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Small Business, Covid-19 And Retirement - Forbes

Small Business, Covid-19 And Retirement - Forbes

Small Business, Covid-19 And Retirement - Forbes

Posted: 24 Jul 2020 08:39 AM PDT

Most of us have saved some money, small amounts when young, more as we get older. The big goal is to prepare for retirement and to have access to funds along the way. Historically, our local bank provided savings accounts that paid interest, a share of the bank's earnings, in exchange for the use of our money. Unfortunately, in recent years interest rates have been so low on such deposits that interest payments have become an ineffective way to grow savings. This has turned us to financial markets, such as the 401(k) which allows investing our savings in stocks, bonds, and other assets.

There is one group of citizens for whom this is not so much the case – the small business owner. Most small businesses get their start using their own savings along with the help of friends and relatives. In a study of about 3,000 new business starts (18 months old or less), 75% of the owners used personal savings to start the firm, one-quarter of them financed 100% of the start with their savings.[1] That's a significant, personal investment! Thirty percent received funds from friends and relatives, and 40% borrowed money from the banks.

In an NFIB study of its member firms, 42% of small business owners with less than 250 employees planned to sell their firms prior to or at retirement, turning their very illiquid asset into a source of retirement finance.[2] Another 29% planned to pass the business on to heirs and 22% have no plan to close or sell, probably expecting to continue to have a share of the business earnings.

The Covid-19 containment policies have seriously depressed the economy. Unemployment rates have hit record high levels, but so has the stock market. Consumers who saw their financial investments lose 20 to 30% of their values over the past few months have now seen that value restored as the stock market hits new highs.

Unfortunately, that is not true for the thousands of small business owners who had invested their life savings not in stocks, but in their business operations that produced goods and services and provided millions of jobs for others.

Not directly related to asset values and retirement, it should be noted that most small businesses create jobs, jobs that are lost when many had to shut down. Over half of these firms provided a job for 10 or more workers, jobs lost at least temporarily, some permanently. Some of these businesses will re-start, others will shut their doors for good. The health crisis will certainly alter the small business sector and the prospect for retirement for many.

[1] New Business in America, pg 28-29, National Federation of Independent Business, A.C. Cooper, William C Dunkelbeg, Carolyn Y. Woo, William J. Dennis, 1990 The NFIB Foundation, Washington, D.C.

[2] 411 Small Business Facts: Retirement. National Federation of Independent Business,

Small Business Administration talks about next batch of COVID-19 relief for communities - WHSV

Posted: 23 Jul 2020 04:34 PM PDT

WASHINGTON (Gray DC) -- The Small Business Administration has been heavily involved in distributing millions of loans to businesses and non-profits around the country that fell on tough economic times as a result of the COVID-19 crisis.

Negotiations continue on Capitol Hill this week between bipartisan congressional leaders and the White House. Officials are eyeing another round of coronavirus disaster federal relief. Small Business Administrator Jovita Carranza talks about what she thinks should be included in these funds.

While many strained businesses and non-profits have already applied for federal relief dollars to stay afloat, Carranza urges them to ask for help through the Paycheck Protection Program (PPP). She says there is still more than $130 billion remaining in the funds and small businesses have until August 8th to apply.

She emphasized that the government has made many changes to streamline the process so businesses can access these forgivable loans within five business days. Carranza also encouraged business owners to consider taking advantage of other options, like the Economic Injury Disaster Loans (EIDL), for access to low-interest loans.

Watch the video below to hear more.

Carranza also reflected on the evolution of these COVID-19 relief programs, as there were challenges early on to deploy funds to those in greatest need. She also spoke about the future outlook for small businesses and how leaders hope to lift up this critical sector of the economy and American society. Click the video below for more.

Copyright 2020 Gray DC. All rights reserved.

New Prior Lake startup seeks to make small business connections - SW News Media

Posted: 24 Jul 2020 07:00 AM PDT

Atop the third floor of an office building on Main Avenue in Prior Lake, Lucy Stange and Mikaela Donelan are patiently waiting.

Modern round chairs held up by a chain and long wood tables are just part of the welcoming environment designed to breed connectivity into their non-traditional startup business, The Social Exchange.

The new company is designed to give a co-working space to local small businesses and most importantly, breed social connections and relationships.

Co-founders Stange, 35 and Donelan, 26, met each other two-and-a-half years ago at a launch party of a mutual friend. Stange struck up a conversation with Donelan and asked a simple question: "What do you like to do?" Turns out, they both had a love for working with small businesses.

"We can definitely work well together," Donelan remembered thinking.

As the company's CEO, Stange is no stranger to startups. In 2017, she started a marketing business called My Social Drive. After she became acquainted with Donelan, she hired her as a branding strategist, one of the roles she currently has at The Social Exchange.

For Stange, she hopes this company can give small business owners a way to connect with clients more genuinely.


In the age of COVID-19, the face-to-face connection is understandably scarce. Because of the pandemic, they are implementing 25% capacity in their lounge, which is between 25 to 30 people, contactless temperature checks and mandatory hand sanitization before entering, and, especially difficult in business, no handshaking.

"We thought, 'How can we be a leader in finding a way to make social business interaction COVID-safe?'" Donelan said.

Stange and Donelan believe that the social element of relationships is crucial for people to maintain, even if it is behind a mask.

"We need each other right now, more than ever," Stange said. "Right now is the time to show up and be there for people."

That is something she knows very well.

Stange grew up in Chihuahua, Mexico as the oldest daughter of nine siblings. From a young age, she helped her mother raise and tend to her siblings. That yearning to pull people together has stayed with her and seeped into her career.


The Social Exchange opened their doors on July 1 to start marketing and networking with the community, but officially begin hosting events for members in August. Their first launch event, which will be live-streamed, is set for Aug. 12.

In the meeting, they hope to bring awareness of what they offer to the community, announce a special membership offer to attending guests, and celebrate the grand opening.

To become a member, business owners need to fill out an application on The Social Exchange's website and wait to be approved by Stange and Donelan.

When members get approved, they have access to reserve what they call the "business lounge."

The space will be used for business owners to host private meetings, small social events, or other gatherings for their clients.

Stange and Donelan will even be there to serve snacks and drinks during meetings. "You can present yourself and not have to worry about the details," Stange said.

That relief of stress is even more paramount now.

Stange compares working during the pandemic to going to a gym.

Anyone could workout at home, but to be more accountable and intentional, you go to the gym. For most, working at home is feasible. But there is something special about communicating with no screen in front of the face.

"We are still needing social interactions," Donelan said.


"What are you doing right now that you are excited about?" Stange loves asking that question.

It encapsulates the mission of The Social Exchange. She doesn't want to dive deep into small talk and miss out on going deeper.

Looking past their opening, Stange and Donelan hope to expand to multiple locations in the future and obtain a bigger area for more social events. But in the time and space they are presently in, it's about cultivating a genuine relationship with everyone who steps in their door.

"This is a place to come and connect," Stange said. "I want people to leave here feeling like they have something to offer the world in their career."


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