Congress Certifies Election
Amid the chaos, the SBA delivers new guidance on the second round of PPP. And the last video-rental chain finally succumbs.
GOVERNMENT
Business leaders call for an end to the violence and a peaceful transition: “The reactions came in a week of statements and meetings involving corporate executives who have publicly urged a smooth transfer of power, while Mr. Trump and others have disputed his election defeat. Chief executives, including the leaders of Alphabet’s Google and Bank of America, condemned the violence.” READ MORE
Andrew Sorkin of CNBC and The New York Times’ Dealbook challenges his readers: “This newsletter focuses on the intersection of business and policy. We try not to be political. Yet in this moment when our democracy is under siege, important questions must be asked about business leaders who enabled Mr. Trump and, in turn, share some degree of responsibility for the disgraceful acts that took place in Washington yesterday. And there were many enablers — educated, smart, articulate, often wealthy people who were willing to ignore Mr. Trump’s threat to democracy in the name of economic growth, lower taxes, lighter regulations, or simply access and proximity to power. At a time when business leaders tout their ‘values’ and ‘social responsibility,’ how should those enablers — and the institutions they run — be considered after all this?” READ MORE
FINANCE
Last night, amid the chaos, the SBA delivered its first round of guidance about the new PPP loans. The new information includes the following:
“The last day to apply for and receive a second-round PPP loan is March 31, 2021.”
“If you received a first-round PPP loan, you must state that you have or will have used your first PPP loan for authorized purposes on or before the date you receive your second PPP loan.”
“If your aggregate revenue is down at least 25 percent in 2020 compared to 2019, you are eligible for a second round PPP loan.”
If your loan application amount is under $150,000, you will not be required to provide documentation to prove your revenue loss at the time of application but will have to when applying for forgiveness.” READ MORE
CLOSINGS
The last chain of video rental stores, Family Video, a family-owned business that outlived Blockbuster by a decade in part because it always owned its buildings, has finally succumbed: “‘The impact of Covid-19, not only in foot traffic but also in the lack of movie releases, pushed us to the end of era,’ wrote Keith Hoogland, the company’s CEO, in a statement announcing the closures. But the Hooglands don’t appear to be fully out of business. They own the real estate that underpins the Family Video stores, which Forbes estimated was worth about $400 million when we profiled Hoogland in 2017. ‘We will remain tied to our communities through our Legacy Commercial Property division, owning and managing buildings in the community,’ he confirmed in Tuesday’s statement.”
“For years, Family Video operated as a way to quickly pay off the mortgages on those properties, which Hoogland knew would be much more valuable in the long run.”
“Over time, as the video rental market grew weaker, he added other revenue streams as well: fitness centers, electronics repair shops, CBD sales, Marco’s Pizza franchises and more. But ultimately, the economic whiplash caused by the pandemic was too much to keep the core business alive.” READ MORE
The Golden Age of Silicon Valley cafeterias is coming to an end: “Over the past decade, the over-the-top cafeteria has become one of the hallmarks of tech office culture, along with hoodies with corporate logos and permissive bring-your-dog-to-work policies. Tech companies have hired thousands of workers from some of the best restaurants in the Bay Area to staff their kitchens, providing them with a bounty of local produce from which to churn out breakfast, lunch, and dinner. The free meals became such a fixture in tech offices that San Francisco has considered banning or restricting new employee cafeterias, because some officials worried that in-office dining options were damaging local restaurants. At the same time, the boom in corporate dining created a new class of jobs that offered more stability than typical restaurant positions and could pay over 20 percent more.”
“Tech’s hiring spree made it hard for restaurants to hold on to top talent, says Gabriel Cole, who ran Airbnb’s global food program before co-founding Fare Resources, which designs corporate dining programs.”
“‘It also created some better quality of living for a lot of cooks, which is the upside,’ he says. ‘I did it because I wanted a 9 to 5, I wanted benefits, and I wanted a better quality of life.’” READ MORE
THE ECONOMY
Costco said December sales were up 12 percent: “The increase was driven by frozen foods, sundries and liquor sales, despite lower frequency of sales world-wide because of restrictions tied to the coronavirus pandemic, the company said. David Sherwood, assistant vice president for financial planning and investor relations, said in a prerecorded call that traffic declined in Canada, Mexico and the U.K. but rose in the U.S., Costco’s largest single market by number of warehouse locations. The lower shopping frequency, however, was more than offset by higher spending, with the average transaction world-wide rising 11.4 percent from the year-ago period, he said.”
“Costco, one of the companies that remained open during the coronavirus pandemic because its services were deemed essential, has largely fared well financially during the pandemic ...”
“The company said that e-commerce comparable sales rose 62.5 percent in December.” READ MORE
Manufacturers ended 2020 on a high note: “Factories in the U.S., Asia and Europe boosted their output as 2020 drew to a close, aided by a rise in new orders and a revival in trade that has continued despite a sharp rise in coronavirus infections across many large economies. The resilience of the global manufacturing sector contrasts with weakness in services businesses that rely on close physical proximity, and which have suffered as consumers try to lower their risk of infection and governments impose restrictions on their behavior. Economists expect that divergence to be a feature of the global economy well into 2021, and until vaccines are distributed broadly enough to ensure widespread immunity against Covid-19.” READ MORE
HUMAN RESOURCES
A new Trump administration rule gives gig-economy companies more flexibility: “The Labor Department in a final rule released on Wednesday would make it more difficult for a gig worker, such as an Uber or DoorDash driver, to be counted as an employee under federal law. That means those workers wouldn’t be covered by federal minimum-wage and overtime laws, and they could be responsible for paying the employer portion of Social Security taxes.”
“The rule won’t go into effect until March 8, after President-elect Joe Biden is inaugurated on Jan. 20.”
“Biden spokeswoman Jen Psaki last week, in a press briefing, pointed to the then-pending independent contractor rule as an example of the type of last-minute regulation Mr. Biden would seek to halt or delay.” READ MORE
THE 21 HATS PODCAST
Episode 43: All It Takes Is One Mistake: Paul Downs, Jay Goltz, and William Vanderbloemen discuss the impact the past year has had on their businesses and on themselves. William talks about the positive side of having to get back to a startup mentality: “It's definitely been a silver lining in the middle of a very dark cloud.” Paul talks about hoping he can offer his employees a good place to work for as long as possible: “I can give them probably another 10 years. And then beyond that, I don't know what will happen.” And Jay talks about the mistake he made that could have been fatal for his business: “If I wouldn't have gotten the PPP money, I don't know…”
You can subscribe to The 21 Hats Podcast wherever you get podcasts.
You can also click on the button below to listen to the podcast or read a transcript.
