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What the Bill Means for Businesses
Today’s highlights: The $1.9 trillion stimulus package passes the Senate. Businesses find new customers in the suburbs. And some people are still opening restaurants.
The Senate passed a $1.9 trillion stimulus package (without the minimum wage hike): “In the marathon session — known as a vote-a-rama and for which more than 800 amendments were drafted — Senate Democrats maneuvered through a series of politically tricky amendments that Republicans wanted to attach to a coronavirus relief package as lawmakers pressed forward with a budget plan that includes Mr. Biden’s economic aid proposal. The resolution will go to the House, where Democrats do not require Republican support to approve it.”
“The Senate, by unanimous vote, agreed to a motion from Senators Marco Rubio and Rick Scott, both Republicans of Florida, to block tax increases on small businesses during the pandemic.”
“Lawmakers also backed a measure from Senator Roger Wicker, Republican of Mississippi, and Senator Kyrsten Sinema, Democrat of Arizona, to establish a fund to provide grants to food and drinking establishments affected by the coronavirus crisis.”
“Lawmakers dealt a significant blow to Mr. Biden’s plan by dismissing a major tenet: a measure that would raise the federal minimum wage to $15 an hour.” READ MORE
Senator Klobuchar introduced an antitrust bill: “The senator introduced legislation that would bar companies that dominate their sectors from making acquisitions unless they can prove their deals don’t ‘create an appreciable risk of materially lessening competition,’ according to a draft from Ms. Klobuchar’s office. Now, the burden is on the government to prove a merger substantially lessens competition.”
“‘We have an increasing monopoly problem, really headlined by what is happening with tech’ but also extending across the economy, Ms. Klobuchar said.”
“The App Association, a trade group representing small and midsize software companies, told the Senate antitrust panel last year that restricting large firms could end up hurting smaller players.”
“‘When a large company with deep pockets gets told by a regulator not to do certain things, they build walls, they don’t build bridges,’ said Morgan Reed, president of the association, at a March 2020 hearing.” READ MORE
THE 21 HATS CONVERSATION
At his firm, Permanent Equity, Brent Beshore takes an unusual approach to private equity. He invests in businesses with no timeline to sell them. He doesn't force those businesses to take on debt. He's happy to keep the leadership team in place. What is he thinking? Join our webinar conversation Tuesday at 3 ET to find out.
Walmart will offer small businesses another advertising option: Walmart “will use Thunder’s technology to launch a self-service tool that helps advertisers make and buy numerous versions of display ads targeting different kinds of consumers on its properties.”
“A skin care company could use the tool to create versions of an ad with models of different ages, for example, then use the technology to determine which performs best. The new self-serve display ad tool will launch later this year, the company said.”
[Walmart is] chasing powerful competitors with large head starts. Amazon.com, the third-largest seller of digital advertising afterAlphabet’s Google and Facebook, generated roughly $8 billion in sales in the fourth quarter of 2020 in the segment that primarily includes advertising revenue.” READ MORE
Businesses are finding new customers in the suburbs: “Small-business owners say they are finding a way forward, through customers who are suddenly spending a lot more time — and money — in the communities where they live.”
“Mike Fitzsimmons, owner of Westwood Art Gallery and secretary for the Westwood Chamber of Commerce in Bergen County, N.J., has seen an increased demand in artwork framing services.”
“Customers are hoping to make their living spaces more attractive and comfortable, Mr. Fitzsimmons said, and some now have the extra money, time and impetus to invest in such changes.”
“‘They looked at the same four walls for four months,’ Mr. Fitzsimmons said of his customers.” READ MORE
Some people are still opening restaurants: “Data from Yelp shows that new restaurant and other food business openings in 2020 were down just 16 percent from 2019. And they were only down 4 percent in the fourth quarter relative to the year-ago period. Meaning some brave people are pushing ahead despite the current risks.”
“Communion opened in Seattle's historically black Central District on December 5, 2020, a few weeks after Washington state banned indoor dining and discouraged large at-home holiday gatherings.”
“It's the first restaurant for owners Chef Kristi Brown and her son, Damon Bomar. They also run a catering company together called That Brown Girl Cooks!.”
“They are now allowed to operate indoor dining at 25 percent capacity, but Bomar said they plan to wait another month or so before hosting in-person dinners since their takeout business is doing well.” READ MORE
Although Seattle was the first city in the U.S. to suffer a Covid outbreak, its startup community thrived in 2020: “Seattle startups brought in $3.2 billion in venture capital through the first three quarters of 2020, according to Pitchbook, putting the city on track to easily break its previous high of $3.6 billion in 2019. Many were in fields like health care, A.I., enterprise software, and gaming--industries that are showing no signs of slowing down as the calendar turns to 2021. For example, telemedicine platform 98Point6, which lets patients talk with doctors via text chat, grew from 350,000 users to 3 million, according to founder and CEO Robbie Cape.”
“There are a ton of tech workers in the city, thanks in no small part to Amazon and Microsoft, which draw talent from all over the world and now employ a combined 100,000 people in the area.”
Shelf Engine, which uses A.I. and algorithms to help grocers and food companies limit their waste, last year raised its headcount from 25 employees to 140 as revenues soared. About 10 percent of those workers came from outside the Seattle area, people who will remain remote even when the rest of their co-workers return to the office.
"’The search is very hard for the quality of people we're looking for,’ says founder and CEO Stefan Kalb. ‘We've realized the benefits of breaking free of geographic constraints.’” READ MORE
The Biden Administration is delaying a rule that would have eliminated the H-1B lottery: “The delay offers some long-awaited certainty to businesses looking to sponsor foreign professionals for the visas this year. The Trump administration, which finalized the rule in January, said the visa program artificially depressed wages by allowing employers to hire foreign workers at lower salaries, and that awarding visas to foreign professionals who would earn the highest salaries in their fields would create upward pressure on the market overall. The administration also tightened issuance of the visas, rejecting 15.1 percent of applications in 2019 compared with 6.1 percent in 2016, according to U.S. Citizenship and Immigration Services.”
“The rule was criticized by business groups and other immigration advocates.” READ MORE
Ford is expected to cut production 20 percent because of the computer-chip shortage: “Ford said Thursday it plans to cut production of its F-150 pickup truck—the nation’s top-selling vehicle and the company’s biggest moneymaker—because of the shortage, a day after confirming a hit to output of several sport-utility vehicles. Losses of vehicle production globally in the first and second quarters could trim $1 billion to $2.5 billion from its pretax bottom line this year, executives warned while discussing fourth-quarter earnings. These latest actions mark a significant escalation in the chip-shortage problem that has disrupted the auto sector and other industries in recent weeks.”
“The truck is the source of most of Ford’s global profit.” READ MORE
THE 21 HATS PODCAST
Episode 47: Optimism in D Minor: This week, William Vanderbloemen tells Karen Clark Cole and Dana White that he’s cautiously optimistic about 2021 because his clients are cautiously optimistic and because he’s expecting lots of turnover as the pandemic recedes. William explains how he uses a “Frankenstein” customer relations system to track what his clients read on his website and to sense when those clients are getting ready to make a hire. The system then prompts the Vanderbloemen team to give the client a call. We also talk about why Karen is tired of being a best-kept secret and how Dana handles customers who have to be fired. Plus: there’s a new tax credit you should know about that William calls “pretty incredible” but that seems to be getting lost in the PPP shuffle.
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