A Big Bank Rant

Plus: How California businesses have been going underground to survive. And how the owner of a landscaping business raised the capital he needed on Twitter. 

FINANCE

Loan broker Ami Kassar says he’s really done with big banks this time. No, really: “I always try to steer my clients away from the big banks, cautioning them that if something goes wrong in the loan process and we run into a problem somewhere along the way, we could end up lost in a maze between multiple states, and everything could steer out of control quickly. Over the last 24 hours, I have learned that I should practice what I preach. An inbound wire to my account (yes I confess, I  bank at one of the big banks) miraculously has not shown up for a week. Done being patient, I grew determined to tackle the mammoth monster and find my money.”

  • “Here is my status over the last 24 hours. I have spent 199 minutes (that’s three hours and nineteen minutes of my life) on 14 phone calls to seven different departments and spent another hour at my local branch.”

  • “The furthest I have gotten is that a researcher will be assigned to my claim, and I can expect a response within ten business days. And the managers and supervisors are in ‘a meeting.’” READ MORE

In Alex Bridgeman’s latest Think Like an Owner podcast, he talks to the owner of an Orlando landscaping business about how he raised all of the capital he needed to buy the business on Twitter: “I’m lying in bed one night and I just posed, ‘Hey, found this business. Really interesting. Here’s what I would do, ABC. Here’s the pros. Here’s the cons.” I put my phone down and I’m lying in bed with my wife and my phone just blown on, buzzing, buzzing, buzzing. The result of that thread was about 350 people reaching out through direct message. I made an effort to get their emails or contact every single one of them. It ended up being, at the end of it, about 25 real multiple conversations with people going very in depth, just like a normal financial or capital raise would be in the real estate world or development world.”

  • “My follower count was not 30,000, 40,000, 50,000. I had a couple thousand followers.”

  • “Listen, man, I grew up dirt poor. I don’t have friends and family that have a ton of money laying around to invest.”

  • “Within 45 days of that post, I had all the capital that I needed raised and the investor is JD Ross from Opendoor, and I couldn’t have asked for a better investor, better partner.” READ MORE

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THE COVID ECONOMY

As potentially more contagious coronavirus variations emerge, a new playbook for Covid protection is evolving: “After nearly a year of study, the lessons include: Mask-wearing, worker pods and good air flow are much more important than surface cleaning, temperature checks and plexiglass barriers in places like offices and restaurants. And more public-health experts now advocate wide use of cheap, rapid tests to detect cases quickly, in part because many scientists now think more than 50 percent of infections are transmitted by people without symptoms.”

  • “The safety measures have taken on new urgency in recent weeks as new infections, hospitalizations and deaths rise across the U.S. and Europe, and potentially more-transmissible variants of the virus spread around the globe.”

  • “This phase of the pandemic is prompting a new wave of stay-at-home orders, closures and travel restrictions, important first steps to curbing contagion.”

  • “Temperature checks have become less popular among some employers because scientists now know that not all Covid-19 patients get fevers.” READ MORE

In California, businesses have been going underground to survive: “The COVID-19 shutdown orders imposed in March and again during the holidays crippled large swaths of the California economy. But even before an easing of restrictions announced this week by Gov. Gavin Newsom, some business owners continued to carry on covertly. In Los Angeles and other counties with forced closures, you could still get your nails done and your hair trimmed, practice Pilates inside a studio and eat a restaurant meal with a group of friends — no takeout containers involved. By continuing to serve customers, the businesses violated the spirit — and in some cases the letter — of public health orders and complicated efforts to stem the spread of the coronavirus, health officials said.”

  • “But those who have been operating for months under the radar say their decision isn’t a repudiation of face masks, social distancing or government overreach, or about enabling parties during a pandemic.”

  • “It’s simply to make ends meet, and in the absence of sufficient financial assistance and clear guidance, they have been relying on themselves — and discreet customers they can trust — to do it.”

  • “‘I have a son to feed and to support, and rent to pay, and it was just getting too hard to not work at all,’ said hair stylist Joanna Ho, 40. ‘Even when the government was giving us stimulus and unemployment, it wasn’t enough.’” READ MORE

The pandemic has wiped away six years of growth for restaurants: “More than 110,000 eating and drinking establishments closed last year, either temporarily or for good, and 2.5 million restaurant industry jobs disappeared, according to a new report that tallies the devastating toll of the pandemic. ‘If one looks at the industry in terms of actual sales volume level at the end of 2020, it was down at 2014 levels.”

  • “Restaurant and food-service sales came in at $659 billion last year — that’s $240 billion lower than its pre-pandemic projections for the year of $899 billion in total sales.”

  • “The group is projecting a bounce back in food and beverage sales in 2021 to $731.5 billion, still far below where things stood before Covid hit the industry.” READ MORE

Israel offers an early look at what life may be like as vaccinations become the norm: “The answer: Not much different to now, public-health restrictions remain in place and new variants of the virus are on the loose. ...  In about two weeks, Israel is expected to have given 2.5 million of its approximately nine million people both their first and second shots. Israeli officials are eyeing a full reopening of the economy if they can control the new variants in the coming weeks. Israel imposed a third lockdown in December and said Sunday that it would shut its only international airport until at least the end of the month to halt the spread of new coronavirus variants in the country. New cases in recent weeks hovered at about 9,000 a day but have come down over the past few days to around 7,000.”

  • “‘The war is still ahead of us,’ Chezi Levy, director-general of Israel’s health ministry, told Radio Kan on Monday. ‘If we don’t know how to behave according to the regulations we’ve made, we won’t beat this sickness. The vaccines alone won’t be enough.’” READ MORE

REGULATION

President Biden’s Buy American plan could help smaller businesses: “Biden's order directs federal agencies to revise the definition of American-made, raising the threshold of U.S.-made components necessary to be considered ‘Made in America’ and to qualify for the price preferences for domestic goods. In other words, the government will start requiring more of a product's parts to be made domestically, and it may now be willing to pay more for a locally made item versus one made by a foreign supplier.”

  • “Biden's order establishes a website where American businesses can see the contracts awarded to non-U.S. vendors, along with any notice of ‘Buy American’ waivers granted by the General Services Administration, the federal agency charged with the bulk of the government's procurement needs.”

  • “For small businesses, the order also presents federal contracting opportunities, as agencies must now utilize the Manufacturing Extension Partnership, a national network that works with small and midsize manufacturers across the U.S. and in Puerto Rico.”  READ MORE

The mayor of Miami is making it easier to start businesses in Miami: “The city of Miami is launching eStart, a program to streamline and digitize the process of obtaining permits to start a business. It replaces a creaky application process that previously could take three to six months and require multiple in-person visits to City Hall. The goal is to make the process of getting a permit in Miami similar to the seamless experiences that, for example, Stripe Atlas provides for incorporation online. New business growth is vital to America's economic recovery from the pandemic, and local government is the level at which entrepreneurs make their dreams into reality. While Miami has already become a leading city in entrepreneurial activity, according to various rankings, its old permitting process was, by one user's account, ‘unbelievably painful.’”

  • “EStart's goal is to reduce processing time for entrepreneurs from several months to several days, or perhaps even faster.”

  • “‘Now, with Covid, I've realized that the entirety of government can be virtual. You can get to a point where you never have to walk into a government building again.’” READ MORE

STARTUPS

A bank aimed at underserved communities is off to a good start: “Greenwood Financial, a new challenger bank aimed at serving Black and Latinx communities, has amassed 500,000 signups in the first 100 days since opening its waitlist in October, said Ryan Glover, an Atlanta-based entrepreneur and founder of Bounce TV. Glover said he thinks the platform, which is expected to launch in May or June, is on track to hit more than 600,000 active accounts by the end of the year. ‘We see that there is definitely an appetite for what we're doing,’ said Glover, who founded the digital bank alongside civil rights leader Andrew Young and rapper and activist Michael ‘Killer Mike’ Render.”

  • “The venture, which raised $3 million in seed funding from private investors in October, will launch with spending and savings accounts.”

  • “Other features will include virtual debit cards, peer-to-peer transfers, mobile check deposits and free ATM usage in more than 30,000 locations.”

  • “Glover said Greenwood plans to add lending in the fourth quarter of 2021, with credit and investing products expected to launch next year.” READ MORE

CONSTRUCTION

Lumber prices are hitting record highs: “This price surge during what is typically a winter lull has surprised the industry, raising homebuilding costs and forcing many buyers to purchase only their immediate needs. That may filter through to housing prices, while also boosting earnings at lumber companies such as Weyerhaeuser Co. and West Fraser Timber Co. ‘Everyone knows that current prices are stupid but the choice is either pay up or run out,’ Vince Bulic, president of Vancouver-area Yaletown Lumber Industries, said in a Jan. 22 note. ‘Comfortable prices do not seem to be on the near-term horizon.’”

  • “Record-low borrowing rates and an exodus from major cities triggered a homebuilding spree, with U.S. home construction starts in December reaching the fastest pace since 2006, while lockdowns also spurred demand for home renovations.”

  • “At the same time, mills couldn’t ramp up fast enough to keep available supplies from drawing down.” READ MORE

HUMAN RESOURCES

It turns out money may actually buy happiness: “Harvard psychology doctoral student and former software product manager Matthew Killingsworth was developing a measurement tool, an iPhone app called Track Your Happiness that pings users at random intervals and asks about their activities and feelings, often using a sliding scale for answers. One early finding, published in 2010, was that wandering minds bring unhappiness. Killingsworth, now a senior fellow at the University of Pennsylvania’s Wharton School, has since used his app to measure the link between happiness and income. The conclusion, just published in the Proceedings of the National Academy of Sciences, is that while the connection is stronger for life satisfaction than it is for experienced well-being, it doesn’t disappear for the latter after $75,000 or $90,000. Money keeps buying happiness, even for the affluent.” READ MORE

THE 21 HATS PODCAST

Episode 46: A Fabulous Conversation About Marketing: This week, we introduce Stephanie Stuckey, a new regular on the podcast who tells Dana White and Laura Zander about the iconic road-stop business her grandfather founded: when it peaked, what went wrong, why she bought it back, and how she plans to rejuvenate it. Along the way, we discuss whether small businesses should outsource their marketing, how hard it is to find an agency that listens, and what an agency should cost. Plus: Stephanie offers a tutorial on how to engage followers—and get free consulting—on LinkedIn.

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