KU Small Business Development Center discusses state, regional resources to help small businesses during pandemic
The KU Small Business Development Center (SBDC) is one of 13 Small Business Development Centers in Kansas and one of more than 1,000 SBDCs in the United States. The KU SBDC is a partnership among the U.S. Small Business Administration (SBA), the Kansas Department of Commerce, the KU School of Business and the Lawrence Chamber of Commerce.
The center serves Douglas, Franklin, Jefferson, Atchison, Leavenworth and Doniphan counties in Kansas, providing free one-to-one advising to small business owners, managers and prospective owners. During the COVID-19 pandemic, the center’s staff has been helping its clients and businesses in the region connect to relief programs and has been offering advice and training.
KU SBDC director Will Katz and KU SBDC business advisors Kristina Mease and Taylor LaRue provide guidance and resources for small business owners in Kansas and in the region during this time.
Read about general advice for small business owners in a Q&A on the School of Business website.
What kind of programs are available on the state level in Kansas?
LaRue: The state rolled out the HIRE Fund, the Hospitality Industry Relief Emergency Fund.
Katz: They allocated $5 million, and they were going to award $20,000 to 250 hospitality businesses across the state. This was massively oversubscribed. In the first 72 hours, they had 1,364 applicants. They kind of changed it a little bit. They said, “well, we’re going to award more businesses. We’re going to drop the award to $15,000, and that’ll allow us to award it to 330 businesses instead of 250.” Again, that left over 1,000 businesses, all with good applications, that couldn’t be served by that fund. It’s hard because most states have balanced budget amendments, and Kansas is no exception. Really with an incident like this, with an impact like this, the response almost has to be federal.
Mease: The [HIRE] funds have been exhausted. There could be an opportunity for it to be refunded, but again, that is very much up in the air.
What types of things are being implemented closer than at the federal or state levels that small businesses should be paying attention to?
Katz: Baldwin City put a 90-day deferral on all utility payments for businesses. Something like that is an example of a hyper-local response, and again, it may not sound like much, but if that’s $600 or $1,000 that a business gets to not have to pay over the next 90 days, it’s really important. I wouldn’t want to say that there’s nothing the state could be doing or nothing that the local folks could do, but anything that can be done at the state level or down pales in comparison to what the federal government has the power to do here.
LaRue: The Lawrence Restaurant Association started the Hospitality Workers Relief Fund that’s getting allocated.
Katz: That’s geared mostly toward restaurant workers who need specific assistance.
LaRue: The Lawrence Chamber of Commerce and Douglas County Community Foundation also are starting to raise funds.
If small business owners are able to, would you recommend that they put their economic impact payments toward their business expenses?
Will: If I talk to 600 different businesses, I’m going to give 600 different answers. It’s really an individual decision.
Mease: Behind every business are individuals. They’re people who have lives and families, and so I think really just evaluating: Ok, do you need this money to feed your family or to pay your rent? Or, are you in a position where you have the ability to already have that covered and you can invest that money into the business? It just depends on your particular case.
Katz: It’s also a self-definitional moment in leadership for these folks. The best piece of advice that I could give somebody is to be as consistent as possible in your decision-making style as you can be. Hopefully you’ve got a strong set of personal values, and whatever those values are, hopefully those values inform the way that you run your business. The real key is just consistency and values in leadership style.
Do you have advice specifically for owners who started a new business within the past year and may not have as much business experience or financial stability to fall back on?
Katz: In 2019, we worked with about 60 people who started businesses. So we see a lot of that. I will tell you that it’s a more difficult position for them to be in — if you think about the way that the EIDL loan is calculated, it’s based on 2019 revenues minus direct expenses. If you started in September or October of 2019, it’s just not a complete picture. Same with the PPP — they’re looking at 2019 payroll records, so your payroll records are going to be smaller and the amount you’ll be eligible for will be smaller. It’s tougher spot for new startups financially. As far as strategically for them, the advice doesn’t really change. It’s minimize cash flows out; maximize cash flows in. Get as many loans as you can. The newer the business is, the more of a challenge it is to find alternative sources for loans.
What services has the KU SBDC been providing to clients over the last few weeks, and have your services changed in content or volume?
LaRue: In terms of client relations, we’re still doing Zoom calls, phone calls, emails. The workload has become busier over the last month. We’re telling people that they can email us, they call us, they can set up a Zoom so we can talk face to face. We’re working a lot with recent clients, in addition to clients that we worked with a few years ago, and then also people that we’ve never heard from before, and we’ve been helping them to the best of our ability.
Mease: We are in part funded by the SBA, and they’ve put on lots of trainings for SBDC affiliates. One of the things that we all have taken pride in is that we have been staying as up-to-date on information as possible. The reason for that is that we have people who reach out to us often, asking questions, whether it’s existing clients or new people that have heard about us from elsewhere. Part of our role in all of this is being a support system or a trusted advisor, and how we do that is being knowledgeable about what’s going on but also being careful about when you should talk to your CPA or banker, your SBA loan officer if it’s something specific to that. We do the same things as we would if we were in the office, but it’s just focused in on a particular topic of what’s going on with the pandemic and how it’s affecting individuals. Being a support system is important to all of us in our every day.
Katz: In the last few weeks, we’ve been using social media a lot more, just because if we can put more things out there that people can see, it might actually reduce the number of personal phone calls and emails that we get, or speed up our response. So a little bit of an increase in social media content, definitely an increase in providing content for others. When we don’t hear from client for a long period of time and then we do, we use a term called reactivation. So we’ve had this shockingly high reactivation rate of people we worked with six or seven or eight years ago, 10 years ago in some cases. In days where I’ve tried to keep track of total email and phone contacts, in a one-on-one setting, we’re talking between about 30 and 45 different individual business owners per day. The volume is super high.
What resources, besides the KU SBDC, would you point small business owners toward?
Mease: I think the Lawrence Chamber of Commerce has done a really great job of posting content on their website and staying up-to-date on that. They also host biweekly webinars. One of the things that I’ve absolutely loved that I’ve seen during this pandemic is how collaborative the community has been, not only in Lawrence but Douglas County. We service six different counties in our region, and Franklin County is one of the counties. I’ve seen so much collaboration from a lot of leadership in the community, which has been really inspiring. Explore Lawrence has also been great. The Kansas Department of Labor’s Facebook page is another great place where people can find a lot of information.
Katz: Anybody that has a relationship with a bank should be checking in with that bank. Again, the banks are the administrators of that PPP loan. The banks are usually the ones that you go through for specific deferrals. So if you haven’t had a nice long conversation with a banker, you should.
