For Businesses, Uncertainty and Fatigue
Established and start-up companies alike face months full of unknowns. Changing messages from civic leaders aren’t helping.
by jesse fox mayshark • April 3, 2020
like all restaurants that are still open, Dead End BBQ has converted to strictly pick-up orders.
For Knoxville architect and restaurant owner George Ewart, the economic effects of the coronavirus pandemic are a double whammy.
Federal aid for small businesses is available starting today.
His architecture firm has heard from clients seeking to delay or halt projects in the works until they have a better sense of the duration and depth of the slowdown. And Dead-End BBQ, his popular Sutherland Avenue eatery, has had to lay off most of its staff and convert to a takeout-only model.
“We got a five-hour notice that we had to shut down our dining room,” Ewart said during a webinar Wednesday organized by Ackermann Marketing & PR. “You’re in there and you’re prepping food for the day and all of a sudden somebody comes out and says, ‘You’ve got to close at 8 o’clock, you’re done.’”
The sudden shifts in rules and the new unpredictability of life from day to day was a repeated theme of business owners and others in the webinar, which was organized by Ackermann Vice President Tommy Smith, who is also a Knoxville City Councilman.
“There were commonalities from a number of different clients in different industries, and they all kind of had ripple effects that ran into one another,” Smith said in an interview, explaining the impetus for the online meeting. (Three of the six participants were Ackermann clients.)
Haseeb Qureshi, a Knoxville lawyer who works with many start-up companies (including Compass) and is an instructor at the University of Tennessee’s Haslam College of Business, said in a separate interview that the uncertainty can be crippling for businesses.
“‘Do we have enough money to pay our bills?’ That’s obviously the number one thing we’re hearing right,” Qureshi said. “The next thing we’re hearing is that all of these people who had plans to grow, and even some of them to franchise, they don’t know. Can they still continue on?”
State unemployment figures released Thursday showed the severity of the impact to date. There were 94,492 new jobless claims filed for the week ending March 28, up from 39,096 for the week ending March 21, and a more seasonally normal 2,702 for the week ending March 14. The numbers weren’t broken out by county, but 20,025 were filed in the 15-county East Tennessee region surrounding Knoxville.
But both Qureshi and the participants in the Wednesday webinar emphasized the importance of thinking beyond the immediate crisis to what comes next. As difficult as the next few months are likely to be for many businesses, decisions made now will affect how well they are able to adapt to whatever more stable environment eventually emerges.
“We’re spending a lot of time with our clients right now just kind of helping them rework forecasts,” said Billy Caroll, CEO of SmartBank, which has 29 branches in Tennessee, Alabama and Florida. “What does this thing look like? Is it a V-shaped recovery or a U-shaped recovery, and really trying to run different scenarios.”
A Lack of Clarity
Ewart said the most difficult thing about the past few weeks has been making business decisions in a landscape that keeps shifting and often provides multiple messages at the same time.
“It changes hourly,” Ewart said. “You’ve got a press conference from the governor, you’ve got a press conference from the city mayor, a press conference from the county mayor, a press conference from the president of the United States. To me, if we had one common direction on stuff, it would make it a lot easier. Because now you're getting pulled in so many different directions.”
Mary Kellogg, president and CEO of the Titanic Museum attraction in Pigeon Forge, agreed. “The lack of consistent information is the most frustrating part for all of us as business leaders,” she said.
Patricia Robledo, business liaison for the City of Knoxville, said she’s heard similar complaints and confusion from local business owners. She can provide help in understanding the city’s own emergency regulations, but she has to refer them elsewhere for county, state or federal questions.
“The layers of the different governments is really hard for people to manage,” Robledo said.
The seemingly constant shifts continued through yesterday, as Gov. Bill Lee enacted a statewide “Stay at home” order after a week of resisting mounting calls for it.
Qureshi said the lack of clarity extends to the governmental aid efforts that have promised relief to struggling businesses. He has spent the last week studying the federal CARES relief bill to understand its various small business provisions, and in conversations with banks and federal agencies he has found they are still seeking guidance on exactly how it will work.
“I called the Department of Labor this morning, the U.S. Department of Labor,” Qureshi said. “And then I got redirected to the assistant director of ETA, which is the Employment and Training Administration. I had to leave a voicemail, but everyone I talked to along the way didn't know anything about how the pandemic unemployment assistance was working.”
The good news, he said, is that the relief includes hundreds of billions in loans and assistance to small businesses. Most prominent is the Paycheck Protection Program (PPP), a $349 billion pot of money to be loaned out to help small businesses continue to pay their employees and maintain their operations.
“I think a lot of people still are very hopeful that this will go away fast enough that they can recover.” – Patricia Robledo, business liaison, City of Knoxville
Expenses covered by PPP loans are forgivable for up to eight weeks of operations after a business receives the funds. Qualified SBA lenders are supposed to begin accepting applications for the loans today, although Qureshi said he expects some hiccups as banks that are still figuring out the program get swamped with requests. He recommends the website of the U.S. Chamber of Commerce for a good one-stop guide to the program.
“My thing is, can we whip up our community — Knoxville, East Tennessee and Tennessee — to take advantage of what’s out there,” he said. “So that we’re strong and that we’re thriving.”
To that end, he has posted a series of videos on YouTube explaining the provisions of the CARES Act. He’s also hoping to help nonprofit organizations take advantage of the funding, and is hosting a Facebook Live webinar on it at 1:30 p.m. today via the Alliance for Better Nonprofits.
At the Knoxville Entrepreneur Center, which closed its doors to public access on March 16 but is continuing its services remotely, Executive Director Jim Biggs said he’s heard the same questions and frustrations from business owners as everyone else.
“There’s so much coming at people from every direction,” he said. “People are trying to take in and assimilate as much as possible as quickly as possible, but you’re also seeing some fatigue there.”
KEC has moved some of its regular events online, such as its eight-week Co.Starters program for aspiring start-ups and its Etsy Craft Entrepreneurship program. More is coming over the next few weeks to try to help business owners stay connected with each other, with mentors and with potential investors.
For now businesses are most focused on getting through the next few months. In many cases, that has meant learning how to work remotely and reconfiguring their services, to the extent they can still provide them at all.
Kellogg said the Titanic Museum decided early on to keep its whole staff on payroll while the attraction is closed. “There’s too much invested in these employees,” she said. The company has established clear lines of communication so that everyone is in touch with designated managers. Employees have also set up a Facebook group to be able to talk to each other directly.
The museum is also holding regular sales meetings to plan for the eventual return to operations, although Kellogg said she didn’t know when that would be. For Sevier County attractions, she said, there’s one primary bellwether.
“My feeling is that Dollywood would dictate when that opening would be for tourism, and we're closely in contact with them,” Kellogg said. “Once they determine when they open, that will probably be a date that we will follow.”
Robledo said she has heard a lot of stress and anxiety from business owners, but not despair.
“I think a lot of people still are very hopeful that this will go away fast enough that they can recover,” she said.
Qureshi said he thinks that’s the right attitude for business owners. He said he thinks any level of activity will help businesses keep momentum and build goodwill with customers and clients.
“The unknown is so scary that some business owners are willing to shut down, because that brings clarity, instead of fighting through the uncertainty and figuring out the opportunity,” he said. “The business owners, small or big, that are just fighting through it because they’ve got that mentality, they’re going to get all this brand loyalty and they’re going to figure this out.”
Biggs said some things, like finding investors, are going to be very difficult for businesses for the near future. “Seed funding, angel funding has just evaporated at this point,” he said. “So folks who are trying to start something new, unless you have access to friends and family money, are really looking at some lean times.”
But he agreed that there are also opportunities in the sudden shifts in how everyone is doing business.
“You’re seeing people who are being innovative and who are being resilient and are trying to figure out how to make things work in a rapidly changing world,” Biggs said. “They’re doing what entrepreneurs do.”
CORRECTION: This story has been corrected to note that three of the six participants in the Ackermann webinar were Ackermann clients. It previously said all of them were.