By Jessica Cohen
For the Gazette
Business owners should be planning for the “new normal” as they wait for the next round of government funding, says Arnaldo Sehwerert, regional director of the Mid-Hudson Small Business Development Center at the SUNY Ulster Kingston Center.
When the $349 billion in federal funding for small businesses ran out, many small businesses had received nothing.
“They need to think about how they’ll change their business operations,” he said. “The mantra I share with business owners is that they must have an electronic media presence, whether web page, Facebook, email or otherwise.”
He recalled the “mild resistance” to working from home he initially got from his staff.
“They want to see people and meet in offices, but now the staff meets on Zoom, and we’re getting used to it. We’re social animals, but my opinion is that when social distancing rules are relaxed, some, not all, will take advantage of it.”
With most of the 2.2 million small businesses in New York affected by the pandemic shutdown, he said, demand for funding exceeds the supply.
“Some businesses won’t make it, and others will be stronger. It’s economic Darwinism,” he said.
He noted how some businesses shifted to fill new needs, for example making masks and gowns for healthcare workers rather than business attire. He also recalled how businesses adjusted after 9/11. Some “joined forces,” collaborating in symbiotic ways. To cope with setbacks in the film industry, for instance, businesses that catered to filmmaking developed cooperative relationships.
“If you own a restaurant, and someone in town has a delivery system, working together could be a win-win,” Sehwerert said.
In and around Port Jervis, restaurants have elaborated on their takeout menus, and although none received stimulus funding, not all applied for it.
“We don’t want to be a burden to anyone. We want to do this on our own,” said Jeff Tautrim, co-owner of Fogwood and Fig.
“That’s commendable,” said Sehwerert. “But it doesn’t cost anything to apply. You can decide later if you’ll take the money, and you don’t know what will happen down the line.”
The Paycheck Protection Program provides loans that have a 1 percent interest rate that can be forgiven if funds are spent on employee paychecks. Economic Injury Disaster Loans are partially forgivable, according to how many people the recipient business employs. Sehwerert suggests preparing needed documents to be ready to apply.
Meanwhile, he anticipates inflation, as more money is printed without corresponding productivity.
“Prices will go high, eventually higher than people will tolerate, and we’ll readjust. It’s classical economic theory,” he said, noting that servicing debt in a period of inflation can be a challenge.
However, he said, he knows of no economic theory that explains the consequences of worldwide economic upheaval.