SBA Steps Up to the Plate for Smallest Businesses

You know it. It’s tough being a small business nowadays. The pandemic has hit your company and hopes hard.

According to estimates, roughly 3 out of every 10 small businesses that were open in New Jersey at the beginning of 2020 are now closed as the coronavirus pandemic — and vast restrictions to fight it — have taken a big bite out of the economy.

In the Garden State, as of February 10, 2021, total small business revenue decreased by 39% compared to January 2020.

The White House and the Small Business Administration has heard your pain and is stepping up to help small businesses, especially those with fewer than 20 employees – the mom-and-pop establishments that line the Main Streets of every town.

On Monday, February 22, the White House announced a number of steps to increase lending to the smallest of businesses.

The reforms, some of which will begin Wednesday, February 24, include:

• Exclusive period: At 9 a.m. Wednesday, the SBA will begin a 14-day exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees. All applications already submitted by lenders to the SBA before the start of the exclusivity period will still be processed by the SBA.

• Help for sole proprietors: A revision of the PPP funding formula for sole proprietors, independent contractors and self-employed individuals will allow them to use the gross income line on Schedule C. The SBA is also setting aside $1 billion for those businesses without employees in low-to-moderate income communities. The White House said these businesses make up a significant majority of all businesses and include cleaning services, home repair contractors, personal care businesses and small independent retailers, among other examples. And approximately 70% of non-employer firms are owned by women and people of color, compared to 40% of employer firms. In addition, 95% of Black-owned firms and 91% of Latinx-owned firms are non-employers.

• Fairer access: The White House is promising fairer access for returning citizens by eliminating the PPP eligibility restriction that did not allow those with a felony within the previous year to apply (however, the restriction on those with an arrest or felony conviction related to financial assistance fraud within the previous five years remains).

• Increased access: The SBA will now allow those who have struggled to make and are now delinquent on federal student loan payments to apply for the PPP. It also will ensure access for immigrant small business owners who lawfully reside and pay taxes in the U.S. by clarifying that Individual Taxpayer Identification Number, or ITIN, holders can apply for the PPP.

Here are the latest numbers for New Jersey.

Loans: 50,451;

Total funding: $4,399,596,313;

Average loan: $87,205.

For more information visit https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.

Small businesses in the Garden State can also visit the New Jersey Small Business Development Center at www.njsbdc.com.

E-commerce Sales Grew 30%-plus in 2020

It’s a no brainer but online sales expanded last year. The reason? The pandemic is keeping people at home, glued to their computers.

The US Census Bureau published the latest data that revealed Americans spent $791.7 billion during 2020 on e-commerce, up 32.4% from 2019. “That behavior translated to e-commerce accounting for 14% of total retail sales, compared to 11% in 2019,” CNBC reported.

In other words, total 2020 retail sales were up just 3% … meaning that e-commerce sales were up more than 10 times as much as total sales.

“While consumers shopped online before the pandemic, they were pushed to rely on digital retailers even more during the Covid-19 pandemic, as many physical stores were closed and people opted to stay indoors as much as possible to slow the spread of the coronavirus,” CNBC observed. 

“Consumers filled up their virtual shopping carts with products that they might not have otherwise ordered online, particularly groceries, according to a chart published by the U.S. Census Bureau. Online purchases of food and beverage items grew more year-over-year than any other category between the second and fourth quarter of 2020.”

Launching or expanding your online capabilities now would be a good idea for your small business.

 

Congress can Support the Foodservice Industry

Everyone is suffering because of coronavirus, however no other industry or sector of the economy has suffered as much as the foodservice industry, and no other industry will take as long to recover, believes the International Foodservice Distributors Association (IFDA). COVID-19 closures and the economic downturn have crippled restaurants and the farmers and distributors that supply them their food and supplies. A recent study found that 85% of independent restaurants may go out of business by the end of 2020.  Recovery has gone from a temporary challenge to a seemingly permanent industry disruption. 

IFDA is convinced that Congress can help but the lawmakers should be apprised of the dire situation faced by restaurateurs around the country.

Support the Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive (RESTAURANTS) Act of 2021
The RESTAURANTS Act is bipartisan legislation that establishes a $120 billion revitalization fund to support independent restaurants and small franchisees as they deal with the long-term structural challenges facing the industry because of COVID-19.The bill provides real relief for any small restaurant that can demonstrate they lost revenue in 2020.  Federal grants under the bill can be used for everything from retaining workers to operational expenses like inventory and rent. 

What are the details?

$120 Billion Fund: The RESTAURANTS Act establishes a $120 billion “Restaurant Revitalization Fund” managed by the U.S. Department of Treasury to provide direct grants to eligible entities.
Coverage Period: Begins February 15, 2021, and ends 8 months after enactment of the program. If funds are not spent within 8 months of enactment, the entity’s funds convert to a loan with an interest rate of 1% with a maturity date of 10 years.
Who is Eligible: An entity that owns or operates—as of March 13, 2020—20 or fewer establishments (together with any affiliated business), regardless of the type of ownership of the locations and whether those locations do business under the same or multiple names. Entities can be a restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premises of a beverage alcohol producer where the public may taste, sample, or purchase products, or another similar place
of business in which the public or patrons assemble for the primary purpose of being served food or drink.

How can you help?

Share the quotes or articles below to spread awareness. Write your legislator using the IFDA Legislative Action tool. Post messages and images on social media. Visit https://www.ifdaonline.org/

Remember Twitter? It’s a Useful Research Tool for Your Business

Twitter has been around for 14 years. Every second, on average, around 6,000 tweets are tweeted on Twitter, which corresponds to over 350,000 tweets sent per minute, 500 million tweets per day and around 200 billion tweets per year.

You’d think that most people – most business people – have a good sense of how to use Twitter to promote your businesses, products, services and knowledge; how to become a thought leader thanks to Twitter.

However, there are still fascinating depths of social media knowledge and experiences to be plumbed.

As I have written in the past, in order to become a thought leader in your industry or marketplace, you need knowledge and a means to convey it to others. A couple of days ago I came across a Reuters story about the Bank of Italy using Twitter to track consumer mood on pricing. And what business wouldn’t want to know what consumers think about prices?

The wire service reported on February 15 that the Bank of Italy stated that a set of experimental indicators that it created based on the content of millions of tweets accurately tracked consumer mood on price, offer scope for a powerful new monetary policy tool.

The Italian bank found its indicators not only tallied with final inflation read-outs and existing measures of price expectations by Italy’s national statistics office, financial markets and other forecasters but were also in real-time and provided more granular detail.

“The results suggest that Twitter can be a new timely source for devising a method to elicit beliefs,” the authors of the 107-page study were quoted as indicating, adding they believed the Italy-focused research could be replicated elsewhere.

The study started by gathering 11.1 million tweets posted in Italian between June 2013 and December 2019 containing at least one of a set of previously selected words related to inflation, prices and price dynamics.

“The rationale for focusing on pure raw tweets count is the intuitive notion that the more people talk about something, the larger is the probability it reflects their opinion and that their view can influence other people’s expectations,” the report said. Then the dataset was “cleaned” to delete advertisements or tweets that use the word inflation in an unrelated context.

In this way, for example, tweets such as “#Draghi: ‘We saved Europe from deflation.’ Do not count your chickens before they are hatched!” were kept, while others, such as “Only at Baby Glamour if you buy three items the least expensive is free. Promotional sales until October 10” were filtered out.

The remaining dataset was used to build two indices on expectations of increasing or decreasing inflation by measuring the daily volume of tweets containing previously selected word combinations such as “bargain price” or “very high price.”

“The fact that economic agents talk about expensive bills should reflect expectations of higher inflation,” the report said. “On the other hand, people discussing declining oil prices should correspond to expectations of lower inflation.”

The final set of indicators was then created based on divergence between the two indices.

The authors said their work underscored the significance and policy implications of information contained on social networks but acknowledged further study was needed to interpret the data.

They also noted that there were a few cases of a Twitter-based indicator been thrown off course by a viral social media event, for example when the sale of an apartment for a record-breaking $236 million in 2014 led to a flurry of tweets containing variants of the phrase “more expensive.”

Granted, this was done by a large national bank over several years. Nonetheless, parameters or hashtags # can be created – or borrowed from common usage – to monitor thoughts in your microcosm to ascertain consumer opinions regarding prices or other issues in your marketplace. An original hashtag may not get many hits in the beginning but in time its appearance in Twittersphere will generate greater numbers. Borrowed ones may be immediately popular. You should also use Twitter reach services, such as Tweetreach.com, to gauge your estimated reach and exposure, and then read the senders’ opinions.

This won’t work without your daily attention. You, as the small business owner, must monitor the results on a daily basis to comprehend what’s going on.

For example, you are a baker and you own a bakery, here are some possible hashtags in your business that you could track: #baking #bakingisfun #bakersgonnabake #instabaking #lovebaking #instabake #lovetobake #bakersofinstagram #bakinglove #bakingfromscratch #bakery #baker #cake #cookies #dough #sweet #pastry #confectionery #bakeshop #patisserie #tortes #pie #applepie and so on. For ideas, you can Google for hashtags in your business. Don’t forget to add your signature baking creation and your town.

As you’re waiting to open your business safely, take some time to compose your own business hashtags.

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Roaring ‘20s Rebound

I read the other day about the French cosmetics group L’Oreal’s expectations about life in the not-too-distant future.

But first let’s go back in time about 100 years.

Let’s go back to the historic, freewheeling, happy-go-lucky Roaring ‘20s.

That decade didn’t only mean The Untouchables and the mob in major American cities but it also was a period of time from 1921-1929, following the First World War, that offered economic prosperity with a distinctive cultural edge. The period was marked by mass consumerism, as Jazz-Age flappers and speakeasies flouted prohibition laws and the Harlem Renaissance redefined arts and culture.

The 1920s were called “roaring” because of their exuberant, carefree popular culture. It was a time when many people defied Prohibition, indulged in new styles of dancing and dressing, and rejected many traditional moral standards. The nation’s total wealth more than doubled between 1920 and 1929, and this economic growth swept many Americans into an affluent but unfamiliar “consumer society.”

Just to further stoke memories, it was a period when people said: elephant’s adenoids, cat’s meow, ant’s pants, tiger’s spots, bullfrog’s beard, elephant’s instep, caterpillar’s kimono, turtle’s neck, duck’s quack, duck’s nuts, monkey’s eyebrows, gnat’s elbows, oyster’s earrings, snake’s hips, kipper’s knickers, elephant’s manicure, clam’s garter, eel’s ankle, leopard’s stripes, tadpole’s teddies, sardine’s whiskers, canary’s tusks, pig’s wings, cuckoo’s chin, and butterfly’s book.

What did those words mean, who knows but they sounded like fun and the people wanted to have fun.

Now flash forward to 2021. We’ve been enduring the COVID-19 pandemic and on-again, off-again lockdowns for almost 12 months. Everyone is fed up and stir crazy. Men, women and kids of all ages have just about had it. And now word comes along from officialdom that slowly we’ll be opening small businesses, restaurants and bars, and sports venues. Are we beginning to see the light at the end of the tunnel?

L’Oreal thinks so.

L’Oreal forecast on February 11 a strong rebound in makeup sales when the COVID-19 pandemic gives way to a “roaring 20s” when people get dressed up and go out again to socialize.

Buoyed by this optimism, shares in L’Oreal, rose after the group reported higher than expected fourth-quarter sales growth, broadly outperforming a cosmetics market hit hard by the pandemic. The cosmetics company that profits on consumers’ emotions and desires said with many hair salons still closed and millions of consumers in lockdown, it was cautious about prospects for the market. However, it forecast that the 4.8 % comparable sales growth seen in the past three months of 2020 would continue into the first quarter.

L’Oreal CEO and Chairman Jean-Paul Agon was quoted as saying sales would accelerate sharply as COVID-19 vaccines are distributed and levels of infection subside.

“People will be happy to go out again, to socialize,” he said at a presentation of the company’s results. “This will be like the Roaring ‘20s, there will be a fiesta in makeup and in fragrances,” he said, referring post-war economic boom, when people wore daring fashions and partied.

This may also send hopeful signals to many distressed small business owners across all markets, hankering to open their doors and greet customers. Indeed. Consumers and businesses deserve a reprieve after a very stressful year filled with death and disease. If the prognostications are accurate, then before you hang the “Open” sign on your door, prepare, plan and promote your intentions. Get your supply chain involved. See guidance, advice and knowledge.

However, let’s keep in mind that if we’re not careful and we go overboard with exuberance then the coronavirus can return with a vengeance.

To be the cat’s meow on Main Street, you gotta use your noodle and don’t take any wooden nickels.

Incentivizing Employees to Get Vaccinated? Be Careful

Sure, you want to reopen your small business in the safest possible manner and then keep it open. You want your employees that are essential to your running a profitable company to be safe so your customers will also be safe and will return.

The worse thing now would be for someone to contract covid-19 in your place of business and then have health officials trace it to your establishment. Just imagine the negative publicity.

Many small businessmen and women are anxious to open because, after all, it’s their livelihood and passion. In order to create a safe environment, many company owners are offering their employees a range of incentives and encouragements to get vaccinated so that the risk of transmission is reduced. The news has been replete with such examples.

Several major employers, such as Dollar General, McDonald’s, Kroger and Olive Garden, have announced incentives for workers to get vaccinated.

With healthy employees, the business will stay open. It will also potentially limit downtime when workers contract the virus. Experts say a high proportion of the US population needs to get vaccinated to build herd immunity, which would limit the coronavirus from spreading.

But for now, according to US Today, some employers are saying that they’re merely strongly encouraging vaccination but essentially forcing workers to do it on their own time. Others are stepping up to the plate, thinking that proactively encouraging their employees to get vaccinated is better.

However, among others, Denise Rousseau, professor of organizational behavior and public policy at Carnegie Mellon University's Heinz College, observed that it doesn’t make sense for businesses to refuse to give workers a few hours of paid time off to get vaccinated. Others opined that it’s the moral thing to do.

Generally, employers can require their workers to get vaccinated as a condition of keeping their jobs, with a few notable exemptions. But legal experts and health advocates say most companies won't make covid-19 vaccinations mandatory for their employees. Instead, helpful employers will look for ways to make it easier for their workers to get shots.

For example, grocery stores, which were among the first businesses to implement covid-19 safety measures such as mask requirements, are also the early leaders when it comes to offering to compensate their hourly workers for the time it takes to get vaccinated.

At McDonald’s, which had about 205,000 employees globally as of early 2020, US workers will be given four hours of pay to get the vaccine. The policy does not cover the 93% of its restaurants that were run by franchisees as of a year ago.

Darden Restaurants, which owns Olive Garden and LongHorn Steakhouse, will provide two hours of pay for each of two recommended vaccine doses.

Some grocery chains are providing incentives to workers to get vaccinated. Lidl is giving workers who get vaccinated $200 in extra pay, while Kroger is offering $100. Aldi and Trader Joe's are providing workers two hours of extra pay for each dose. Starbucks is offering two hours of paid time off for each dose. And discount retailer Dollar General is offering four hours of pay after workers receive their final dose of a vaccine.

US Today reported that Dollar General’s archrival, Dollar Tree, will not provide time off or extra pay to workers.

“We strongly encourage our associates to get vaccinated and will support them by providing flexibility in scheduling and ensuring they incur no costs for the administration of the vaccine,” Dollar Tree spokesperson Kayleigh Painter said in an email.

Yogurt maker Chobani said it will provide six hours of time for its employees to get vaccinated, including its manufacturing workers.

Others, including Amazon, Target and Walmart, are not committing to provide any extra pay or time off to workers to get their shots.

In some cases, employers that are offering vaccination incentives are requiring proof – a bureaucratic trail – of inoculation to get their extra pay or certify their paid time off. They feel that’s only appropriate inasmuch as they work in an environment with co-workers who may want to know that their co-workers actually follow a protocol. But are they legally entitled to this information and in what manner?

What’s an employer to do? It’s a dilemma. You could be damned if you do and damned if you don’t.

According to a recent report by Perceptyx, six in 10 workers would get the covid-19 vaccine if their employers provided a $100 incentive. Workers who feel their manager cares about them as human beings are more likely to get the vaccine.

Those are some of the findings revealed in by Perceptyx, which polled more than 1,000 workers across the country. 

Workers remain split on requiring the vaccine to return to work: 53% said employers should not require the vaccine, and 43% said they’d consider leaving their company if required to be vaccinated. 

These feelings were even more prevalent among essential workers: 60% said employers shouldn’t require it, and 51% said mandatory vaccination might cause them to leave their company. Still, 64% of those polled by Perceptx said there is no safe return to work until all employees are vaccinated. About 54% said they would feel safe returning to the workplace as long as they had received the vaccine, even if others hadn’t, and 52% would get the vaccine so they wouldn’t have to wear a mask at work, although the Centers for Disease Control and Prevention recommends wearing a mask even once fully vaccinated.

According to Biz Journal, legal experts have noted that employers are better off encouraging employees to get vaccinated against covid-19, rather than requiring it, since mandates could backfire and workers could pursue legal exemptions. An increasing number of companies are offering enticements to motivate workers to become vaccinated. 

“We do not want our employees to have to choose between receiving a vaccine and coming to work, so we are working to remove barriers (e.g., travel time, mileage, child care needs, etc.) by providing frontline hourly team members with a one-time payment equivalent of four hours of regular pay,” Dollar General said in a statement.

After reading about these options, it becomes clear that employers should be concerned about their workers but if they offer any incentives, hours off or extra dollars, then perhaps it would be better to create a system that does not require a record. Indeed, give your employees time off to get vaccinated with an honor system and not making a list otherwise the unintended consequences of trying to be helpful could result in lawsuits.

Here are a few other points to take into account:

• If you make a list, what will you do with the information you collect from employees about the administration of the vaccine, or the refusal to get the vaccine? Will you be coaxed by officials, hospitals, or manufacturers into revealing this data?

• With whom will you share this information internally: co-workers, supervisors, no one, or everyone? Do they have the right to know this without permission?

• Will employees who get vaccinated be favored by employers, considered for promotion over those who don’t? How will it impact the company’s merit system? Will it become an unintentional factor? How will it work in the hiring process? Will it be a human resources nightmare?

Covid-19 has turned society and businesses upside down. Reopening is vital to the welfare of the country but be careful how you choose the lady or the tiger.

Restaurants Suffering during COVID-19

To say that the restaurant industry is suffering due to COVID-19 is a blinding flash of the obvious. Just look around.

From 2019 to 2020, COVID-19 impacted the restaurant industry catastrophically, with sales plummeting 19.2%. According to the National Restaurant Association’s State of the Industry Report, 2021 sales are projected to climb only 10.2% – not nearly enough to recover from the steep hole caused by the pandemic.

This will be the “year of transition and rebuilding,” in the words of Hudson Riehle, senior vice president of the research and knowledge group with the National Restaurant Association, and it will take time before the industry gets back to pre-pandemic levels.

• The restaurant industry ended 2020 with total sales that were $240 billion below the Association’s pre-pandemic forecast for the year

• As of Dec. 1, 2020, more than 110,000 eating and drinking places were closed for business temporarily, or for good

• The eating and drinking place sector finished 2020 nearly 2.5 million jobs below its pre-coronavirus level. At the peak of initial closures, the association estimates up to 8 million employees were laid off or furloughed

The National Restaurant Association found that 35% of off-premises customers ages 21+ are more likely to choose a restaurant if it offers the option of including alcoholic beverages with the to-go order.

For more about the restaurant industry, visit: https://www.restaurant.org/research/reports/state-of-restaurant-industry.

Foodservice operators in New Jersey can also find help by contacting the New Jersey Small Business Development Centers (NJSBDC) https://njsbdc.com/

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