There’s a Lot of Money Looking for Small Businesses
The EPA and the Treasury department both have billions to share, and much of it will go to small businesses. You might want to check it out.
Good Morning!
Here are today’s highlights:
Lou Mosca says too many owners fail to take training seriously.
The founders who run startups in California are not happy about the “right to disconnect” legislation.
David Chang wants to trademark the flavor, “chili crunch.” Does that make him a bully?
MANAGEMENT
In this week’s video, Lou Mosca talks about why business owners should take training seriously: We're in the midst of election season, and we often hear about the significance of small businesses, only to be quickly forgotten after election day. This is akin to how some business leaders approach training: enthusiastically talked about but seldom prioritized. For businesses to truly foster growth and offer meaningful opportunities for their teams, it's imperative to develop a formalized training agenda. Making training a fundamental part of our business culture by setting aside regular time for it is vital. Training is especially important for small businesses because most operate with fewer than 10 employees. That makes the impact of training much more significant. Want to talk about it with me? CONNECT WITH LOU ON LINKEDIN
FINANCE
The EPA is releasing $20 billion in “green bank” grants: “When Marcus Jones and his business partner, Akunna Olumba, set out to open a pizzeria in Detroit, they spoke with banks about their green vision: solar panels on the roof, an energy-efficient tankless water heater and a rooftop system to capture stormwater. ‘The lenders thought we were crazy,’ Mr. Jones said. Traditional banks were skeptical that such investments would yield a return, and few had ever issued loans for clean energy or efficiency measures. They told the restaurateurs that it simply was not done. Instead, the pair connected with a so-called green bank, one of a growing number of entities that lend money to businesses and individuals for equipment or technology that reduces the pollution driving climate change.”
“The movement will get a $20 billion infusion from the Biden administration on Thursday in what Vice President Kamala Harris calls ‘the largest investment in financing for community-based climate projects in our nation’s history.’”
“The Environmental Protection Agency plans to award grants ranging from $500 million to $6.9 billion to eight nonprofits. The organizations will in turn use the money to offer loans to businesses, homeowners, and others to spur clean energy across the country, particularly in low-income neighborhoods. Loans could be for something as small as helping one family purchase an electric induction stove or as ambitious as helping to build energy-efficient low-income housing.” READ MORE
The Treasury Department is releasing $10 billion as part of the SSBCI: “More than $1 billion in funding has already flowed to small businesses in direct investments, loan guarantees, and other programs — but a lot more is on the way. Those funds are from the Treasury Department's State Small Business Credit Initiative, authorized by the American Rescue Plan Act of 2021, which allocated $10 billion for states, territories and tribal governments to set up their own programs to help small businesses access capital. That money has been slowly flowing to loan programs and credit-enhancement initiatives, as well as venture-fund programs, to target early-stage businesses. It's part of a plan to leverage that $10 billion into $100 billion.”
“But it has taken a while for the program to ramp up. At the end of 2023, about $1.1 billion had been deployed, according to a report recently released by the Treasury Department. All told, the Treasury Department has already allocated about $8.2 billion across the country to state and local governments, and disbursed about $2.6 billion to fund a host of financing and capital programs.”
“Brian Pifer, vice president of research and insights at the Small Business Majority — which is working to ensure the money goes toward small businesses — said the program is harder for business owners to get a handle on because by the time it filters through state and local governments, it might not necessarily be called SSBCI funding or be recognized as part of the program.”
“Small-business owners can look up their own state and local programs to find out if they qualify for funding. Business owners should also reach out to their local CDFI, small-business development center, or other business association to find out more information, Pifer said. The SSBCI program is set to run through 2030 at least, Pifer said. But the $10 billion in funds has the potential to reach a large number of businesses.” READ MORE
THE ECONOMY
Job growth was strong again in March: “U.S. employers added a seasonally adjusted 303,000 jobs in March, the Labor Department reported on Friday, significantly more than the 200,000 economists expected. The unemployment rate slipped to 3.8 percent, versus February’s 3.9 percent, in line with expectations. … The labor market has continued to add jobs over the past year despite high interest rates. At the same time, the unemployment rate has drifted up and wage gains have cooled. In March of last year, the unemployment rate was 3.5 percent. Those dynamics have defied the conventional wisdom that, for inflation to cool, job creation would need to dramatically slow down.”
“Lately many economists and even Fed officials have come to believe that, in part as a result of immigration, the supply of available workers has increased. If that is right, the number of jobs can grow faster. Supply alone isn’t enough to generate job gains, however; there has to be demand.”
“At the moment, it still looks as if there is plenty of that. Layoff activity remains low, and the number of unfilled jobs is high, with the Labor Department reporting earlier this week that there were 8.8 million job openings as of the end of February.” READ MORE
REGULATION
In California, startup bosses are not happy about the “right to disconnect” bill: “San Francisco tech leaders are taking to the digital barricades over a proposed California law that would make it illegal for your boss to contact you after work hours, saying it would hamstring the startups that drive the city’s economy. Assembly member Matt Haney, who represents San Francisco, introduced AB 2751, which introduces a so-called ‘right to disconnect’ by ignoring calls, emails, texts, and Slack messages sent after agreed-upon working hours. Messages for emergencies or scheduling reasons would be exempt from the law.”
“Y Combinator co-founder Paul Graham tweeted a bit of an ode to late-night work, writing, ‘Some of the very best work is done late at night. Not just at startups, but in research too. That's when you can work on hard problems without distractions. If you looked at emails reporting important breakthroughs, a surprisingly large number would have been sent after hours.”
“One of the strains of criticism from the tech community is the typical complaint of the over-legislation and over-regulation of an industry that has been a major engine of wealth creation and lifestyle enhancement. As Founder Fund vice president Mike Solana posted, ‘California, in its ongoing effort to destroy itself, is once again trying to ban startups.’”
“Haney argues the law would actually make California’s labor market more competitive because it would bring the state in line with more than a dozen countries that have introduced a right to disconnect and guard against burn out or other mental and physical impacts from overwork.” READ MORE
INTELLECTUAL PROPERTY
Is David Chang a trademark bully? “Across the U.S., a crunchy, crispy chili oil is being drizzled over dumplings, noodles, eggs, pizza – even ice cream. Once an almost secret sauce, this deep red condiment made with bits of dry chilis, crispy fried garlic, and often with sesame seeds and Sichuan pepper, has its roots in China. Now dozens of brands produce versions as this umami bomb goes mainstream. But all is not well in the condiments aisle. Momofuku, the food empire founded by celebrity chef David Chang, is attempting to seize control of the market – or at least the name. The company has sent cease-and-desist letters to companies using the term ‘chili crunch’ and ‘chile crunch’ on their condiment labels and is trying to trademark ‘chili crunch’ with the U.S. Patent and Trademark Office.”
“Michelle Tew, founder of the Malaysian food brand Homiah, based in New York City, is one of the letter recipients. It states that Momofuku is the ‘ … owner of all trademark rights … ‘ for ‘chile crunch’ and ‘chili crunch’ (two different spellings) and that her product, Homiah Sambal Chili Crunch, is a trademark infringement.”
“Tew said her chili crunch is based on her Malaysian family’s recipe, where she grew up. Momofuku is concerned that consumers might confuse a jar of Homiah Sambal Chili Crunch, which has a colorful floral motif paper label, with a jar of Momofuku Chili Crunch, which is minimalist with a hand-drawn font and no paper label. Homiah has 90 days to cease the use of the ‘chili crunch trademark.’”
“As word spread of Momofuku’s cease-and-desist letters among food entrepreneurs making the chili condiment, reactions ranged from fear and annoyance, to disappointment and astonishment at the gall. The company did not return requests for comment. Tew described receiving the letter as ‘a punch in the gut.’” READ MORE
FEATURE
America’s latest export to Pakistan? The Philadelphia cheesesteak: “[Mazhar] Hussain has worked at some of the most high-profile restaurants in Lahore — Monal, Tuscany Courtyard, Chaayé Khana and Café Aylanto, among others — covering a wide range of cuisines. His experience at Philly’s Steak Sandwich, though, has been unique. It’s a smaller restaurant than those, he says, and the guests come from all walks of life. The one thing that connects them: ‘The steak sandwich is extremely popular with everyone.’”
“In the past year, Philly’s Steak Sandwich has been covered widely in both English and Urdu media. The shop’s general manager, Adil Mehmood — it was his relative from Philly who shared the video of the cheesesteak with the shop’s chef — has appeared on television, highlighting plans to expand the franchise to other parts of the 13-million-resident city.” READ MORE
THE 21 HATS PODCAST
I Took My Eye Off the Numbers: This week, in episode 190, Jay Goltz tells Shawn Busse and Jaci Russo that, while he’s always been good with numbers, he’s never really enjoyed tracking his finances. It’s not what drove him to start a business, and over time, he stopped paying close attention. But now, after seeing his inventory levels and some big expenses get out of control, he’s diving back into the numbers and pretty much serving as his own chief financial officer, something he says he should have been doing all along.
Plus: Shawn explains how one book and a specialized accounting firm and a monthly routine have gotten him comfortable with his numbers. And Jaci says it took years for her to learn to ignore the accountants who always gave her the same advice: Cut expenses. Instead, she tells us, “We've spent the past probably eight years really right-sizing what we charge. And now I feel like I can breathe.”
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren