We discussed this on our weekly live recording recently but I felt it was important enough to cover it again. Despite the anticipated second round of PPP funding, many small businesses are not expected to survive the winter months (Mercado, 2020). Even though PPP may forgive the loans entirely or partially, but potentially impact the business owner’s tax situation negatively (Colvin, 2020), this funding is not anticipated to cover everything that is needed to be covered and, perhaps worst of all, this adversely impacts the restaurant/bar industry (Mercado, 2020), which is fundamental to our overall economy.
We all know that restaurants are a very important part of our whole economy but it is far more important than what many believe. To highlight this importance, review the statistics below as they have been retrieved from the National Restaurant Association.
- 1M+ restaurants in the US,
- 6M restaurant industry employees (about 10% of the American workforce),
- 90% of restaurants have fewer than 50 employees
- The number of middle class jobs in the restaurant industry grew 84% between 2010-2018 which was about 3 times faster than the overall economy
- 3-5% profit margin is considered “normal”
(2020, National Statistics)
How is the restaurant industry expected to function at 50%, 25%, and in some areas 0% capacity? It simply cannot. Moreover, what happens to our economy when the restaurant industry suffers to such a great extent? The whole economy suffers which means the American people suffer – the answer does not lie in another round of PPP but rather opening the economy back up. It is time to open the economy and give small businesses a fighting chance to survive. Small business owners continually beat the odds but it past time that the government stops fighting against them and starts fighting with them – it is time to end the lockdowns and capacity limitations.
With that being said, small business owners don’t spend time dwelling on that which cannot be controlled, so where do we go from here? First and foremost, buy local – any purchase you make, see if you can make it from a small, local business near you. Those are the businesses where your purchase will have the greatest impact, those are the businesses where your purchase helps a little child take music lessons, and those are the businesses that help others achieve their American Dream. Buy local and support small businesses near you!
John M. Beaman
President of The McGraw Council Membership, Inc.
- National statistics. National Restaurant Association. Restaurant.org. Retrieved from National Statistics | National Restaurant Association
Colvin, G. (2020). The IRS effectively canceled the tax break that made the PPP loans so valuable. Fortune. Fortune.com. Retrieved from The IRS effectively canceled the tax break that made PPP loans so valuable | Fortune
Mercado, D. (2020). Even amid new Covid relief efforts, a bleak winter is ahead for small businesses. CNBC. Cnbc.com. Retrieved from Amid Covid relief efforts, bleak winter ahead for small businesses (cnbc.com)