I Hope You’re Not Torturing Yourself

Today’s Highlights: EIDL repayments have been deferred. More signs of economic life. And a radically different approach to private equity.


Episode 53: I Hope You’re Not Torturing Yourself: Should Stephanie Stuckey sell pecans on Amazon? Should Laura Zander wholesale yarn to discounters? Should Jay Goltz’s businesses be active on Pinterest (assuming Jay knows what Pinterest is)? This week, we cover those issues, plus whether the owners are ready for an economic boom and how Laura made the painful decision to fire several employees she inherited when she bought her wholesale yarn business in Texas. “You have to do it,” says Jay. “And it doesn't make you a bad person. It makes you a bad boss if you don't do it.”


How the Hatch, a small bar in Oakland, dared to survive: “The New York Times followed the bar and its employees for the first months after the lockdown, chronicling overdue bills, missed rent payments, a failing takeout business and cancer diagnoses. In the middle of a second lockdown in December, as coronavirus deaths broke records daily, the bar’s owner, Louwenda Kachingwe, known as Pancho, said he thought the Hatch might have served its last beer. He is happy he was wrong.”

  • “Last month, [Mr. Kachingwe] and the Hatch’s manager, Robin Easterbrook, opened Pothead, a flower and wine shop, next door to the Hatch.

  • “They also took on a third lease in the empty space next to Pothead as a place to build larger floral arrangements for events, to stage a new operation making bottled cocktails and sauces, and to sublease the storefront to some friends’ apparel business.”

  • “Such a bet in the midst of a pandemic was bold, but Mr. Kachingwe saw opportunity.” READ MORE


Don’t even think about private equity without understanding Brent Beshore and Permanent Equity: “Brent Beshore likes to say of the businesses he invests in, ‘Boring is beautiful.’ He runs a private equity fund with more than $300 million in capital, but he’s not really a private equity guy. He’s actually more of a Warren Buffett, buy-and-hold guy. He invests in businesses with no timeline to sell. He doesn’t force those businesses to take on debt. He’s happy to keep the leadership team in place. Would he be interested in buying your business?” MORE HERE

Arlan Hamilton and Backstage Capital are raising money for what could be the first company to hit the new $5 million crowdfunding limit: “March 15 marks a key milestone of the Jumpstart Our Business Startups, or JOBS Act, which then-President Barack Obama authorized to make it easier for small businesses to raise money. The rule change, which was announced by the U.S. Securities and Exchange Commission November 20, sets a $5 million limit for crowdfunding campaigns, up from the previous ceiling of $1.07 million. The rule change is pivotal for Hamilton's investment firm, and it represents another big step forward for crowdfunding investors and the startups they back.”

  • “Specifically, the new crowdfunding limits should be a big help to startups reliant on their communities to provide them with early-stage funding, rather than, say, a wealthy family member or angel investor.”

  • “Crowdfunding also makes it easier for entrepreneurs to keep control of their companies.” READ MORE


EIDL loan repayments have been deferred: “The SBA released good news yesterday for recipients of EIDL loans.  For those who received an EIDL loan during the calendar year 2020, the first payment is now due 24 months after the initial loan date, instead of 12 months.  For those who receive an EIDL loan during the calendar year 2021, the first payment will now be 18 months after the loan date, instead of 12.” READ MORE


Hotels are showing signs of life: “The past year was by many measures the industry’s worst, marked by employee furloughs, plummeting occupancy rates and the evaporation of most business travel. But this year has already offered glimmers of hope. Hotel share prices are rising, scores of properties are reopening and lodging companies are hiring again. ... Few expect hotels to return to their pre-pandemic level of business for another two to three years. International travel to the U.S. collapsed in 2020, and hoteliers hold little hope it will accelerate much this year. Demand for conventions and large meetings that have been a staple for many large hotels in downtowns and resorts also looks grim in 2021.”

  • Yet there is recent evidence to support that the worst might be behind the industry. U.S. hotel occupancy for the week ended March 6 stood at 49 percent, the highest since October and just a percentage point lower than the pandemic peak in August ...”

  • “The rate was about 65 percent  in March 2020 before the pandemic hit.”

  • “‘We do not expect sustained group demand until herd immunity has been reached,’ Mr. Freitag said.” READ MORE

You can tell restaurants have a long way to go by looking at the cost of a liquor license: “The downturn appears to be most obvious in Center City Philadelphia, where offices are still largely closed, throttling the downtown lunch trade. Tourism is off, conventions are nonexistent. A key indicator of the industry’s health can be found in liquor licenses, whose prices in Pennsylvania are based on supply and demand. In February 2020, a high point in the open market, a restaurant license in Philadelphia County would sell for about $185,000. Right now, several are available at $135,000 to $145,000, said Edward Taraskus, a Philadelphia lawyer who specializes in liquor law.”

  • “But toward the end of 2020, the more financially sound restaurant groups began to look for opportunities, especially if the real estate included outdoor dining.”

  • “Steinberg said the former Mexican Post restaurant at Three Parkway, which has a 5,000-square-foot patio, was suddenly on restaurateurs’ radar after having sat empty since November 2013. The site has multiple offers, he said. READ MORE

Gyms are finding different ways to reopen: “One fitness club franchisee plans to open a dozen new locations, while a national chain is selling digital memberships. A Pilates studio in Houston is requiring masks; a family-run gym in Indianapolis isn’t. America’s gyms are reopening to a markedly changed fitness world as coronavirus pandemic restrictions lift. Each business—and its customers—must decide how to navigate new workout habits and conflicting demands around Covid-19 safety protocols. Some people won’t exercise in a face covering; others will only frequent a gym with a mask mandate. Still others purchased pricey fitness machines for their homes and have spent months taking virtual classes.”

  • “Legions of independent gyms and studios have closed, crippled by state-mandated shutdowns.”

  • “Gym owners and industry experts say the fitness landscape is likely forever changed by the pandemic.”

  • “When the Covid-19 risk passes, they say, the business of fitness will increasingly become a mashup of bricks-and-mortar and online virtual offerings, much like the coronavirus-hastened evolution of retail, office work and education.” READ MORE



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The pandemic has ignited a housing boom that’s very different from the 2006 boom: “Anthony Lamacchia, a broker and owner of a real-estate company near Boston, entered the industry in 2004. Home buyers were trading up to bigger, more expensive houses after barely a year, he said. Many buyers paid small down payments, or none at all. When housing prices stopped rising, the market collapsed. By 2009, Mr. Lamacchia was working with clients desperate to dump the homes he had just helped them buy. Now, he said, housing demand in the Boston suburbs is stronger than he has ever seen. Lamacchia Realty reached $1 billion in sales last year for the first time.”

  • “Buyers have higher credit ratings these days. They are flusher and are putting down more cash up front. ‘On $1 million purchases, people are putting down $500,000,’ he said. ‘You didn’t see that before.’”

  • “The current housing boom is far more stable than the last one and poses fewer systemic risks, economists say. A downside: There are more barriers to entry, and it’s more difficult for buyers who aren’t already homeowners to make that first purchase.” READ MORE


Is your bank your friend or your enemy? Today at 3 ET, 21 Hats will host a webinar conversation on what business owners should expect from their banks and how they can better manage that relationship. The conversation will feature Ami Kassar, founder of Multifunding, Chris Myers, CEO of Colorado Lending Source, and Violet Alexandre, CRO of Bryllyant. Bring your own questions!

Register Here