When the infamous Prohibition era began in the US on January 17, 1920, it didn’t just mark the rise of speakeasies and organized crime dealing in the illegal liquor trade, it also marked a time when many small businesses were forced to make massive changes to keep up with the times.
While this dry era became well known for producing the likes of Elliot Ness and Al Capone, it also serves as a stark reminder of how quickly small businesses must adapt to changing times. Several changes came about due to prohibition that you may not even be aware of. Did you know that the prohibition era gave rise to appetizers being served at restaurants?
That’s right, local restaurants – at least, the ones that didn’t try to skirt the 18th amendment banning alcohol by running secret speakeasies – quickly pivoted to offering customers finger foods such as deviled eggs and oyster toast before their entrees as a way to make up for lost revenue due to the outlawing of alcohol, thus making appetizers a common staple at restaurants today.
Also, many small distilleries turned to producing pasteurized milk since the pasteurization process was similar to the distillery process. Beer producers began offering “near beer” beverages that had 0.5% or less alcohol content, which was legal at the time. Most distilleries began producing medicinal alcohol, which was still legal during that era, and produced products such as cough syrup and medicinal whiskey. Restaurants began seating single women at tables instead of the bar area (yes, it was normal to relegate single women to the bar area back then).
Changing with the Times
While the prohibition era still fascinates the public, it certainly wasn’t the last time small businesses had to quickly pivot due to societal changes or natural disasters. In recent memory, small businesses had to quickly pivot due to circumstances like the COVID pandemic and natural disasters. Curbside takeout orders became a common offering at restaurants during the pandemic, as well as an explosion in online retail shopping and remote work.
In short, the lesson learned from prohibition and other eras of change is that small businesses always need to be ready to pivot to new offerings and new ways of doing business when the times demand it. While the Bob Dylan song “The Times They-are-a-Changin” certainly remains a classic tune, the need to be prepared for change is as urgent as ever, especially with a new presidential administration coming in.
There are several ways small businesses can be prepared for sudden changes in the business and cultural environments:
- Keep up with new technology. One of the most important ways to be prepared for change is to keep up with emerging technologies that pertain to your specific business. That means researching new manufacturing equipment, machinery and business software that can help your business stay modernized.
- Listen to your customers. Cultural norms are always changing, and your business needs to change with them. It’s crucial for your business to regularly listen to customer feedback so that you can keep up with the times. For example, your business may benefit from showing support to the “woke movement” or protecting the environment. It would benefit your business to implement customer feedback software that enables your clients to share feedback through email or texts.
- Keep your business plan updated. Your business plan is a blueprint for how your business will grow and stay profitable. It’s important to have one when applying for certain loans, but moreover, it should serve as your business’ GPS. Regularly update it to reflect how it is serving your customers’ changing needs.
- Plan for contingencies. Always have a back up plan for your business in case of disasters or sudden market shifts. While this includes having business insurance, a back up plan also should answer more fundamental questions such as where will your business operate in case of a fire or natural disaster? Are you qualified for small business financing to enable your business to quickly pivot due to a sudden and seismic market shift, such as what we saw during the pandemic?
- Maintain a strong cash reserve. Change can come without warning – as we’ve seen recently, a wildfire or hurricane can destroy your business’ inventory, or a war breaking out halfway around the world can cause gas prices and inflation to suddenly skyrocket. One of the best ways to be ready for sudden changes is to maintain a healthy cash reserve. As a small business owner, it would be prudent to set aside a portion of your business’ revenue every month towards a cash reserve that you can use when needed.
- Be flexible. One big regulatory change that could be coming is the potential ban of the social media platform Tik Tok, which could affect the way many small businesses do marketing. If this is the case for your small business, then it would be prudent to diversify your marketing strategy to include other social media channels.
Let Prohibition be a Reminder
While the prohibition era is often fondly remembered, it also serves as a stark reminder that small businesses always need to be ready for sudden changes in the economic, cultural and environmental landscapes. The need to be ready is especially important today, as world events such as a presidential election, natural disasters, wars around the world, sudden spikes in inflation and supply chain disruptions have all had a major impact on the small business climates.
Small businesses need to constantly have an eye out for change and be ready to pivot. As a small business owner, you need to take the steps that are necessary to ensure that you can quickly change with the times and be ready for any sudden changes that may come your way.
