High but dry: Post-pandemic cash flow worries small businesses as demand picks up
by Amy Lane
Marcie Earl’s Elk Rapids store returns orders for custom items like promotional pens and sports team t-shirts as Michigan leaves COVID-19 behind.
That is good news.
But with the business boom comes a challenge: Paying suppliers after the pandemic has drained cash flow.
“I don’t bill the customer until they have received the product and I know they are satisfied,” said Earl, owner of The Place Promotional Products and Apparel, which supplies merchandise for marketing and events. âWhen business picks up, you owe your suppliers more, that’s a good thing. But you have to get the payment from the customer. “
A $ 5,000 grant from the Regional Resiliency Program (RRP), a local fund that supports small businesses affected by the pandemic, helped bridge cash flow. The program, operated by Venture North Funding & Development, offers grants of up to $ 5,000 across the entire 10-county area of ââVenture North, including Antrim, Emmet and Charlevoix counties.
The grants have helped businesses survive and shrug off the effects of the pandemic. Earl, for example, saw customer orders for promotional products dry up last year, as events were canceled and budgets shrank. With orders now being picked up, the MSRP grant has helped her pay suppliers for goods while she waits for delivery and eventual payment from the customer.
“It helps immediately,” said Earl.
Earl’s scholarship is one of the most recent to be awarded under the RRP, which was launched last year with a grant of $ 200,000 from the Consumers Energy Foundation and more than $ 1 million in donations from energy companies, community foundations , Financial institutions and economic development organizations and others.
The program awarded grants to nearly 200 companies with nine or fewer employees last year, and the number has grown this year as additional rounds of grants were introduced.
Local partners in many counties have provided Venture North with support and funding to expand the size and reach of the RRP.
In Antrim County, the Bellaire Chamber Foundation raised $ 24,000, which was critical to making the county’s spring development happen, said Laura Galbraith, president of Venture North.
The money raised by the foundation was targeted at small businesses in the foundation’s geographic coverage area, including Bellaire, Alden, Central Lake and Mancelona. An additional $ 20,000 from Venture North and $ 3,000 from the Grand Traverse Regional Community Foundation were made available for use across Antrim, creating a $ 47,000 pot that was used in May in grants to 13 companies, including Earl’s , were awarded.
For the young foundation, only about 18 months old, there was a desire to help small businesses become community anchors, said Louise Wenzel, chairwoman of the foundation.
“We just want to make sure these people stay afloat,” she said. “It just feels so good to help the companies that in turn help our communities.”
The foundation raised money from individuals and companies, and also helped organize a team from Antrim County to review grant applications and make funding recommendations to Venture North. The nine-person team consisted of representatives from the Board of Trustees as well as from Central Lake, Ellsworth and Elk Rapids. They considered 22 applications for $ 104,500 – more than double the funds available.
In Emmet County, an initial grant round last December brought $ 64,250 in awards to 16 companies; Additional grants totaling $ 50,250 were awarded in June. The Petoskey-Harbor Springs Area Community Foundation helped capitalize on both rounds, of which Executive Director DJ Jones said the foundation thought early on how it could help small businesses through the pandemic as a not-for-profit organization. (You and other such foundations cannot donate directly to private entities such as corporations.)
However, Venture North was one avenue to support. The organization is both nonprofit and experienced in working with small businesses as a government certified community development financial institution that provides small business capital and resources for economic and community development.
âIt made perfect sense for us to work with them to reach that audience. We couldn’t have done it alone, âsaid Jones. “Some people might look at a community foundation and think, ‘Why are they getting involved in small businesses?'”
In the end, Jones said, “(i) It depends on what is charitable.”
“Our philosophy has always been that supporting economic development is charitable,” said Jones. âIt’s about community. A lively quality of life. “
Galbraith said Venture North is grateful for the resources and leadership of the community foundation, including referring people who are on the team to review Emmet County’s grant applications.
Emmet County’s first round included $ 50,000 in COVID-related reserve funds from the foundation, $ 10,000 from the Frey Foundation, and $ 4,250 from donor-recommended funds housed within the foundation and with individuals. Scholarships were awarded in December.
Julienne Tomatoes restaurant owner Julie Adams in Petoskey was among those who were grateful for the help.
Like others similarly affected by Governor Gretchen Whitmer’s orders to restrict or shut down businesses, Adams’ cafe closed in March last year. She said the restaurant didn’t open with reduced capacity until three months later, and while the takeaway and limited food cafe had a “good summer” it lost almost all of its catering season, which is 10-24%. of business.
And while income fell and menus and hours were reduced, expenses weren’t: the cost of groceries and supplies rose. Adams also raised pay for her dozen or so employees who she says “endured a lot”.
“All I keep encouraging is that we always put one foot in front of the other,” she said. “But it’s been something of a free fall for a year and a half.”
She said her $ 5,000 MSRP grant went into “daily functions” and helped pay for expenses. For a business owner who was used to giving to others in the Petoskey area, being the recipient of financial aid was something new.
âHere we are, always the ones who answer every call from the areaâ¦ and suddenly we cannot put ourselves in a position to help. And now I’m the one who receives, âshe said.
She had two customers write their personal checks and insisted that she accept the money.
“I am not; I’m not that person, âshe said. “I’m always the one who gives.”
Adams said the grant meant more than just the money. Amid the stress and negativity of having the local offer of help, “it just gives you a little bit of positivity and initiative to move on,” she said.
For Katie Boeckl, owner of Between the Covers bookstore in Harbor Springs, the store closure resulted in a shift to online sales and shipping and continued to feed an appetite for books that did not waver during the pandemic. The store decided not to fully reopen if it could have been last spring, but only by appointment and delivery to the curb.
“There were still so many unknowns, (it) had to be about the health and safety of our entire city, our customers and employees,” said BÃ¶ckl.
But when she moved in late last year, after a summer dip of around 80% and the cancellation of a three-day fall festival with books that brings lots of visitors to the area, Boeckl knew it was approaching its slowest season, January through April.
“It’s a little nerve-wracking every year, but this last year in particular would be more worrying,” she said.
She said the store had “requested everything we can to get us through this period” from the MSRP and elsewhere and covered basic operating costs.
The $ 5,000 MSRP grant was used for rent, supplies, wages, and other expenses that help with finances, but also, Boeckl said, backed her decision to remain largely closed until last May.
“It helped us survive as we got that blow to the bottom line,” she said, “because we decided that health and safety were more important.”
The RRP grant rounds continued in the region. In Charlevoix County, an application deadline for US $ 20,000 grants funded by Venture North ended in mid-June, pending application at press time.
And in Emmet County, the second round made grants of $ 15,000 from the Petoskey-Harbor Springs Area Foundation, $ 35,000 from Venture North, and $ 250 from a single donor to 12 companies in the county, including again Adams’ Julienne Tomatoes.
Adams said the money went into a new laptop, which had become a crucial part of its effective functioning, as well as improvements to the outdoor dining area, and she also planned to give employees another raise to show their importance to the operation to underline.
“It’s just clear to me, I can’t do it without her, and we’re under a lot of stress and strain every day,” said Adams. “I know many feel that this is over, but unfortunately we will feel the effects for a long time to come.”
Galbraith said many small businesses continue to be challenged, although there are positive signs of a rebound. Earl of The Place Promotional Products and Apparel said their EIA grant helped the company move forward.
“It was like that little lifeboat that I could get on to get through while business slowly turns,” she said. “I hope it will sail smoothly from here.”
Amy Lane is a freelance journalist and former reporter for Crain’s Detroit Business, where she covered business, state government, energy, and utilities for nearly 25 years.