Friday, January 21News That Matters

Tag: Small Business

How a Relief Fund for Restaurants Picked Winners and Losers

How a Relief Fund for Restaurants Picked Winners and Losers

Business
When Congress created a grant program early this year to help battered bars and restaurants survive the pandemic, one thing was immediately clear: The money would not be enough. The Restaurant Revitalization Fund contained $28.6 billion, far below the $100 billion that industry groups estimated was needed.That made the rules about priority treatment — which were upended midstream by lawsuits from white male business owners who called them unfair — a crucial factor in determining who received relief.But Small Business Administration records obtained by The New York Times reveal a capricious methodology for determining winners and losers. In the most extreme cases, applicants whom lawmakers intended to favor — women and business owners from certain racial and cultural groups — ended up effec...

Supply Chain Problems Have Small Retailers Gambling on Hoarding

Business
Megan Searfoss has been hoarding sneakers in Connecticut.Ms. Searfoss, the owner of two running stores in Darien and Ridgefield, Conn., would normally have about 3,000 pairs of shoes in stock ahead of the holiday season. But as she watched supply chain concerns in Vietnam mount this summer and into the fall, she secured a new storage facility and is now carrying around 4,100 pairs.It’s a costly gamble for Ms. Searfoss, who said she was extended about $165,000 more than she would typically be in November because of worries about potential shortages.“It’s placing a big bet and anticipating that what all the analysts are saying is correct,” Ms. Searfoss said. “Usually, we get through the New York City Marathon and then we stop buying shoes — we sell off what we have and go into January super,...
Supply-Chain Kinks Force Small Manufacturers to Scramble

Supply-Chain Kinks Force Small Manufacturers to Scramble

Business
“We are not going to assemble iPhones in the U.S.,” Mr. Shih said.Some experts believe the problems will persist. “Our findings indicate the disruption could be for up to three years,” said Manish Sharma, group chief executive of operations services at the consulting firm Accenture.Even Two-One-Two New York, a strictly domestic manufacturer of apparel with a plant on Long Island, is being forced to do things differently, said Marisa Fumei-South, the company’s owner and president.The company has accumulated larger stocks of yarn and other raw materials in response to rising prices and higher shipping costs. “We’re sitting with a lot of inventory,” Ms. Fumei-South said. “We’re waiting to see how this evolves.”That kind of behavior feeds on itself, Mr. Shih said. As companies buy up supplies ...

Imagine Not Living in Big Tech’s World

Technology
This article is part of the On Tech newsletter. Here is a collection of past columns.I want to flash back to the rise and fall of a once popular storytelling website called Upworthy. It is one of a zillion examples of the power of Facebook and other technology superstars to make or break other companies’ dreams.I recently spoke to one of Upworthy’s co-founders, Eli Pariser, about the company’s history. It’s relevant because nearly a decade after it started, we are still grappling with the risks and rewards of a handful of technology companies serving as gateways to success online.Pariser is now part of a project that has compelling but difficult-to-imagine ideas to get out of this trap.Upworthy’s tale isn’t new or particularly unusual, and that’s the point. Just about everyone trying to ma...
Starting a Business With Your 401(k)? Be Careful.

Starting a Business With Your 401(k)? Be Careful.

Business
This is a path that many experts recommend against. “The first thing we tell people is absolutely not to tap into their retirement account,” said Elizabeth Isele, the founder and chief executive of the Global Institute for Experienced Entrepreneurship. Though Ms. Edwards is younger than the entrepreneurs over age 50 the institute is devoted to, Ms. Isele is wary of any risk to a secure retirement.Updated Nov. 12, 2021, 1:19 p.m. ET“One of the sad statistics out there is that so few people have any retirement savings,” she said. According to the New School’s Retirement Equity Lab, 36 percent of 35- to 54-year-old Americans have no retirement savings. At the time of her launch, Ms. Edwards fell into the category of the 43 percent who had less than $10,000 saved. “They’re vulnerable,” Ms...
Racial Bias Skewed Small-Business Relief Lending, Study Says

Racial Bias Skewed Small-Business Relief Lending, Study Says

Business
But Sergey Chernenko, an associate professor of finance at Purdue University’s Krannert School of Management, who was not involved in Dr. Howell’s research, said the new paper aligned with his own findings on race-based gaps in Paycheck Protection Program lending. At an economic conference next month, he will present a paper that concluded that Black-owned businesses were disproportionately left out of the relief program.“This fits very well with and complements our finding that minority-owned businesses were less likely to get loans because of racial bias, and to the extent that they do get them, they’re more likely to get them from fintechs than banks,” Dr. Chernenko said.Updated Oct. 11, 2021, 6:41 p.m. ETThe government designed the Paycheck Protection Program to be virtually risk-...
100 Isn’t a Magic Number, So Why Is It Part of the Vaccine Mandate?

100 Isn’t a Magic Number, So Why Is It Part of the Vaccine Mandate?

Business
But if you want a small-business loan? There, the government’s definition is far more expansive. The Small Business Administration, which orchestrated the popular Paycheck Protection Program, generally considers any company with fewer than 500 employees a “small” one. Unless you’re in one of dozens of industries with exceptions, which are detailed in a 49-page document that can seem almost whimsical in its divisions. A company that mines gold ore counts as small if it has up to 1,500 employees, but the limit falls to 750 for iron miners and just 250 for those that extract silver.Business & EconomyUpdated Sept. 17, 2021, 4:06 p.m. ETOne thing about tiny companies is clear: They vastly outnumber their bigger brethren. The government estimates that there are nearly 32 million small b...
The Battle for Digital Privacy Is Reshaping the Internet

The Battle for Digital Privacy Is Reshaping the Internet

Technology
“The internet is answering a question that it’s been wrestling with for decades, which is: How is the internet going to pay for itself?” he said.The fallout may hurt brands that relied on targeted ads to get people to buy their goods. It may also initially hurt tech giants like Facebook — but not for long. Instead, businesses that can no longer track people but still need to advertise are likely to spend more with the largest tech platforms, which still have the most data on consumers.David Cohen, chief executive of the Interactive Advertising Bureau, a trade group, said the changes would continue to “drive money and attention to Google, Facebook, Twitter.”The shifts are complicated by Google’s and Apple’s opposing views on how much ad tracking should be dialed back. Apple wants its custom...
Climate Change Is Bankrupting America’s Small Towns

Climate Change Is Bankrupting America’s Small Towns

Technology, World
FAIR BLUFF, N.C. — It’s been almost five years since Hurricane Matthew flooded this small town on the coastal plain of North Carolina. But somehow, the damage keeps getting worse.The storm submerged Main Street in four feet of water, destroyed the town hall, the police and fire departments, and flooded almost a quarter of its homes. After two weeks underwater, the roads buckled. The school and grocery store shut, then didn’t reopen. When Hurricane Florence submerged the same ground two years later, in 2018, there was little left to destroy.What started as a physical crisis has become an existential one. The town’s only factory, which made vinyl products, closed a few months after Matthew. The population of around 1,000 fell by about half. The federal government tried to help, buying the ho...
How 3 Small Businesses Create Culture in a Remote-Work World

How 3 Small Businesses Create Culture in a Remote-Work World

Business
“We were doing really crazy things,” Mr. Bry said. “We discovered that a lot of employees have home lab setups and are working on this stuff on the side as a hobby.”He gave employees a lot of autonomy to try new ideas and saw his role as ensuring they had everything they needed to perform well. And he was rewarded: During the pandemic, Skydio more than doubled its staff, to nearly 300 employees, and reached a $1 billion valuation after raising $170 million in funding led by the venture capital firm Andreessen Horowitz.Still, Mr. Bry wanted to find ways to keep the team connected. In the early days of the pandemic, that meant trying to have some fun. He rented out a drive-in theater near their Redwood City, Calif., office and showed the 2013 sci-fi movie “Gravity.”“We love things that fly, ...