If you’re a small business owner, freelancer, solopreneur, or entrepreneur who has built a company that isn’t publicly traded, there is a chance you applied for Paycheck Protection Program (PPP) relief, a $349 billion program designed to benefit businesses that can’t obtain credit elsewhere or who are underbanked.
And you’re meekly asking around to see if you’re the only one who got the dreaded “we ran out of money” email from your local bank after you jumped through several hoops to apply into a black hole with no responses or returned phone calls.
The $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act unanimously passed in the Senate on March 25, and signed by President Trump on March 27. The Act includes the PPP which gave Americans hope in the form of 2-year loans of up to $10 million for companies with under 500 employees, forgivable if applied to payroll, mortgage interest, rent, and/or utilities.
Meanwhile, over 40,000 Americans have died from COVID-19. It’s hard to be outraged under these conditions, but people are angry. Sure, some are violating stay-at-home orders to protest, but I don’t believe it’s simply because the economy is frozen, but because we were all given a false sense of hope. The PPP was thrown into choppy waters as a life preserver, but it was never intended for actual small businesses. The growing anger is from entrepreneurs and freelancers embarrassed to ask others if they’re the only ones to get rejected.
The truth is that most were rejected. And now carry that pit of fear in their stomachs, which is blossoming into anger. Sure, President Trump said that companies will have to “return” funds if they were “inappropriate,” given how many major institutions got funds, but that doesn’t help anyone today.
Politicians are nearing a deal on the second round of PPP, but small businesses are confiding in each other that they don’t believe they’ll receive help this time, either. With roughly 700K pending applications, and an estimated $310 billion which could become available in the second round of PPP, that rounds out to $442K per applicant, but will the cap remain in the millions, edging out smaller companies? Again?
There is a growing sense of dread and jadedness in this community that is becoming contagious as we compare notes (all of which look suspiciously similar).
If your local politician doesn’t understand how the entrepreneur community views them right now, show them this quick (but poor quality) clip from The Campaign:
You may think the growing outrage is because there are so many open mouths right now expecting the government to swoop in and feed them, but that’s not it. The rage is because once again, the little guy got screwed.
Under the PPP, Harvard University received $9 million, and responded to the public outrage by promising to apply funds to financial assistance to students. That’s neat, but what does that have to do with paycheck protection!? It’s literally in the name of the damn program. They have the largest endowment in the nation, sitting at a sweet $49.5 billion, so you can see how a copywriter in Dallas whose landlord is waiting to be able to file eviction is frustrated.
Under the PPP, according to recent Securities and Exchange Commission (SEC) filings, 71 publicly traded companies received emergency funding. SEVENTY. ONE. You can see how a 10-person graphic design firm in Nashville is frustrated.
Under the PPP, Ruth Chris Steak House (who has a $250 million valuation and 150 locations) received $20 million. They said in a statement that they applied so they can be “well positioned to emerge from this situation a strong and viable entity.” Are you effing kidding!? Please tell that to the day care operator in Kansas City who already laid everyone off and was told by politicians that the PPP was their lifeline. Strong and viable? Small businesses just want to stay open.
Under the PPP, Potbelly sandwich shops received $10 million despite having over 400 locations and an $89 million valuation. SEC filings also indicate that Kura Sushi USA received $6 million, Fiesta Restaurant Group (operating Taco Cabana and Pollo Tropical) snagged $10 million, and J. Alexander’s Holdings received $15 million for their 47 restaurants in 16 states.
Notice a trend here?
Shake Shack made a public splash by giving back the $10 million they received under the PPP, noting they had access to other funding, given that they have a $16 billion valuation, 7,600+ employees, 200 of whom were already laid off, and roughly 800 furloughed. The company explained that they applied because the CARES Act allowed any restaurant with under 500 employees per location to qualify.
Did you catch that? ALL RESTAURANTS WITH UNDER 500 EMPLOYEES PER LOCATION QUALIFIED. How many single restaurant locations do you know of that employs over 500 people?
Shake Shack accidentally explained why the first round of PPP failed. It was never designed for small businesses, and especially not for freelancers or gig workers as politicians had so optimistically promised.
Meanwhile, you have JPMorgan Chase bragging that they gave out more PPP funding than any other bank. Credit unions and small banks aren’t processing the same volume, and it is unclear as to whether the SBA is favoring large banks, large accounts at large banks, or if the little guys just took too long to figure out how to get help for their customers. But what is clear is that banks have gotten paid, as $6 billion was given to banks processing PPP funding. Did the SBA favor large companies, or did banks?
Either way, banks got paid billions. Smaller account holders did not.
Also frustrating, the Small Business Administration (SBA) refusing to be transparent about who the PPP recipients are, whereas SBA loans are typically public information (company names, executives, addresses, etc.) and they say only nominal amounts have funneled down to hospitality, in clear conflict with reality. Further, few have received aide under the SBA’s Economic Injury Disaster Loan (and grew frustrated at conflicting information ranging from large amounts available, to $10K grants, to maybe only $1K per employee).
It remains unclear who is screwing the little guy here – politicians, the SBA, banks, or all three simultaneously.
Small business owners Duncan and Rita MacDonald-Korth started a petition calling on the second round of PPP funding to be limited to companies with under 250 employees, and that half of all funding be reserved for those with under 50 employees. They call the first PPP round “flawed from top to bottom,” having done “very little to help genuine small businesses and instead has benefited large companies who have used subsidiary entities to benefit disproportionately and unfairly.”
Companies are banding together to sue Wells Fargo, Chase, and U.S. Bank claiming the banks “front-loaded applications for larger loans and focused on loans for $150,000 and under at the tail end of the program before it lapsed.”
Sure, you have companies like software company 75F in Minnnesota who have gained attention for publicly rejecting the help they applied for, but given the $18 million they raised in venture capital funding last year, solopreneurs are quietly reading that headline from home, wondering if they’ll ever be in line for help if companies like that qualified for PPP.
On Twitter, Senator Marco Rubio (R-FL), chairman of the committee overseeing small businesses, has softened over time, now saying that the PPP wasn’t designed to reach multiple subsidiaries of a national brand, and that “should be corrected.”
Should be corrected? You’re damn right.
There is growing fear which breeds anger, and actual small businesses are getting screwed, thinking they’re alone in their failure.
With the PPP’s lack of transparency and misallocation of funds to massive businesses, it is no wonder people are enraged. People are realizing they’re not the only one feeling betrayed by this false sense of hope, and we’re seeing entrepreneurs begin to compare notes. Trouble is brewing.
Leadership versus management: What’s the difference?
(Business News) The two terms, leadership and management, are often used interchangeably, but there are substantial differences; let’s explore them.
Some people use the terms “leader” and “manager” interchangeably, and while there is nothing inherently wrong with this, there is still a debate regarding their similarities or differences.
Is it merely a matter of preference, or are there cut and dry differences that define each term?
Ronald E. Riggio, professor of leadership and organizational psychology at Claremont McKenna College, described what he felt to be the difference between the terms, noting the commonality in the distinction of “leadership” versus “management” was that leaders tend to engage in the “higher” functions of running an organization, while managers handle the more mundane tasks.
However, Riggio believes it is only a matter of semantics because successful and effective leaders and managers must do the same things. They must set the standard for followers and the organization, be willing to motivate and encourage, develop good working relationships with followers, be a positive role model, and motivate their team to achieve goals.
He states that there is a history explaining the difference between the two terms: business schools and “management” departments adopted the term “manager” because the prevailing view was that managers were in charge.
They were still seen as “professional workers with critical roles and responsibilities to help the organization succeed, but leadership was mostly not in the everyday vocabulary of management scholars.”
Leadership on the other hand, derived from organizational psychologists and sociologists who were interested in the various roles across all types of groups.
So, “leader” became the term to define someone who played a key role in “group decision making and setting direction and tone for the group. For psychologists, manager was a profession, not a key role in a group.”
When their research began to merge with business school settings, they brought the term “leadership” with them, but the terms continued to be used to mean different things.
The short answer, according to Riggio is no, not really; simply because leaders and managers need the same skills to be productive and respected.
This editorial was first published here in June of 2014.
Does Raising Cane’s have the secret to combatting restaurant labor shortages?
(NEWS) Fried Chicken Franchise, Raising Cane’s, has turned to an unusual source of front-line employees during the labor shortage- Their executives!
I wouldn’t call myself a fried chicken aficionado or anything, but since chains are designed to blow up everywhere, I have experienced Raising Cane’s.
I’m pretty sure the Cane’s sauce is just barbecue mixed with ranch, but hey, when you’ve got a good idea, keep with it.
In the further pursuit of good ideas, the company has resorted to an intriguing method of boosting staff in a world where the lowest paid among us are still steadily dying of Covid, and/or choosing to peace out of jobs that they don’t find worth the infection risk.
Via Nation Restaurant News: “This is obviously a very tough time, so it was a joint idea of everybody volunteering together to go out there and be recruiters, fry cooks and cashiers —whatever it takes,” said AJ Kumaran, co-CEO and chief operating officer for the Baton Rouge, La.-based quick-service company, from a restaurant in Las Vegas, where he had deployed himself.”
The goal of this volunteer mission, which involves 250 of the 500 executives deployed working directly in service roles, is to bolster locations until 10,000 new hires can be made in both existing locations and locations planned to open.
It’s obvious that this is a bandaid move – execs exist for good reason, and in terms of sheer numbers (not to mention location and salary changes), this is hardly tenable long-term. But I can say this as someone who’s gone from retail to office, and back (and then forth…and then back again) several times – if this doesn’t keep everyone at the corporate level humble, and much more mindful of employees’ needs, nothing will.
The fast-food world is notorious for wonky schedules only going up a day before the week begins, broken promises on hours (both over and under), horrendous pay, and little to no defense of employee dignity in the face of customers with rank dispositions. With the wave of strikes (Nabisco, John Deere, IATSE) making the news, and lack of hazard pay/brutal physical attacks over mask mandates still very fresh in workers’ minds, smart companies are hipping themselves to the fact that “low level” employee acquisition and retention needs to be much more than the ‘work here or starve’ tactics that have served since the beginning of decades of wage stagnation. The best way for that fact to stay front-of-mind is to go out and live the truths behind it.
In Raising Cane’s case, the company also announced that they’re upping wages at all locations — to the tune of an actually not totally insulting $2 per hour, resulting in a starting wage of $15 and a managerial wage of $18.
Ideally, paying people more to cook, clean, and customer service all in one job will actually attract people back to fast food work. Seriously consider the fact that the people cleaning fast-food toilets are the same people making the food that goes into your mouth. The additional fact is that it’s better for everyone’s health when they’re paid enough to care about what they’re doing and stay healthy themselves.
Of course, one does also need to consider how much inflation has affected the price of goods and housing since the ‘fight for $15’ began almost a decade ago in 2012. Now, raising wages closer to the end point of multiple goods still might not be enough!
AJ Kumaran continued, “The chicken prices are through the roof. Logistics are very hard. Shipping is difficult. Simple things cups and paper napkins — everything is in shortage right now. Some are overseas suppliers and others domestic suppliers. Just in poultry alone, we have taken significant inflation.”
That’s global disruption for ya.
It remains to be seen whether this plucky move can save Raising Cane’s dark meat, but I’m very pro regardless. Send more top-earning employees into the trenches! No more executives with 0 knowledge of how the sausage sandwich gets made.
No more leading from behind.
Why not? What are ya? Chicken?
Unify your remote team with these important conversations
(BUSINESS NEWS) More than a happy hour, consider having these poignant conversations to bring your remote team together like never before.
Cultivating a team dynamic is difficult enough without everyone’s Zoom feed freezing halfway through “happy” hour. You may not be able to bond over margaritas these days, but there are a few conversations you can have to make your team feel more supported—and more comfortable with communicating.
According to Forbes, the first conversation to have pertains to individual productivity. Ask your employees, quite simply, what their productivity indicators are. Since you can’t rely on popping into the office to see who is working on a project and who is beating their Snake score, knowing how your employees quantify productivity is the next-best thing. This may lead to a conversation about what you want to see in return, which is always helpful for your employees to know.
Another thing to discuss with your employees regards communication. Determining which avenues of communication are appropriate, which ones should be reserved for emergencies, and which ones are completely off the table is key. For example, you might find that most employees are comfortable texting each other while you prefer Slack or email updates. Setting that boundary ahead of time and making it “office” policy will help prevent strain down the road.
Finally, checking in with your employees about their expectations is also important. If you can discuss the sticky issue of who deals with what, whose job responsibilities overlap, and what each person is predominantly responsible for, you’ll negate a lot of stress later. Knowing exactly which of your employees specialize in specific areas is good for you, and it’s good for the team as a whole.
With these 3 discussions out of the way, you can turn your focus to more nebulous concepts, the first of which pertains to hiring. Loop your employees in and ask them how they would hire new talent during this time; what aspects would they look for, and how would they discern between candidates without being able to meet in-person? It may seem like a trivial conversation, but having it will serve to unify further your team—so it’s worth your time.
The last crucial conversation, per Forbes, is simple: Ask your employees what they would prioritize if they became CEOs tomorrow. There’s a lot of latitude for goofy responses here, but you’ll hear some really valuable—and potentially gut-wrenching—feedback you wouldn’t usually receive. It never hurts to know what your staff prioritize as idealists.
Unifying your staff can be difficult, but if you start with these conversations, you’ll be well on your way to a strong team during these trying times.
This story was first published in November 2020.
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