As Paycheck Protection Program ends, small business beneficiaries look ahead

After funding for the Paycheck Protection Program ended on May 28, small businesses are looking ahead after struggling to stay afloat during the pandemic. For many, the program was a lifeline as business dried up and customers became nervous to leave their homes and created opportunities to find new business.

The program provided 11.8 million loans worth $800 billion to businesses across the country to pay up to eight weeks of payroll, including benefits, and pay interest on mortgage, rent and utilities. In Missouri,more than 237,000 loans were approved, most for $150,000 or less.

TJ Berry, the deputy director of the Kansas City District Office of the Small Business Administration, said businesses in the entertainment and customer service industries, like hotels, restaurants, and movie theaters were hit particularly hard by the pandemic. Without the PPP funds, he said many businesses would have suffered more or closed entirely.

“It kept those people employed and allowed the businesses to be ready to grow again as things started to open up, which I’m sure you can see at restaurants and so forth that you visit,” Berry said. “Everything’s opening up again, and those that have survived are ready to do a lot of business.”

For businesses like Lakota Coffee Company in Columbia, the program offered hope as businesses tried to navigate the pandemic and reach customers, owner Andrew DuCharme said.

PPP funds allowed DuCharme to retain every employee who wanted to work, but he was forced to find new ways to serve his customers and reduce the workload of his employees. After Lakota’s sales dropped by 70% overnight, DuCharme said many of his customers began placing orders over the phone to avoid spending time in-store.

He said Lakota’s stores quickly became overwhelmed while trying to take phone orders, prompting them to start an app and rewards program in August. The app allows customers to order ahead, and he said it’s been a big help to the business to draw new customers into stores.

“Developing a program that will help the customer experience has been huge,” DuCharme said. “You never had a huge demand for this, but all of a sudden, things can change dramatically, and you have to adapt to what the customer needs and wants.”

Barista Hailey Wolfe pours espresso at Lakota Coffee Co.’s downtown Columbia location. Lakota received funds from the Paycheck Protection Program, allowing the business to keep all employees who wanted to work. | Emily Hood/Missouri Business Alert

While some businesses used PPP funds to find new ways to reach customers, others used it to weather the storm until business returned.

Josh Barrett, owner of Two Guyz Automotive in Springfield, said the program helped the auto repair shop retain its six employees as customers stopped prioritizing car repairs. As the weather warms and vaccinations increase, Barrett and his employees are ready to accommodate new customers needing to service their cars.

“Everyone needs their car fixed, so customers decided that it was kind of back on their priority list, and we got busier,” Barrett said.

For some businesses, the Paycheck Protection Program provided a bridge to new sources of revenue after old sources reduced in the pandemic. Grandma’s Office Catering in Kansas City specialized in providing buffet-style meals to offices. After the pandemic hit, Grandma’s lost 70% of its business as offices closed and buffet-style meals were no longer appealing to customers.

Grandma’s Office Catering developed individual meal packs and began providing meals to warehouses and distribution centers during the pandemic. | Courtesy of Grandma’s Office Catering

The program allowed Grandma’s to retain all 45 of its employees and have the lowest turnover in company history, owner David Gordon said. The catering service pivoted to creating individual meals for warehouses and distribution centers to make up for lost business.

“My staff came up with the concept of individual meals,” Gordon said. “It’s extremely labor intensive, so it’s a lot more expensive, but it helped us survive.”

The future of Grandma’s Office Catering is unknown, he said, as many offices debate whether or not they will ever return to in-person work and new catering opportunities open in warehouses and distribution centers. With the Paycheck Protection Program ending, many businesses have used this time as an opportunity to plan for future issues.

“Having your business and creating the disaster plan, so that you can weather the storm, I think will be something that has a lasting effect to come out of the pandemic,” Berry said.

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