Dashboard: A Gusher of Money

[Music] welcome to another 21 hats dashboard I'm Lauren Feldon as usual I'm here with Jean Marx who has his finger on the small business pulse more than anyone I know uh we're going to talk about the stories and issues we think business owners should be following this week great to have you here Jean I am so happy to be here Lauren Feldman as usual I'm glad that who else is going to be there we missed a couple of weeks it's good to have you back uh I always miss it when we can't do it um so let's dive right into it let's start with a recent column you wrote about a gusher of money that is headed for small businesses in the form of the state small business credit initiative or ssbci uh my guess is that a lot of people are not really familiar with this program tell us about it yeah um thank you for bringing it up because I've been trying to get the word out about it I mean you know we've had uh you know we've had the paycheck Protection Program we had the economic injury disaster Loan program you know other stimulus aid for Co that like Co hope you know was in the rearview mirror at least I hope it is in the rearview mirror um but it ain't over and a lot of people aren't aware that the government has just started doing out $10 billion in help for small business was part of a prior stimulus Bill the American from a year ago right yeah it was the American Rescue family plan act that builds everything back better and is good no not build one of those things um but anyway it authorized $10 billion and and I just want to make sure that you if you're running a small business um you know you should know about this this is not like a minority business thing although minority businesses and businesses and low to moderate income areas will get uh some money some priority uh but really it's for anybody running a business Paul DS can apply for this and Jay gos and all the people in your community can apply for uh these ssbci funds the state small business credit initiative and it works like this the $1 billion has been whacked up among all 50 states and territories and tribal communities you don't even want to know the formula it's not that important and I can't even understand it but it's been whacked up it's a lot of money but it goes through the states right yes so the federal government gives the money to the states the states turn around and they give the money to organizations in the state local Community organizations community development financial institutions cdfis or minority deposit institutions mdis or Community Banks or in Philly there's something called the Ben Franklin technology partnership which makes us an Economic Development Fund which makes Equity Investments and convertible debt investments in startups and small businesses and then there's other nonprofits that just offer you know they give grants out you know to help their local businesses all the money is coming out to those organizations so if you're so this money could come in in any form it could be Venture Capital it could be a loan it could be a grant a loan a grant uh you know an equity investment like a venture investment as well and it's out there and these these organizations are getting all this money dumped on them and they're mandated to get it out there so you know if you're listening to us talk and you're in Nebraska or Illinois or you know New York or California Google your state and SS BCI State small business credit initiative you will start finding out the organizations locally that's getting the money and then reach out to those organizations and let them know that you're there and say hey I you know I because if you do get a loan from them it's it's much easier to get the loan from them and and the rates of Interest might even be better than Market rates as well U but you might also get grants and Equity Investments too it's 10 billion that's going out there Lauren so if you're a small business and you're looking for financing or or Aid or help or startup money it's like a great resource so you you you mentioned that a lot of it is targeted toward minority entrepreneurs um some not a lot some interesting uh and and the point of that is that they're trying to reach uh small businesses that may not have had access to to financing uh for other reasons uh underrepresented entrepreneurs who don't have a banking relationship or whatever it is but any other business could potentially uh qualify and I guess it depends on the rules of the organization that gets the money in any given state that is correct and there are some organizations like Community Banks that give you know they lend money out to local businesses like any Bank uh there organizations that just invest in startups or certain industries there's nonprofits that do give money just to you know minority owned businesses you know LGBT or female owned or uh Black Or Hispanic so you know it depends um but it's it it's there and it's available and it is it is out there for any small business to apply for and you know listen you know you see the economy taking a little bit of a downturn the coming months like a lot of people talking about um you know you want to have capital or availability of capital this is a good resource for doing that so um but remember these organizations won't know about you unless you make yourself known and they're looking to get the money out there so you've got to take the be proactive enough to reach out to these people and see what kind of deals they can do with you and even if you're not interested in borrowing money there may be other ways of getting you know it might be a grant that you could qualify for yes even if you're investment if you're not interested in taking on debt right or uh if you are in the midst of trying to borrow money say from a bank um and you they they're they're allowed to use this money as insurance or collateral uh to help you get a loan from a Traditional Bank as well so all of that you know is out there for for any businesses and you asked about it being targeted for minorities it's a government program and like every government program it is uh it's all about jobs so they want to get the money out to businesses so that businesses hire people and that's the purpose of it so I just want to make sure we we don't misconstrue this as some just a handout to a bunch of minority-owned businesses that's not the case this is you know this is loans and equity and and and grants to all businesses um with the hope that they're going to grow and hire people great um next topic The Wall Street Journal recently uh wrote a piece about businesses uh dealing with inflation by adding all kinds of fine print fees and Sir charges to kind of do a surreptitious price increase perhaps without their customers fully realizing it you wrote a piece from your own personal experience suggesting that that's not really a great idea tell us about it you know my own personal experience was I was at a resort recently and they charged me a porterage fee porterage and I didn't know I was like is this Harry porterage I've never heard of porteridge a porterage fee is like a fee for the uh the people there to take your bags up to your room the porter the porter right and it was like I don't know like 25 bucks that was added onto our room fee my room fee I have like a carry-on bag you know like I don't even I mean I listen I sometimes wear my underwear more than two days in a row Lauren but maybe that's more information than you need to know about oh definitely I travel lights I travel light let's just say and you but I'm being charged the Portage free and listen you know it's like it's don't do that if you're you know if you're an organization that is trying to make up for uh price increases or you know or supply chain issues and then you just you you advertise your customer we're going to charge you this extra fee um it just wrinkles people build it into your pricing for God's sake you know we don't need to know about that for the extra 25 bucks I'm sure somebody at the hotel some smart accountant could have done the you know done the math to say you know if we charge all of our if we bake in $25 to the room rate you know what I mean then then you know it's just it's not going to stop people from staying at our hotel I'm not sure you need a smart accountant to do that j a smart account yeah exactly a dumb account it's funny because I'm in just right now like I'm in down the Jersey Shore right now talking to you and there's a number of restaurants around you in the Jersey Shore that offer they tell they warn you they threaten you that if you uh pay with a credit card you're going to pay like 4% more on your bill it's an added fee you know and um and but but but they're they are giving you the choice so it's not like they're just saying hey we're going to charge you a 4% you know fee regardless they're saying listen you have a choice you can pay by cash and not pay the fee or you can you want to use the credit card you're going to pay the fee that's fine I don't I don't mind businesses giving options to their customers but just you know throwing on additional fees and search charges is not good and while we're talking about that you know I when I'm when I've been writing and speak I've been speaking to a bunch of different groups lately and about you know getting your way around inflation and you know one of the biggest parts of uh one big issue that everybody is the cost of logistics you know and freight and delivery it's gone up about 40% this year most you know most on you know domestic delivery services domestic Transport Services trucks and all of that you know and I got to tell you it's that's a tough one to figure out how to get around I do see some of my clients reaching out to their customers and saying we need to can can we share this fee like they ask you know like we would like to charge a sir charge it's shortterm or it's only on this delivery but as you know freight costs have gone up significantly um so you know we would like to do this does that work asking believe it or not I mean if you have a good enough relationship with your customers they know that it's going on you know you can be transparent and say like this is like an unusual charge it it is what it is we want to get you your product that's you know they're charging us $100 for Freight so you know we'd like to split it 50/50 please let us know if that's initia will be on your next invoice and at least it's giving that person you know the customer they can say no um most of them don't most of them are like they understand and they almost appreciate being the trans you know transparent but that gets me back to this resort with the [ __ ] porterage face sorry you can cut that out if you want but like I had no choice I did you ask them about it did you ask the hotel yes I said it doesn't like we're not using it oh I'm sorry that's just a fee that we we include is part of the I'm like would are you kidding I know and it's you know you're trying you're trying not to be a jerk about it but was 25 bucks laoren that's like the equivalent of like a beer at the hotel [Laughter] bar it's I I wouldn't want to be the the person behind the desk who has to explain that all day um I mean it's bad enough if you actually use the service let alone if you're not using it yeah I could be pretty grumpy so anyway she I'm sure she's been replaced by a robot by now all right along those lines next I want to talk to you about a piece you wrote about uh why employee ownership is growing uh you offered several reasons including that it offers uh owners a way to exit if they're looking for an exit uh it offers big tax savings it can improve a a company's culture there are some statistics that back that up um but it was a little surprising for me to read it because you're like the last person I can imagine going for something like this not writing about it but actually doing it with your own business am I wrong about that isn't that funny I would never do it it's I that's funny that you say that Lauren because I've written about it I did a big piece on this for the inquire in Philly a couple months ago and I interviewed about a dozen local business owners that have employee ownership you know arrangements and they all said it was like the best decision they ever made and by the way this can apply to any size business I mean I have 10 employees but it can be for a five employee company or a 500 employee company it is expensive so you have to have a certain size there's big reason there's it's and and I do say this when I when I write and I talk about it I think employee ownership is the tax advantages are unbelievable because you set it up as a separate entity you have a bank finance your buy out of shares and then you know then you get a tax deduction every time your company pays the bank and then whatever percentage that that the entity bought of your company because you have to sell your old company that's that the income is tax-free to that entity it's unbelievable and then it's a great benefit for employees I mean I mean come on Lauren you're looking at the news this week I mean Google employees are angry and Netflix employees are angry and Tesla employees are I'm sorry there's no more Tesla employees but you know Amazon employees are angry everybody's angry you know they they're vo that because the narrative is that employees want to have a say they want to have some skin in the game for the companies they work for they want to feel connected and and that's why having an employee ownership type of you my understanding is these deals don't necessarily give employees a say um oh it gives them a say it doesn't give them control well certainly not control but um but but I think one of the things that appeals to entrepreneurs and business owners who go this route is that it is a way to maintain control and you can take some money off the table while still running the business as your business and there's somebody there's there rule there's a trustee and you know there rules that you have to follow but nobody's telling you uh you know where to open another store or when to buy another truck or unless you sell more than 51% of your company to theend you know I mean you could give up control and and you know a few of the people that I interviewed they sold off 100% of their company in phases over like a five or eight-year period so ultimately that control does get given up a lot of the people I spoke to sold less than 50% of their company to this entity uh which is owned by their employees so they maintained you know all control of it but then they got a check I I'm no expert on this but my understanding is that it is possible to sell more than 50% and maintain control through the board so long as you make good choices to the board it can remain it is true you can have depending on the voting rights that you give to the entity that brought you know that that bought the shares you're absolutely right you can have the ability to remain control it depends on how you set up the organization tell us quickly why would you never do it yeah I was just going to get back to that there is um there's a cultural thing that I can't get my arms around like I don't want my employees telling me what to do it's none of their freaking business okay you get your paycheck running my company I think I'm a good boss and a good owner and you have a good life and it's my company not yours number two is is that you know depending on how much you give up or what's stipulated in the agreement you know shareholders like to see numbers right you know they you know and I don't want to share my employees like how much money I lose every year it's in embarrassing so you know I just you know it's just it's not my it's it's not my thing you know it's not my culture here but there are a lot of open-minded smart um and and more successful business owners than me that say Hey you know we would like to share this because there's a lot of benefits uh for allowing employees to see our numbers and getting the input from our employees and that's the kind of organization I want to run well especially at a time like this what we've been through with the great resignation if it does something to BR build a culture where employees feel more engaged that's obviously a positive thing think about it like you know you're trying to attract good people to your company and like you're like hey you come and join us and after a year you you can get shares in the company actually be an equity owner it's a pretty cool thing I mean that could be the difference for hiring that good employee and you know so more power to him so I know your goal is to have all robots as employees I guess I guess that removes the option of employee ownership doesn't it yeah a little B a little bit so that is my goal so thanks for thanks for making that clear all right uh lastly uh you shared your disappointment in another piece over attempts by uh the new mayor of New York City Eric Adams to ease the city's regulations on small businesses uh tell us about that a little bit so yeah so the mayor um you the mayor issued a proclamation that they were going to have a small business forward thing in New York first of all doing business in New York City I don't know you got to be mentally ill to own a small business in New York City it is the regulations that you know exist in that City between uh minimum wage and vacation scheduling and and you know wait everybody's got minimum wage laws yeah no but it's there are a lot of regulations in running in New York City without you got to predictor schedules in advance you get you get fined if you don't provide lactation space or if you discriminate based on a person's hair and those antih harassment rules these are all like local rules and state rules that are a lot more than in many other cities and states in this country and then so you know the new mayor mayor Eric Adams he takes over and he's got uh you know a plan where he wants to reduce regulations in the city and they they finally came out with the 118 reforms to the uh regulations in you know in the city you know uh which is fine you can look at the list I wrote this piece in the hill so I've got a link to like all the different you know forms and it's nice that it eliminated certain regulations but um it's still left a lot of regulations in place like if you were running a business in New York um you you can still get fined if you leave a window open while operating an air conditioner you can get fined if you don't if you have a business that uses a scale you know you you measure things and if you don't put a scale between the buyer and the seller you get fined or if you don't you know I don't understand what do you mean between the buyer and the it has to be observable is that what you're saying yeah yeah yeah I think like if you run like a deli or something and your you know your wank pastrami or whatever the hell you do in a deli you know you got to have like the scale between like the deli guy and the customer so the customer can see if you're putting a thumb on the scale yeah that's exact I think that's the whole point of it you know there's you know you if you don't list prohibited drinks on a children's Meal menu you know like any beverage other than water milk fruit vegetable juice or whatever you get fined for that if you have a dirty sidewalk whatever that means just as dirty um you get fine there's still a lot of stuff in there that like you're running a business you're like Jesus you who's got the you know you know the time to track it just doesn't go far enough and the other point I made is that you know listen you can have I think rules in regulations are fine it's they really for the public safety there're always there's always going to be some examples of being excessive but to me the most excessive the barriers to starting a business in New York or running a business is all the licensing roles in the state I mean they are just countless you know you know Lord I mean like to be a cosmetologist in New York the cosm I don't even have any hair but for somebody to cut my my two hairs on my head you have to complete a thousand hour course of study you know you have to if you want to be a locksmith you have to get because of the entrepreneurs or business owners who are established and don't want competition yeah I mean there's that as well you you're right I mean and and that does that make it right no listen we can all agree that there are so many ridiculous regulations that it it just seems It's So Common Sense we could all get together and make this easier I just did a a segment on the the weekly podcast where I asked uh three of the owners who were there what regulation would you eliminate if uh if you were king for a day and they had great suggestions and we we we talked it through there you know this needs to happen that said I think there's a lot of I get annoyed sometimes because I think business owners focus on um the numbers of Regulation which I think is misleading it doesn't matter it's not the number it's the quality either it's good or it's bad uh and I think sometimes there's too much focus on little stuff and that just muddies the water and you know removes the focus from where it should be on the on the truly honorous regulations that we could all agree on getting rid of so even in your piece there were a couple you know you mentioned you know the the the nation's highest minimum wage I'm not sure it is the highest I think there are some places where it's more than $15 an hour but there are companies paying more than $15 an hour but I don't know if there's actual location I think like there's a part of Los Angeles or in California I think there's some jurisdictions or municipalities where it might even be higher let's say it's the highest it should be highest York get more than $15 an hour shouldn't it be highest in New York City it's expensive to live there it the minimum wage uh listen I I I will tell you something about minimum wage New York City can charge whatever they want for a minimum wage I mean I I fully support the local jurisdictions you know having making their decisions on minimum wage so if you're a new New York voter and you voted in a city council that supports a $15 or $25 an hour minimum wage and that's what it is that's fine but just know that you know the the more that you the higher that you make minimum wage uh it will have either one or two consequences you will shut businesses down or they're just going to charge a lot more for their services which will raise prices for everybody else there is academic evidence that you might be wrong about that genan that the additional money that employees are paid actually breeds more business for existing businesses and that when they do have to raise prices it isn't always by a dramatic amount especially at a time like this when everybody's raising prices anyway I'm going to tell you right now I think that we should you and I should schedule a conversation on just minimum wage I need a couple weeks of time to prepare so that I can lay out all of the research done that all and all of it contradicts each other so for every claim that you just made about you know yeah you know the employees turn around and they spend in their local economies and I you're going to point to 10 studies that say that I will point to another 10 studies that say the opposite except your 10 studies were financed by people that support minimum wage and then my 10 studies were financed by people that don't support it do you know what I mean so uh there something to that but I'm not sure it's all that uh but let's not get hung up on minimum wage you also mentioned um the uh the requirement to provide space for lactation yeah isn't that wait you're laughing isn't that a legitimate need uh I don't know I mean you know if that is I guess a young mother are you yeah I'm not a young mother so I don't know how many young mothers are are coming to work and I guess you know if that's something that needs to be there then you know that's fine and and frankly you know I don't I don't know if that was one of the things that I was really complaining you mentioned it both in the piece you wrote and earlier in this conversation here you also mentioned the one about discrimination based on a person's hair which is a a real concern for a lot of people yeah I mean again you know these are all it's just these are you know should they be imposed specifically on smaller businesses should there be a number of employees or a size of a business where they get imposed on among all the other regulations that they have to you know they have to by you know I don't know but I do you know you know I do want to say though that there are there you know the regulations themselves to me this is my my feeling okay Lauren is that it it should be for the health and safety for the public okay so the proper handling of food or you know not selling cigarettes to miners you know and operating a safe workplace now providing lactation space that's not doing health and safety to the public that's like an accommodation to an employee which is fine let me finish if that's what employer wants to do to attract employees and they do that then I think that that's fine it's the same thing with you know hair now if there's you know if if you know people need to wear their hair in a certain way because I don't want a big piece of hair getting into my chicken pot pie then that is certainly a regulation that I think is for the health and safety of the public but if it's just because to accommodate our an employee wants to look when they come into work again I just think that choice should be left up to the employer I don't see what that has to do with the health and safety of the public so that's my position fair enough Jean Marks as always I appreciate you're taking the time uh Gan is a CPA who writes weekly on small business for the guardian the hill the Philadelphia inquire the Washington Times Forbes an entrepreneur you can also hear him on ABC radio's ey on the world with John Bachelor Jean hosts two small business podcasts of his own with paychecks Corporation and with the Hartford thank you Jean Lauren I love arguing with you it's so much fun we're going to have to do that minimum wage conversation uh we'll we'll both prepare for it we have that's exactly right we have to prepare for it because I I don't want to have a conversation I hate when people have conversations and they're just throwing stuff out like they think that they know it do you know what I mean and it would be fun to have a conversation yeah but where you and I can both you and I can actually both say like okay well this study by the University of Oregon said this and then I could say well this study from University of Illinois said that and and then we can argue about you debate the the studies themselves the actual data I love doing this with you jeene because you are always looking for whatever issues are topical for business owners at the moment and digging into them and and actually doing research and interviewing and it always makes this fun so thank you for doing it thank you Lord we'll see you next week have a great week [Music] everyone e