How Emergency Funding Enabled My Business to Thrive Amid The Pandemic
When the world first started discussing Covid-19, it was mostly speculation because very little information was known about what was happening and why. In our globalized world, it only took a few months for the disease to spread throughout the globe, with devastating effects on both our economic and healthcare systems. For many business owners like Suleiman Shifaw, the advent of the virus meant operating his business during troubled times and navigating the sea of uncertainty.
To support struggling businesses like Suleiman’s, Acumen designed The Acumen COVID-19 Emergency Facility (AEF). AEF was designed to support Acumen Fellows and portfolio companies whose businesses and activities were either adversely affected by, or being modified in response to, COVID-19. Suleiman Shifaw was one of the successful grant applicants.
This is Suleiman’s story.
Suleiman Shifaw is the Creative and Managing Director of Savannah Printing Press, a social enterprise that produces Felek notebooks out of recycled paper. Felek’s mission is to improve the literacy levels of children from disenfranchised parts of Ethiopia by donating 8 exercise books for every notebook they sell.
Since its launch in 2016, most of Felek’s sales have come from selling notebooks at conferences and events. The company was on an upward trajectory until the pandemic hit, and the country shut down in March 2020. At that point, Suleiman only had three months of reserve funding to help Felek stay afloat. Faced with uncertainty, Suleiman had a courageous conversation with his team about an unpredictable future.
“When this whole thing started, I had so many questions that I could not answer. How was I going to keep everyone safe and still run the company? How were we going to survive? What were we going to do with the stock of unsold notebooks?” Suleiman asked.
The main question that kept him up at night was what would happen to his team?
One of the first steps that Suleiman and his team took was to start working from home in hopes of keeping everyone safe while still maintaining operations. This came with its own set of unique challenges because some of his team members did not have proper workspaces. While some lacked the tools to work from their homes, others had competing caregiving responsibilities. At the same time, the logistics of getting materials and finished products to and from their homes was quite challenging. Eventually, they decided to allow part of the team to return to the office, which came with an added cost as they had to hire private transportation.
All around them, things were getting worse. Businesses were shutting down and laying people off, leaving people’s livelihoods at stake. Impromptu layoffs prompted the government to enforce measures mandating businesses give their staff advance notice or pay them a month’s salary before releasing them.
Suleiman and his team had three options. The first was to lay off their employees and give them a month’s salary as per government policy. The second was to continue production amidst the uncertainty and see how things evolved. The last option was to pivot their business model and produce reusable face masks from a stock of over 400 cotton t-shirts they had in storage.
The Felek team decided to take the third option and produce face masks, understanding that if things didn’t work out, their employees would have to leave in a month.
And so the hard work began. One of the first things they did was to convert their previous leather-stitching machines into fabric ones. They also had to think about quality, branding, and creating distribution channels for their new face masks.
Amid the chaos, an opportunity came to participate in the Acumen & IKEA East Africa Social Entrepreneurship Accelerator Program.
“The Accelerator program was a life-saver because it allowed us to test our new product, which was the face masks. We quickly pivoted our business model to produce face masks because we felt this would keep us afloat. The coaches were instrumental in helping us refine our business model. They also walked us through developing new product systems,” Suleiman said.
Things started to look up as days went by and orders started coming in. From the onset, Suleiman and his team followed CDC recommendations when designing their face masks. This step made their brand superior to others in the market, which was already flooded with substandard face masks, and led the government to put in place measures to curb sub-standard quality. To produce a face mask, companies would have to be approved by The Ethiopian Food and Drug Administration (EFDA), which Felek was quickly granted because they were already following CDC guidelines.
Although things seemed to be running smoothly, Suleiman worried most of the time. He knew they were not producing enough to pay for rent and staff salaries, and his worries made it hard to concentrate on the Accelerator program.
With so much happening at that time, he communicated his frustration with the Acumen team.
“It was so hard to learn with the stress of the business weighing me down. They not only listened to me but a few weeks later, we got the email that AEF was going to be receiving applications from businesses like ours that had been hard hit by the pandemic,” Suleiman said.
“I, of course, jumped at the opportunity. The emergency funding would give my business a chance to gain stability, and I could buy my team more time. I was so concerned about securing their livelihood. You see, my team had proven beyond doubt that they cared about the company and myself. I felt like I needed to do the same for them,” he adds.
It is during this time that Suleiman became acutely aware of just how much his team members were dealing with in their lives. Some of them were breadwinners and depended on the money they made at Savannah Printing to make ends meet. They also had other dependents from their extended families who they supported. Losing their jobs meant a whole chain of people would be affected and plunged into deep poverty.
“It was intense. You now start looking at your team as people who have lives outside of work. When I did this, it became so clear why the business had to succeed despite the challenges we were facing,” he said.
And so, Suleiman applied for AEF with the hope that he would get funding to support his business.
It was a rigorous application process that really forced Suleiman to look at what the best use of funds would be for his team and his company, both short-term during the crisis, and longer term if they were to make it through. He stayed the course, took the feedback from the Investment Committee, and his grant application was successfully awarded.
“With this injection of capital, we could invest in buying materials from the garment factory that sold to us cheaply, increasing our profit margins. I could also now afford to keep my team for a few more months and allocate a part of the funding to support business processes. Without the funding, we would have had to shut down,” he said.
AEF made the possibility of becoming profitable within reach. The timing between Felek pivoting and needing the capital to scale was perfect. Armed with the funding from AEF, Suleiman felt like he had the opportunity to return the favor. He could now take care of his team just as they had taken care of him when the pandemic started.
In hindsight, Suleiman has come to appreciate how having the right community can help you through tough times. When Felek first started producing face masks, one of the other Acumen Fellows supported them by taking the product to market and recommending areas they needed to improve based on feedback from customers. He did this without asking for a single cent from Suleiman. Two other Fellows also purchased face masks for use in their respective organizations.
“I am so grateful to Acumen for accompanying me during this time. The team supported me in the application process and would regularly update me on where things were going. It is so hard to ask for money and tell people you’re struggling. As a business owner, you always have the urge to put on a brave face even when you’re crumbling. It’s even harder to ask for money on paper. Yet, there was so much dignity throughout the process, which was unbelievable,” he said.
“When it comes to impact investing, Acumen walks the talk. The team made sure that the process from application to disbursement was as seamless as possible. This was especially important because, in business, timing is everything,” he added.
Suleiman notes that there are so many people whose lives have changed because of AEF. Being in a position to pay salaries and continue running the business means that the livelihoods of his team members and the chain of people they support are secure. He now understands that every person has a complexity to them that we need to understand. Because of the kinds of markets that entrepreneurs like him operate in, many people find themselves grappling with poverty because of market factors outside of their control.
“AEF saved my business, my life, my employees, and their families. I am forever grateful to Acumen for supporting me throughout this process. I not only survived but also thrived during the pandemic,” he said excitedly.
From his experience, he has learned three big lessons.
First is the importance of investing in your team. When you look at your employees as real people, they will give their all to make the business successful. You need to make their problems your problems. When they’re sick or going through challenges, you must stand by them. You need to ensure their lives matter to you as a friend, a colleague, and a family member.
The second lesson is the importance of community. As an Acumen East Africa Fellow, Suleiman notes that he feels a great sense of responsibility to give back to the community. Part of this means showing up for Acumen and contributing to the community in whatever way he can. He is also very grateful for the accompaniment from the Fellows who bought his face masks and supported his product development process for free.
The final lesson is realizing the deep level of resilience an entrepreneur needs to succeed. When he started, things seemed hard. He still can’t believe Felek has sold over 250,000 face masks amidst the pandemic. Savannah Printing made the most sales during the pandemic, which was a huge surprise to Suleiman . He notes that when you’re resilient, things will work out in your favor .
“Our Felek Face masks are the most recognizable brand in the market. People who didn’t know us before the pandemic have no idea we had other products in our line. Now that the face masks production has reduced, we are also talking to them about buying our notebooks, which is a win,” he says.
