent of the company’s once-furloughed employees have returned to work.
Always be prepared for the worst, Sturgess
says. “And try to keep two if not three months’
worth of payroll costs in reserve, and a couple of
months [in] reserve for creditors—but that can
be difficult for low-margin businesses. From an
academic perspective, it’s easy to say, but not
so easy to do.”
He also stresses knowing what resources are available if needed. “I’m not a tax person, but I needed to understand any [tax] ramifications” of pandemic decisions, he says. He consulted his CPA firm, banker, and lawyer early on to stay current with the rapidly evolving PPP program. “And don’t forget your friends in the business world,” he says. “What is the circle you work in that can help you in good and bad times?”
Felipa Cespedes: FotoGenic MN Photobooth
Detroit native and U of M alumna Felipa
Cespedes (B.A. ‘13) started her business
FotoGenic in 2014, a year after graduating
with a degree in communication studies and
political science. The business provides photo booths
for weddings, graduations, and other large gatherings.
When the pandemic began, Cespedes had 10 contractors who helped her cover events and she’d just
invested $5,000 in another new booth. At the time, she
was anticipating her biggest year to date, with 12 dates
on her calendar that were double-booked with two or
three booths operating simultaneously. Unfortunately,
her primary client base then was colleges and universities, all of which cancelled upcoming graduations and
other events shortly after the pandemic hit. (Cespedes
also works days for the Office of Higher Education.)
Faced with this dramatic business challenge, Cespedes
didn’t waste time. With in-person events cancelled for
the foreseeable future, she switched to a strategy better suited to the conditions, developing a cloud-based format that allowed her clients to use their own cameras
or phone links to create online galleries of their events.
Online, she created decorative “overlays” to frame clients’
photos, and she encouraged clients to post new photos
hourly during events to attract online viewers.
The online option was well received, Cespedes says,
even though it didn’t provide as many bookings as she
hoped. But it helped her stay in touch with her event clients
during the quarantine. “It felt good to get any bookings
when the world had stopped,” she says.
In retrospect, Cespedes also reaped benefits from using downtime to work on back-office functions. She updated her website, reviewed contracts and bookkeeping, processed reports, and obtained online reviews from her clients. She also ramped up her marketing efforts, using Google Ads, promoting “word of mouth” to increase referrals, and doing whatever media interviews she could. The event business finally started rebounding in April this year, mainly in the form of weddings, birthdays, and other family celebrations, Cespedes says. “We have seen an increase in bookings, for sure."
Chris Bjorling: Copper Hen and Copper Cow
A 2009 accounting graduate of the U of M, Bjorling
(B.S.B. ‘09) and his wife, Danielle, opened Copper
Hen Cakery & Kitchen in Minneapolis in 2014. Four
years later, they opened the Copper Cow restaurant
Before the pandemic, the restaurants had produced $2 million in revenue for 2019. In addition,
their Gray Fox Coffee Bar in downtown Minneapolis
generated another half million. The company had
about 100 employees.
Then in March 2020, the need to close suddenly
created a “yo-yo” effect, Bjorling says. He would
reopen Copper Cow the following month for takeout
only; the other two businesses remained closed
because they didn’t lend themselves to distanced
service. But the Bjorlings had previously added a
drive-through pickup window at the Cow, which
proved to be “huge” to ramp up sales, Bjorling says.
Back when he was preparing to open his first
restaurant, Bjorling received business plan assistance from the Carlson School’s entrepreneurship
department. Looking back, Bjorling appreciates his
professors’ emphasis on the uncertainty that business
owners typically face. “You work really hard to build
a business model that works for what you created,
and then build a solid-performing business. But this
experience just shows that anything can happen, and
the need to stay flexible and nimble is always there,”
he says. “My accounting degree also helped quite
a bit. Staying close to the numbers is important in
any business, especially when you’re going through
significant change. Inventory is perishable and there
are a lot of things that can go wrong. It’s easy to see
dollars walk away really fast.”
Bjorling says his Gray Fox Coffee concept is
showing more promise now as landlords try to draw
tenants back into office settings and buildings by
offering more amenities. The Bjorlings have opened
several additional lobby coffee shops since March.
“It’s been a horrible year and tough to get through, but we’re starting to see unique opportunities on the other side,” he says. “It shows that when things seem challenging or difficult, there are still opportunities if you stick with it and know where to look.”
How to Manage Through a Crisis
“Whether you’re an entrepreneur or
in sales, it’s important to be able to
separate the conditions you’re facing
from your own ability and develop
the confidence and persistence to
continue,” says John Stavig, managing
director of the Gary S. Holmes Center
for Entrepreneurship at the Carlson
School of Management.
“We always teach that failure
creates opportunity; the more movement, growth, technological change
and innovation there is, the more
opportunity there is for new entrants
to come in. People who are able to
launch and build companies are used
to dealing with that type of environment and thriving.”
A lot of entrepreneurs aren’t necessarily risk takers, Stavig says, but “they
can see opportunity from change, and
can identify trends and problems and
see those as opportunities and enjoy
solving those problems.” For instance,
faced with quarantine conditions,
restaurants shifted to takeout, and
found ways to be more efficient and
get closer to their customers and the
In a crisis, “the mindset of being
opportunistic doesn’t mean taking
advantage; often, it involves helping
people,” says Stavig. “In lot of ways
entrepreneurship is learning how to
survive and stay open. Entrepreneurs
deal with challenges every day, but
over the past year, the challenges
been much bigger and greater.
“As an entrepreneur, you realize that there are a lot of people depending on you and the continuation of your business. That’s what a lot of entrepreneurs take the greatest pride in—what they do for their employees and their families and customers and the broader community,” he adds. “Nobody would have blamed [these business owners] for quitting. The rational thing might [have been] to throw up their hands and say, ‘This isn’t fair,’ but they were committed to finding a way through this.”