WEBVTT - Surveillance Special: Saving America’s Growth Engine 0:00:01.440 --> 0:00:05.240 It's the American dream. Entrepreneurs across the country starting their 0:00:05.280 --> 0:00:08.840 own business. It's the biggest job creation vehicles the nation 0:00:08.880 --> 0:00:12.440 has ever seen. Small businesses are credited for two thirds 0:00:12.480 --> 0:00:15.720 of all US jobs over the past decade. These companies 0:00:15.800 --> 0:00:17.960 came into the year with a head full of steam. 0:00:18.239 --> 0:00:22.560 Then the coronavirus hit and the momentum just stopped. A 0:00:22.640 --> 0:00:26.000 full forty of small businesses do not think they're going 0:00:26.040 --> 0:00:28.640 to survive. They're just a lot of smaller businesses that 0:00:28.760 --> 0:00:30.600 will struggle to make it through this winter. It's all 0:00:30.640 --> 0:00:33.519 local small businesses, that's who is bearing the brunt of this. 0:00:33.720 --> 0:00:36.240 We just don't know how long we might be able 0:00:36.280 --> 0:00:39.000 to stay afloat. Everybody's going to be out of work, 0:00:39.040 --> 0:00:40.800 and I'm just going to be deeper in debt. It's 0:00:40.840 --> 0:00:44.879 been very, very bad for a family for you know, 0:00:44.920 --> 0:00:48.080 the government programs were designed to bail out the big boys, 0:00:48.159 --> 0:00:51.680 but they left Main Street on. Since the start of 0:00:51.720 --> 0:00:54.400 the pandemic, we spoke to more than a hundred business 0:00:54.400 --> 0:00:58.640 owners across the country. Many shut their doors, some survived, 0:00:59.040 --> 0:01:02.720 some adapted, and some suffered personal tragedies while trying to 0:01:02.800 --> 0:01:08.880 keep their business afloat. This is their story. Thanks for 0:01:08.959 --> 0:01:12.360 joining us on this Bloomberg Radio special report examining the 0:01:12.400 --> 0:01:17.400 pandemics outsized impact on small business Si bassk and I'm 0:01:17.480 --> 0:01:20.880 John Tucker. It's been nine months since lockdowns hit much 0:01:20.880 --> 0:01:23.880 of the country and doors have reopened at a number 0:01:23.920 --> 0:01:27.919 of storefronts, but still two out of every five small 0:01:27.959 --> 0:01:31.640 businesses tell Goldman Sachs they're not sure if they all survive, 0:01:31.880 --> 0:01:35.479 and ten million people remain unemployed. We spoke to business 0:01:35.520 --> 0:01:38.760 owners across the country about their troubles, and there have 0:01:38.840 --> 0:01:42.040 been many, but perhaps the worst of those struggles is 0:01:42.120 --> 0:01:46.120 the personal tragedies that were endured. David Carberry runs a 0:01:46.120 --> 0:01:50.320 digital marketing firm headquartered in Baltimore. When the pandemic hit, 0:01:50.520 --> 0:01:54.120 his sales were nearly cut in half, and then his 0:01:54.240 --> 0:01:57.160 father caught COVID while going to the hospital for a 0:01:57.280 --> 0:02:00.880 simple procedure. It was in April. My dad had just 0:02:01.040 --> 0:02:04.240 had surgery in March and we had to put him 0:02:04.240 --> 0:02:07.320 into a unit just for physical therapy. Um he had 0:02:07.320 --> 0:02:10.639 god about a replacement and with them we weren't allowed 0:02:10.639 --> 0:02:13.280 to see him, and the facility caught COVID and he 0:02:13.320 --> 0:02:16.560 did They They took him to the hospital and he 0:02:16.600 --> 0:02:19.480 was on Evan for a couple of weeks. Unfortunately lost 0:02:19.560 --> 0:02:21.959 him like in the beginning of May, so it was 0:02:21.960 --> 0:02:26.320 pretty traumatic for us. Then there's literally Pacheco's whose translation 0:02:26.400 --> 0:02:29.960 business also suffered from the onset of the pandemic shortly 0:02:30.000 --> 0:02:33.000 after her father fell ill and she couldn't be there. 0:02:33.600 --> 0:02:38.360 On April sixteen, My dad was really really sick. Um 0:02:38.520 --> 0:02:41.960 he can hardly briefe we Um called the ambulance. He 0:02:42.000 --> 0:02:43.960 didn't make it. He didn't make it. He already had 0:02:44.000 --> 0:02:47.360 passed on the couch. Um. So I witnessed all of 0:02:47.400 --> 0:02:49.960 this on the video. Normally I would have been there 0:02:50.000 --> 0:02:52.800 in person, right and you know, were stuck in quarantine, 0:02:52.840 --> 0:02:55.519 and all I was able to do was just watch 0:02:55.680 --> 0:02:59.600 from from the video. So it was really hard. And 0:02:59.720 --> 0:03:02.800 so many cities across the country, there are hundreds of 0:03:02.880 --> 0:03:06.880 stories just like David's and Lilies. In their cases, personal 0:03:06.880 --> 0:03:11.079 tragedy coincided with business trouble, but more often we've seen 0:03:11.080 --> 0:03:14.600 the business trouble turn into a different kind of tragedy, 0:03:14.720 --> 0:03:18.480 employers having to shut the doors, laying off friends and family. 0:03:18.840 --> 0:03:21.840 For John's Grill in San Francisco, this year was the 0:03:21.880 --> 0:03:26.000 worst in the restaurant's one twelve year history, open since 0:03:26.120 --> 0:03:29.520 nineteen o eight, owner John Constant is the latest in 0:03:29.600 --> 0:03:32.720 our long line of constants to run the business. We 0:03:32.760 --> 0:03:36.080 spoke to him back in March. This is my first 0:03:36.120 --> 0:03:41.280 experience with something that's catastrophic. It's been very very sad 0:03:41.320 --> 0:03:45.520 for our family, for our staff specifically, so I had 0:03:45.560 --> 0:03:49.880 to get the staff together and have that very very 0:03:49.880 --> 0:03:52.720 tough conversation with them because most of most of our 0:03:52.800 --> 0:03:56.480 staff has worked with us for five years, ten years, 0:03:56.600 --> 0:04:00.240 fifteen years, thirty years, so we have a long ten 0:04:00.320 --> 0:04:04.000 years staff. It was the saddest day of my professional career. 0:04:04.040 --> 0:04:07.320 I think we're all pretty much a family in there. 0:04:07.760 --> 0:04:10.400 Most of these guys have seen me grow up as 0:04:10.400 --> 0:04:13.200 a kid, you know, and so it was it was 0:04:13.240 --> 0:04:17.800 a really tough tough time. We've got our staff on 0:04:17.880 --> 0:04:21.360 medical insurance until the end of April, and we will 0:04:21.440 --> 0:04:24.159 probably be one of the first restaurants open our doors 0:04:24.160 --> 0:04:29.080 for patrons once COVID nineteen is over. John's Grill did 0:04:29.120 --> 0:04:32.839 reopen and added seating outdoors, but just this month it 0:04:32.920 --> 0:04:37.120 was forced to close again. And underrepresented communities have shown 0:04:37.120 --> 0:04:39.800 to be some of the hardest hit in this pandemic, 0:04:40.279 --> 0:04:43.320 so our businesses that are black owned and women owned. 0:04:43.520 --> 0:04:46.640 The Bank Street Bookstore in Manhattan was founded and run 0:04:46.640 --> 0:04:49.839 by women, and after forty years, one of the last 0:04:49.839 --> 0:04:53.720 sellers of children's books in New York City is closing. 0:04:54.120 --> 0:04:56.960 I mean, we've been a corner stone of the neighborhood 0:04:57.320 --> 0:04:59.680 since we've been here for a most fifty years. We 0:04:59.800 --> 0:05:03.360 have folks coming in who remember coming when they were 0:05:03.400 --> 0:05:06.400 a kid and now are bringing their children, or people 0:05:06.400 --> 0:05:09.719 who live in the neighborhood who just had kids and 0:05:09.960 --> 0:05:13.360 are really sad that they won't be able to have 0:05:13.480 --> 0:05:18.280 their children grow up here. At the start of the pandemic, 0:05:18.320 --> 0:05:21.279 there was a big government push to rescue small business 0:05:21.320 --> 0:05:25.080 from financial ruin. Billions of dollars were made available through 0:05:25.120 --> 0:05:28.920 the Paycheck Protection Program, but firms that borrowed largely ran 0:05:28.960 --> 0:05:32.000 out of money by October. Margaret and Nadu works at 0:05:32.040 --> 0:05:36.159 Goldman Sachs. Her job is investing in underserved communities. She 0:05:36.320 --> 0:05:39.240 says more than forty percent of business owners had to 0:05:39.320 --> 0:05:43.400 layoff staff or cut jobs by November, and many said 0:05:43.400 --> 0:05:45.520 they wouldn't make it through the year. And it goes 0:05:45.560 --> 0:05:48.680 beyond the business owners. There's also fifty two percent of 0:05:48.680 --> 0:05:51.839 these small businesses that have foregone pay themselves, right, And 0:05:51.880 --> 0:05:54.839 it's not it's not like we can isolate small businesses 0:05:54.880 --> 0:05:57.919 like there's some aspect of the economy that's off to 0:05:57.960 --> 0:06:00.560 the side. When you have small business owners who aren't 0:06:00.600 --> 0:06:03.839 paying themselves, that struggled with your mortgage, that's a struggle 0:06:03.880 --> 0:06:05.800 with your rent, that's a struggle with how you pay 0:06:05.839 --> 0:06:08.599 for your health care, and so that impact on the economy. 0:06:08.720 --> 0:06:11.039 It's not a it's not a future issue. That's where 0:06:11.080 --> 0:06:13.839 we are now. And the real concern here is if 0:06:13.880 --> 0:06:19.200 that impact becomes permanent. Scott Minored at Googenheim Investments thinks 0:06:19.400 --> 0:06:22.120 it will be the p p P, which was a 0:06:22.200 --> 0:06:26.200 great program as an emergency stock gap. You know, of 0:06:26.240 --> 0:06:29.800 course it's gone, so you know we're going to start 0:06:29.839 --> 0:06:33.880 seeing layoffs here. And structurally, more than half of the 0:06:34.320 --> 0:06:38.480 Americans are employed by small to medium sized business um. 0:06:38.520 --> 0:06:41.280 A lot of those businesses are never coming back. Some 0:06:41.360 --> 0:06:44.080 won't make it out of the pandemic, but many will 0:06:44.440 --> 0:06:46.760 thanks to quick aid from the government. Back in March, 0:06:47.240 --> 0:06:50.880 the Paycheck Protection Program gave more than five billion companies 0:06:50.920 --> 0:06:54.480 a lifeline in the form of half a trillion dollars. 0:06:54.920 --> 0:06:58.719 In that cash helped Aaron Anchor's granola company in northern 0:06:58.760 --> 0:07:01.840 Maine get back on its feet after the early days 0:07:01.880 --> 0:07:04.200 of the pandemic. You know, you had to work with 0:07:04.240 --> 0:07:06.159 your local bank on that or your bank, you know, 0:07:06.320 --> 0:07:09.320 whatever bank used, and our local bank was phenomenal, so 0:07:09.360 --> 0:07:10.960 we just decided to go with what we knew. We 0:07:11.040 --> 0:07:14.560 furloughed about sixteen people and as of now, we've brought 0:07:14.560 --> 0:07:17.200 almost all of them back. Anybody that we could we've 0:07:17.240 --> 0:07:19.840 brought back. So it was very exciting and the PPP 0:07:20.000 --> 0:07:23.400 was very helpful that At the same time, small business 0:07:23.400 --> 0:07:27.800 owners say, p p P was also plagued by several hurdles. 0:07:27.840 --> 0:07:30.760 Some smaller firms found it difficult to even get a loan. 0:07:31.440 --> 0:07:34.320 We spoke with Brad Close, the president of the National 0:07:34.360 --> 0:07:37.840 Federation of Independent Business. You know, we saw a very, 0:07:38.000 --> 0:07:41.520 very poor rollout back in April um. The big banks 0:07:41.600 --> 0:07:45.760 mostly sent those loans to longtime customers, much larger businesses 0:07:45.760 --> 0:07:48.920 than a typical small business. You know, our average members 0:07:48.960 --> 0:07:51.920 five to ten employees. That's very common for small businesses. 0:07:52.000 --> 0:07:54.720 We are talking true small businesses, the one you find 0:07:54.720 --> 0:07:57.800 in communities all across America. They struggled to get the 0:07:57.840 --> 0:08:01.360 banks to pay attention to them. That frustration was rampant. 0:08:01.360 --> 0:08:04.080 In the early days of the program. Jim Smith applied 0:08:04.080 --> 0:08:06.600 for a p p P loan to help his advertising 0:08:06.640 --> 0:08:10.280 company in Irvington, New York. We did apply, and I 0:08:10.320 --> 0:08:14.840 think it's been well documented how frustrating and difficult that 0:08:15.000 --> 0:08:17.400 experience has been. You know, the bank that we were 0:08:17.480 --> 0:08:21.880 using was really prioritizing their private clients and basically telling 0:08:21.920 --> 0:08:25.680 their relationship managers not to help to facilitate the loan 0:08:25.800 --> 0:08:29.880 process for their smaller clients that don't have a minimum 0:08:29.880 --> 0:08:34.240 of ten million dollars in active business. So we'll see 0:08:34.240 --> 0:08:36.920 what happens. I know, everyone I know is really anxious 0:08:36.920 --> 0:08:39.360 about what's going to happen now with the next round. 0:08:39.800 --> 0:08:44.000 But let's just say that nobody really has any confidence 0:08:44.600 --> 0:08:47.040 when it comes to p p P loans. More than 0:08:47.120 --> 0:08:49.920 twenty five per cent of the money went to just 0:08:50.200 --> 0:08:54.320 one percent of the borrowers. Those are mostly large firms 0:08:54.559 --> 0:08:57.800 seeking loans north of a million dollars. Lots of people 0:08:57.880 --> 0:09:00.720 we spoke to had a tough time accessing the program. 0:09:00.880 --> 0:09:04.839 Small business owners like Frank Knapp described a wide range 0:09:04.840 --> 0:09:08.160 of hurdles. Franco owns a firm in South Carolina and 0:09:08.240 --> 0:09:10.800 also heads up the Chamber of Commerce in the City 0:09:10.840 --> 0:09:13.520 of Columbia. So there's no doubt about it that that 0:09:13.640 --> 0:09:17.240 P p P loans were important. But you know, only 0:09:17.400 --> 0:09:22.079 six all the small businesses in this country received a 0:09:22.160 --> 0:09:26.720 p p P loan out of the thirty million small businesses. Uh, 0:09:27.120 --> 0:09:29.719 it's a poultry amount. The people who were left out, 0:09:29.760 --> 0:09:33.200 the small business owners who were left out were sole proprietors, uh, 0:09:33.280 --> 0:09:36.439 they were micro businesses and a lot of those public 0:09:36.480 --> 0:09:40.240 the majority were people of color and women. They just 0:09:40.240 --> 0:09:43.800 didn't have the banking relationships to get a loan approved, 0:09:44.040 --> 0:09:47.240 or they didn't have the resources to go ahead and 0:09:47.280 --> 0:09:50.200 fill out the application appropriately, or maybe didn't even have 0:09:50.360 --> 0:09:52.679 the forms from the I R S to do it. 0:09:52.960 --> 0:09:57.079 So we've got major issues here. It's true that black 0:09:57.120 --> 0:10:01.199 owned firms have been disproportionately hit, and so have Latino 0:10:01.280 --> 0:10:06.120 owned firms. Westmore, CEO of the Robin Hood Foundation, has 0:10:06.120 --> 0:10:10.040 been working with corporations and donors to support those businesses. 0:10:10.440 --> 0:10:13.440 It is a massive problem, and frankly, it was something 0:10:13.440 --> 0:10:15.960 that we have been calling out for a while. Uh. 0:10:16.000 --> 0:10:19.120 And we even saw it when when the proposed Cares Act, 0:10:19.120 --> 0:10:22.319 the initial Cares Act was being pulled together because people 0:10:22.320 --> 0:10:24.920 will say, well, there was a cash assistance element to 0:10:24.920 --> 0:10:28.480 the Cares Act. That's true. However, the cash assistant elements 0:10:28.520 --> 0:10:31.120 of the Cares Act left out millions of people, and 0:10:31.160 --> 0:10:34.480 it left them out intention So, for example, if you 0:10:34.520 --> 0:10:37.440 were undocumented, there was no cash assistance element to the 0:10:37.440 --> 0:10:39.080 Cares Act for you. If you were part of a 0:10:39.120 --> 0:10:41.920 mixed status household, there was no cash assistance for you. 0:10:41.960 --> 0:10:44.120 If you were a student, even if you were working, 0:10:44.120 --> 0:10:47.680 there was no cash assistance element. If you were working 0:10:48.000 --> 0:10:50.360 but not making enough money to hit the income tax 0:10:50.360 --> 0:10:54.000 filing threshold, there was no cash assistance left for you, 0:10:54.480 --> 0:10:57.840 and even those that did receive assistance ran into issues. 0:10:58.160 --> 0:11:01.959 Bloomberg reporters Sally Bakewell spoke to dozens of business owners 0:11:02.000 --> 0:11:05.880 describing red tape that was both timely and costly. The 0:11:05.920 --> 0:11:10.000 business landscape in America is littered with stories like these. 0:11:10.360 --> 0:11:13.199 I spoke to the owner of a Vinyl records store 0:11:13.360 --> 0:11:16.520 in Columbia, South Carolina, and he had got a twenty 0:11:16.559 --> 0:11:19.400 seven thousand p p P loan, but he still had 0:11:19.440 --> 0:11:23.400 to dock his own salary to keep going. Um Or 0:11:23.520 --> 0:11:26.560 there was the owner of a all female boxing gym 0:11:26.720 --> 0:11:30.400 in North Attleborough, Massachusetts. She had her PP application handed 0:11:30.440 --> 0:11:32.840 straight back to her on the same day that she 0:11:32.920 --> 0:11:35.120 applied by the bank because they thought there was too 0:11:35.200 --> 0:11:37.920 much red tape UM and so she had to use 0:11:37.920 --> 0:11:41.720 her stimulus check to keep her business going. Um I 0:11:41.800 --> 0:11:44.719 then spoke to a business owner in Colorado and she 0:11:44.840 --> 0:11:49.120 was setting up a sustainable goods business UM and because 0:11:49.160 --> 0:11:52.920 of COVID, she lost her one contract because it was 0:11:52.920 --> 0:11:55.000 with a school who wanted to buy some of her 0:11:55.000 --> 0:12:00.320 sustainable trades for their cafeterias cafeterias, so she led for 0:12:00.400 --> 0:12:03.520 P p P and she applied for another type of 0:12:03.559 --> 0:12:09.480 emergency assistance loan. She had both of her applications rejected UM. 0:12:09.520 --> 0:12:11.760 She told me that one of them at one point 0:12:11.760 --> 0:12:14.760 they told her they had lost her application UM and 0:12:14.840 --> 0:12:17.920 that she needed to submit her financial details again and 0:12:17.960 --> 0:12:20.160 then when she went through all of that, there was 0:12:20.200 --> 0:12:23.760 no money left anyway. She was told there are stories 0:12:23.800 --> 0:12:26.200 like that everywhere. You know. They did, they did the 0:12:26.240 --> 0:12:27.880 right thing, They did what they could, they couldn't get 0:12:27.880 --> 0:12:29.840 the money, or they got the money, they still couldn't 0:12:29.840 --> 0:12:32.880 catch a break. Bank Street Bookstore in New York City 0:12:33.000 --> 0:12:36.000 was one of the many small businesses unable to access 0:12:36.080 --> 0:12:39.840 government aid. Caitlin Morrissey owns the fifty year old bookstore, 0:12:39.920 --> 0:12:42.800 which started out in the lobby of Bank Street College. 0:12:43.080 --> 0:12:46.440 Since we are attached to an educational institution, some of 0:12:46.559 --> 0:12:49.120 the relief that would have been available if we were 0:12:49.120 --> 0:12:54.400 a stand alone small business, unfortunately, it just wasn't available 0:12:54.600 --> 0:12:59.440 to us. So while we've operated fairly independently, we are 0:12:59.640 --> 0:13:03.720 under umbrella, so it affected what kinds of aid we 0:13:03.720 --> 0:13:07.960 were applicable to that The troubles spanned the country and industries. 0:13:08.200 --> 0:13:12.320 Alex Cuton ran a travel agency in Indiana and described 0:13:12.440 --> 0:13:17.200 similar roadblocks accompanied by a few answers. As a small 0:13:17.280 --> 0:13:20.319 business owner. You know, we're the last to get paid club. 0:13:20.520 --> 0:13:23.199 You know, we pay our rent, we pay our employees, 0:13:23.320 --> 0:13:25.960 we pay you know, everything that we owe and then 0:13:26.000 --> 0:13:28.960 if there's anything left at the end of the year, 0:13:29.120 --> 0:13:31.720 we get paid. And this year I don't look to 0:13:31.760 --> 0:13:36.280 be making any money. Now, have you applied for aid? Yes, 0:13:36.480 --> 0:13:40.080 during the time that the Cares Act ten thousand dollars. 0:13:40.080 --> 0:13:43.080 You know that we were led to believe that we 0:13:43.120 --> 0:13:47.320 would receive we applied for that immediately. Did I get it? No? 0:13:47.960 --> 0:13:51.280 And then the p P. P Whenever that program was 0:13:51.320 --> 0:13:55.240 announced and it came out, I applied immediately for that 0:13:55.520 --> 0:13:58.960 and did I get it? No restrictions tied to COVID 0:13:59.080 --> 0:14:03.160 nineteen have a small businesses across the country. Those that 0:14:03.240 --> 0:14:06.840 managed to stay afloat survived by tapping into government aid 0:14:07.240 --> 0:14:10.880 or by pivoting finding creative ways to survive or even 0:14:10.920 --> 0:14:14.160 thrive in the face of the pandemic. John Pepper is 0:14:14.200 --> 0:14:16.960 one of those small business owners. He runs a chain 0:14:17.040 --> 0:14:20.760 of eight modern Mexican restaurants in the Boston area, which 0:14:20.760 --> 0:14:24.640 he transformed to adapt to the outbreak. The Financial district 0:14:24.720 --> 0:14:27.520 of Boston became a ghost town almost immediately. We closed 0:14:27.520 --> 0:14:31.280 those four restaurants on the eighteenth of March. A week later, 0:14:31.320 --> 0:14:34.040 I put out a video essentially two days before I 0:14:34.080 --> 0:14:36.240 thought we had to close. The rest of everything staying. 0:14:36.280 --> 0:14:38.880 Instead of letting everybody know we had closed, I felt 0:14:38.920 --> 0:14:41.400 maybe I should let people know most likely we're going 0:14:41.440 --> 0:14:44.240 to close, because I didn't see any avenue to stay open. 0:14:44.480 --> 0:14:48.320 Turned out that that video caused a outcry of support. 0:14:48.360 --> 0:14:52.080 We raised over sixty dollars. We basically pimoted into a 0:14:52.120 --> 0:14:55.360 nonprofit model. For the last four weeks, we created this 0:14:55.440 --> 0:14:58.000 feed the front line, which now very ubiquitous term. But 0:14:58.080 --> 0:15:01.360 we ended up just keep the restaurants open to feed 0:15:01.480 --> 0:15:04.920 hospital workers throughout Boston and throughout New England. That's how 0:15:04.920 --> 0:15:08.720 we kept it going. Kim Strassner's business in Baltimore also 0:15:08.840 --> 0:15:13.040 disappeared overnight. She made personalized cutting boards that were popular 0:15:13.120 --> 0:15:17.800 as party favors. No parties meant no business. So what 0:15:17.880 --> 0:15:21.360 we did is we pivoted. We've joined up with two 0:15:21.400 --> 0:15:26.160 other local Baltimore companies and master seamstress Jill Andrews and 0:15:26.320 --> 0:15:31.280 Dan Jansen with Imperium Shaving, and we are making cotton masks, 0:15:31.400 --> 0:15:35.480 so we're using our laser engraver to cut the fabric. 0:15:36.360 --> 0:15:41.560 Jilly Andrews, she designed the pattern and that business is 0:15:41.600 --> 0:15:44.080 doing really well as you can expect. What is the 0:15:44.120 --> 0:15:47.360 difference in revenue from the traditional business to what you've 0:15:47.360 --> 0:15:50.720 pivoted to now, is that enough to sustain the business? 0:15:51.200 --> 0:15:54.080 You know, my husband locked his job, so we're you know, 0:15:54.240 --> 0:15:57.680 definitely as a household are income you know is down, 0:15:57.960 --> 0:16:01.000 and you know we're trying to pay our employees at 0:16:01.000 --> 0:16:03.480 fair price and sell the masks for a fair price. 0:16:03.680 --> 0:16:05.560 We're not gonna get rich off of this. You know, 0:16:05.960 --> 0:16:08.920 it's just we saw it need. It's not something you know, 0:16:09.000 --> 0:16:11.480 we're going to get rich off of. Kimi Strassner and 0:16:11.600 --> 0:16:15.400 John Pepper adapted to survive, but other entrepreneurs we spoke 0:16:15.440 --> 0:16:19.160 to made more dramatic changes that sometimes saw a business 0:16:19.200 --> 0:16:23.000 more than double. Alex Carroll ran a tailgate events business 0:16:23.080 --> 0:16:26.520 which ground to a halt when the NBA canceled its season, 0:16:27.080 --> 0:16:30.440 so he got creative. It was a sad moment. I mean, 0:16:30.680 --> 0:16:33.280 I won't lie. We spent a day kind of just 0:16:33.480 --> 0:16:37.240 laying around feeling sorry for ourselves, and then we quickly realized, hey, 0:16:37.280 --> 0:16:40.680 what can we do to get our employees back because 0:16:40.680 --> 0:16:43.200 we had to furlough all of them. And so that's 0:16:43.240 --> 0:16:45.880 when we started to think, when events do come back, 0:16:46.280 --> 0:16:48.120 what are they going to need. We knew they were 0:16:48.120 --> 0:16:50.920 going to need hand sanitizer stations, and that's when we 0:16:50.920 --> 0:16:53.480 started brainstorming and trying to come up with, you know, 0:16:53.560 --> 0:16:59.120 fully customized hand sanitizer stations. It's been incredible to see 0:16:59.240 --> 0:17:03.160 all the do for small businesses all over the country 0:17:03.240 --> 0:17:05.840 that will go on the website by you know, an 0:17:05.880 --> 0:17:09.800 automatic hand sanitizer dispenser package. They'll buy different types of 0:17:09.800 --> 0:17:12.680 sanitizer that we offer, they'll lie different types of stands 0:17:13.080 --> 0:17:16.000 and they'll all customize it with their logo and with 0:17:16.080 --> 0:17:19.680 that pivot business for Alex more than double business ideas 0:17:19.720 --> 0:17:22.879 tied directly to the pandemics seemed like an obvious shift, 0:17:23.480 --> 0:17:27.880 but some other less conventional ventures also saw big boosts 0:17:28.000 --> 0:17:31.920 during the outbreak. Paul Salek, for example, owns a flying 0:17:31.920 --> 0:17:35.440 school in Las Vegas. Amazingly enough, we've been busier than 0:17:35.480 --> 0:17:39.359 we've ever been. Um. I think people that can afford 0:17:39.640 --> 0:17:43.320 private aircraft travel have now given themselves permission to get 0:17:43.359 --> 0:17:45.639 the license that they always wanted to get so that 0:17:45.720 --> 0:17:49.240 they can take their family and their associates on personal 0:17:49.280 --> 0:17:52.680 travel around business travel as opposed to go into the airlines. 0:17:52.880 --> 0:17:56.720 So we've we've actually seen quite the uptick in aircraft 0:17:56.800 --> 0:17:59.240 sales and people learning how to fly. It sounds like 0:17:59.240 --> 0:18:02.119 people want to avoid commercial travel altogether and just do 0:18:02.200 --> 0:18:05.440 it themselves, and it's they think it's safe in that way. Yeah, 0:18:05.520 --> 0:18:07.240 instead of going through T s A and jumping in 0:18:07.240 --> 0:18:09.800 an airplane with the hundred fifty people you don't know, 0:18:10.200 --> 0:18:12.960 you get in an airplane with just those loved ones 0:18:13.040 --> 0:18:16.280 or those associates, and you can go, you know, pointing 0:18:16.280 --> 0:18:18.000 at a point B direct to your meeting and be 0:18:18.080 --> 0:18:21.159 home the same day. And it's always been available, but 0:18:21.240 --> 0:18:23.760 the cost of doing so has always been higher than 0:18:23.800 --> 0:18:27.120 the airline. But now people you know, for their own 0:18:27.200 --> 0:18:30.040 personal safety and those of their loved ones, um, I 0:18:30.040 --> 0:18:33.400 think they're giving themselves the okay to go ahead with it. Well, 0:18:33.480 --> 0:18:36.800 some pivots maybe permitted. Others are business owners just doing 0:18:36.840 --> 0:18:39.520 what they can to get through the crisis. Clayton B. 0:18:39.600 --> 0:18:43.440 Sean runs Kntina Lobos and Pellham, New York. His restaurant, 0:18:43.560 --> 0:18:46.080 like many others, had a pivot to a delivery model. 0:18:46.480 --> 0:18:49.440 It kept his business of flaw, but it's not sustainable. 0:18:49.680 --> 0:18:53.480 It's basically just to stop the bleeding of cash. The 0:18:53.520 --> 0:18:57.200 perfect storm was that state taxes were do last Friday, 0:18:57.400 --> 0:18:59.359 and we had to make the decision of you know, 0:18:59.800 --> 0:19:01.520 do we hold on to that cash and take the 0:19:01.600 --> 0:19:04.760 fines um later on so that we could stay open, 0:19:05.119 --> 0:19:07.200 or do we give them all that cash and only 0:19:07.240 --> 0:19:10.520 have a week's left instead of two weeks left of 0:19:10.560 --> 0:19:12.520 what we did? And we decided to take the fine 0:19:12.560 --> 0:19:14.200 and hold on to that to try to stay alive 0:19:14.240 --> 0:19:17.680 and pay that sales tax later. Luckily the states come 0:19:17.680 --> 0:19:20.080 down and as of now you're not gonna get fined 0:19:20.200 --> 0:19:23.440 for not paying sales tax. I bought us basically another 0:19:23.480 --> 0:19:26.240 week we can have. The hurdles are high for firms 0:19:26.240 --> 0:19:29.840 that old background back taxes at loans from the government 0:19:29.880 --> 0:19:33.320 that we're meant to keep them afloat. Government moratoriums on 0:19:33.400 --> 0:19:37.760 evictions and foreclosures are expiring in many states. The list 0:19:37.800 --> 0:19:41.159 of worries is long, and many storefronts now face fresh 0:19:41.240 --> 0:19:45.760 lockdowns until vaccines are widely distributed. John Pepper in Boston 0:19:45.920 --> 0:19:49.520 made the best of a bad situation, using his modern 0:19:49.600 --> 0:19:53.879 Mexican restaurants to feed frontline workers. He took hundreds of 0:19:53.920 --> 0:19:56.560 thousands of dollars and p p P loans, but the 0:19:56.640 --> 0:20:00.440 road ahead for his business is still uncertain. You kept 0:20:00.480 --> 0:20:03.240 people employed, we help them figure out how to apply 0:20:03.320 --> 0:20:05.760 for unemployment, and we ensured as soon as we knew 0:20:05.760 --> 0:20:08.399 we had the p PP nobody will be left behind. 0:20:08.800 --> 0:20:11.120 You are grateful that you did get a loan through 0:20:11.160 --> 0:20:15.080 the Small Business Administration, but it comes with some stipulations 0:20:15.119 --> 0:20:18.760 that really make you think about the future of the business. Yeah, 0:20:18.800 --> 0:20:22.400 that's for sure. How much of this sixty in our case, 0:20:22.440 --> 0:20:24.560 which is a lot of money that just sounds like 0:20:24.600 --> 0:20:27.080 a windfall at first at a glance, But how much 0:20:27.080 --> 0:20:29.440 of that will turn into a loan? And will we 0:20:30.000 --> 0:20:33.440 be able to generate the cash flow necessary to pay 0:20:33.440 --> 0:20:36.040 it back in a short eighteen month period once we 0:20:36.080 --> 0:20:39.040 have to start paying it And that by definition, if 0:20:39.040 --> 0:20:41.520 you do the math is going to be almost impossible 0:20:41.560 --> 0:20:45.560 for most restaurant companies if they don't go for full forgiveness, 0:20:46.200 --> 0:20:48.320 the amount left over as a loan will be a 0:20:48.480 --> 0:20:52.200 very challenging number to meet from a cash flow standpoint 0:20:52.280 --> 0:20:55.360 over the following a team months. The long term damage 0:20:55.400 --> 0:20:59.520 to small business has led to frustration aimed at Capitol Hill, 0:21:00.080 --> 0:21:04.000 as lawmakers took many months to negotiate additional aid. More 0:21:04.080 --> 0:21:08.879 than nineteen million Americans filed for unemployment. Meantime, the stock 0:21:08.920 --> 0:21:12.479 market rallied to records and the largest banks posted record 0:21:12.600 --> 0:21:16.800 results at some key businesses. Frank Knapp, a small business 0:21:16.800 --> 0:21:21.320 owner in South Carolina, is frustrated with the response from Washington. 0:21:21.640 --> 0:21:25.000 They all know, they all know that small businesses needed 0:21:25.080 --> 0:21:28.119 to be helped so that they can survive, because like 0:21:28.200 --> 0:21:31.760 after the Great Recession, it was small businesses who created 0:21:31.880 --> 0:21:34.880 the majority of jobs to get the economy back on track, 0:21:35.000 --> 0:21:38.000 not big business. But yet all we're concerned about is 0:21:38.160 --> 0:21:41.679 Wall Street. Uh, we all be concerned about Main Street, 0:21:42.280 --> 0:21:46.720 and ironically enough, Wall Street agrees Scott and minor manages 0:21:46.760 --> 0:21:50.440 more than two hundred billion dollars for Guggenheim investments. What 0:21:50.560 --> 0:21:54.000 the policymakers are doing here is leaving themselves open to 0:21:55.160 --> 0:21:57.639 another round of criticism, just like they got at the 0:21:57.720 --> 0:22:01.320 end of the financial crisis, which is the government programs 0:22:01.359 --> 0:22:03.720 were designed to bail out the big boys, but they 0:22:03.800 --> 0:22:08.720 left Main Street behind. We have permanently done damage to 0:22:09.000 --> 0:22:13.439 the job market which some other industry or future growth 0:22:13.520 --> 0:22:15.359 is going to have to correct for, and that's going 0:22:15.400 --> 0:22:18.520 to take a long time. Key figures in Washington also 0:22:18.560 --> 0:22:22.240 agree with Federal Reserve Chairman j Pale acknowledging the issue, 0:22:22.640 --> 0:22:25.560 and he sees more trouble ahead. They're just a lot 0:22:25.560 --> 0:22:29.000 of smaller businesses in their communities that will struggle to 0:22:29.040 --> 0:22:32.119 make it through this winter. COVID is moving up um 0:22:32.240 --> 0:22:34.840 and the cold weather people are staying in and it's 0:22:34.880 --> 0:22:39.280 gonna be tough. There are also frustrations aimed at large corporations, 0:22:39.720 --> 0:22:43.560 especially tech companies like Amazon and Google, which have benefited 0:22:43.560 --> 0:22:47.240 from the shift to online commerce. A report from Visa 0:22:47.400 --> 0:22:50.880