I Will Be Here

Paul Downs explains his New Year’s resolution. Carey Smith explains what he calls the AFH model of investing. And the latest relief package has stuff even for businesses that don't qualify for PPP II.


Episode 45: I Will Be Here: This week, Paul Downs and Jay Goltz talk about their New Year’s resolutions. Here’s Paul’s: “My New Year's resolution is that we will be open on December 31st, 2021. And I don't know whether I'll have the same number of employees, but we will be open. I will be here.” And here’s Jay’s: “My New Year's resolution is, I'm not gonna do anything stupid this year. So far, so good.” Paul and Jay also talk about Paul’s disappearing backlog, each of their plans for PPP Round II, Jay’s efforts to lure one of his sons into his business, and—responding to a listener question—how they handle business and personal expenses. “I think we have to stop recording right here,” says Paul.

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The Paycheck Protection Program is kicking into gear: “Most second-time borrowers can take a maximum loan amount of 2.5 times their average monthly 2019 or 2020 payroll costs, up to $2 million. Firms in the accommodation and food services industries can borrow up to 3.5 times their average monthly payroll costs for 2019 or 2020. Those companies are also subject to a $2 million cap.”

  • “What small businesses may not know is that banks could have their own expectations when the time comes to apply for more money.”

  • “Some lenders are also nudging their clients toward having their first round of PPP loans forgiven before allowing them to apply for a second round of funding—even though the SBA doesn’t require this.” READ MORE

Ami Kassar says that even if you don’t qualify for the second round of PPP, there may be something for you in the latest relief package: “The new relief legislation includes incredible SBA benefits that you can use to refinance existing debt at a discount, or buy a business or invest in your current one with no fees and six months of payment relief up to $9,000 a month.”

  • “Want to know more? Ami’s giving a webinar on the new SBA programs Wednesday at 3 ET.” REGISTER HERE

Carey Smith, who built and sold Big Ass Fans for $500 million, says his investment firm, Unorthodox Ventures, has developed a new investing model, the AFH Model: “Our investment firm has talked with scores of entrepreneurs, and they generally need far less money than they think they do, and far less than what VCs are willing to give them. These days, landing an investment is relatively easy, given the amount of money sloshing around. But, just as important as the money, if not more so, is guidance from people who have actually built a business from scratch, people who've been down the road—and made all the wrong turns and know the dead ends. People who can direct them like the Waze app to where they want to go. They need, in other words, actual f--ing help.”

  • “Rather than hand over a sack of money in return for a piece of a pipe dream, the AFH model supports a business until it is breaking even.”

  • “With AFH, entrepreneurs are able to focus less on the money and more on the business, vastly improving their likelihood of success.” READ MORE


Retail sales fell in December for the third straight month: “Retail sales fell 0.7 percent last month, the Commerce Department said on Friday, as the economic recovery showed signs of stalling and virus cases surged across the country, prompting shoppers to avoid stores amid a new wave of restrictions. For the second straight month, the drop was worse than what most economists had predicted, showing that the deterioration of the broader economy in the final quarter of 2020 was deeper than expected.”

  • “‘Grim’ was how Ian Shepherdson, the chief economist at Pantheon Macroeconomics, described December’s retail sales in a research note on Friday.” READ MORE


We asked Morning Report readers to tell us what they’ve learned about pricing: “I never argue,” Judy Katz wrote. “I simply say, ‘Well, a Timex tells time, and a Rolex tells time. If you truly believe you are the Rolex, and show confidence in what you can deliver, you will discover that most people will pay your higher price!’”



A British court has ruled that insurance companies must pay business-interruption claims: “The country’s highest court unanimously rejected insurers’ appeals, clearing the way for … hundreds of thousands of other small-business owners in Britain to receive insurance payouts for business interruption claims from the pandemic. The Financial Conduct Authority, Britain’s financial services regulator, brought the legal test case on behalf of policyholders to the country’s highest courts to try to quickly resolve the issue. The Supreme Court ruling, which is legally binding for eight insurers involved in the case, is expected to affect 370,000 businesses holding 700 types of policies issued by 60 insurers.” READ MORE


News startup Axios is introducing a communications platform targeting businesses: “The company next month will launch AxiosHQ, a communications platform that will enable businesses to update their employees—including through internal newsletters—in Axios’s just-the-facts, bullet-point style. The software tool, which Axios said would cost at least $10,000 a year depending on a customer’s size, is the first paid-subscription product launched by the digital-news startup.”

  • “Subscribers to the platform have the option to add a service that allows them to tap a team of editors—separate from Axios’s news division—for writing tips, Axios co-founder and President Roy Schwartz said.” READ MORE


Bird, a boutique credited with creating the Brooklyn Look and selling real clothes for real people, has shut down: “The aesthetic was relaxed but ‘interesting,’ a rebellion against the stiletto-stacked closets of Manhattan at the time. Bird women did not go to a meatpacking district club to be seen. They went to the farmer’s market — or years later a women-only co-working space. The Swedish clogs and printed smocks they wore while commuting were just an extension of [owner Jennifer] Mankins’ main fashion prerequisite: wearability. ‘I need to be able to live my life, not constrained by my look,’ she said.”

  • “Even with a PPP loan and decent web sales, Ms. Mankins, 44, said it was obvious after the holiday season that people weren’t ready to come back to her brick-and-mortar stores, where sales were down by 80 to 90 percent from previous years.” READ MORE


In Boston, the restaurant where restaurant people go to eat is trying to hang on: “A year ago, there was one place in Boston equally beloved by the likes of James Beard award-winning chefs and the ravenous, rowdy masses spilling out of the Royale. And that was in the dowdy basement of 4 Tyler St., home to the crown jewel of Chinatown’s late-night dining scene: Peach Farm. Well past midnight on the weekends, the two groups collided in this crowded space. Overburdened Lazy Susans spun like carousels. Chopsticks dive-bombed plates of chicken gizzards and vermicelli noodles. Line cooks from the city’s top restaurants waltzed into the kitchen to request off-menu delicacies. Upon order, a colossal live king crab was plopped onto a dining table where it danced briefly among the throngs of Tsingtao beer bottles.”

  • “Time moves so slow, but the costs don’t get any lower,” Peach Farm owner Tom Leung said on a recent Thursday night. A whole hour passed without a diner or a takeout order.

  • “‘It’s bleak. We’re very close to dying,’ admitted a usually cheery Leung with a glance around the room.” READ MORE


In her mid-50s, Debra Ivory cashed out retirement savings to buy a restaurant, revamping the menu with family recipes: “When you opened the door to George’s Happy Hog Bar-B-Q in Oklahoma City, the aroma of pecan-smoked meat would waft out, followed by a welcome from the owner, Debra Ivory: ‘Hey Baby!’ ‘Hey Sweetie!’ ‘Hey Darling!’ Ms. Ivory and her son, Stephen Ivory, a former amateur boxer with a brief professional career, bought the restaurant in 2012. Under the Ivorys it grew in popularity, attracting legislators from the nearby State Capitol as well as travelers passing through on Interstate 40; George’s served about 160 customers a day. Ms. Ivory knew by heart what most regulars wanted.”

  • “Ms. Ivory died on Dec. 13 at 62 at her home in the city. Her son said the cause was complications of the coronavirus.” READ MORE