Good morning, MBA readers,
In the face of the COVID-19 pandemic, Kansas City entrepreneurs are looking for financial relief. In a recent survey by KCSourceLink, 70% of the more than 350 respondents said they needed funding or financial assistance. The organization, which connects entrepreneurs to resources in the Kansas City area, conducted the survey to analyze the early effects of the pandemic on local businesses.
The results show how quickly the tide has turned for some Missouri entrepreneurs. Among the respondents, 63% were concerned about revenue dropping, and 18% were concerned they may have to close.
Some entrepreneurs indicated they were having difficulty following quickly changing rules during the pandemic. Others pointed out that not all businesses can switch to virtual work. Some business owners said they will not be able to stay open without capital assistance, and others have already had to close up shop. Cash flow is a major concern.
“One of the biggest things we are working with our entrepreneurs is looking at cash flows — so, focusing on things that you can control right now,” SourceLink’s Jenny Miller said.
While working to assist entrepreneurs, the organization is also trying to encourage certain behaviors from customers: buying curbside meals from local restaurants, purchasing gift cards to use later at local stores, and seeking the services of area businesses when possible.
Efforts are underway at all levels to provide small businesses much-needed capital. The U.S. Small Business Administration is providing $25,000 bridge loans. The Kansas City Council approved a $500,000 relief fund, and a coalition of local organizations pulled together to provide $5 million in small business relief loans.
– Naomi Klinge
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Missouri COVID-19 cases pass 3,000
Missouri officials on Tuesday reported 315 new cases of COVID-19, bringing the state’s number of confirmed cases to over 3,000 out of roughly 31,000 people tested. Fifty-three people have died from the virus, 14 more than a day earlier. (Springfield News-Leader)
KC schools suspend free meals
Kansas City Public Schools suspended its free meal distribution program for students after learning a food service worker was presumed positive for COVID-19. (Kansas City Star)
Springfield, Greene County expand stay-at-home order
An expanded city-county order caps essential retailers’ occupancy at 25% if the store is smaller than 10,000 square feet and 10% if larger. It follows a new statewide stay-at-home order. (Springfield Business Journal)
Lack of swabs prohibits wider testing in KC-area county
A $400,000 plan to ramp up COVID-19 testing in Johnson County, Kansas, has stalled due to a shortage of specialized swabs that are mostly made in Italy, where manufacturing has slowed due to the pandemic. (KCUR)
Rawlings to lay off another 140
The Town and Country-based maker of baseball gear is temporarily laying off 140 employees at its headquarters. Last week, the company temporarily laid off 130 workers at a plant in Washington, Missouri, due to the coronavirus. (St. Louis Business Journal)
Justin Brands closes factories, stores in Missouri
The Texas-based boot maker has closed two factories and two retail stores in southwest Missouri, furloughing 161 workers in Carthage, Cassville, Joplin and Monett. (Springfield News-Leader)
Stifel CEO sees big pay bump after record year
Ron Kruszewski’s compensation jumped 50% to $8.2 million last year, including a $6.7 million bonus and $1 million in performance-based stock. The St. Louis-based investment bank logged a record $3.3 billion in revenue last year, up 10.3% from 2018. (St. Louis Post-Dispatch)
Springfield considers incentives for Kraft Heinz factory
Kraft Heinz is mulling upgrades to the production line at its Springfield facility, and the Springfield City Council is considering issuing industrial revenue bonds of up to $48 million for the project. According to the company, the upgrade would allow it to maintain 950 employees at the 750,000-square-foot plant. (Springfield Business Journal)
Texas truck dealer expands in Springfield
Jenkins Diesel Power, a Springfield vendor of commercial trucks, has sold to Texas-based Summit Truck Group for an undisclosed sum. The deal follows two other Missouri acquisitions last year by Summit. (Springfield Business Journal)
Sunset Hill office portfolio bought out of receivership
An unnamed local investor group has acquired two Sunset Hills office buildings — most recently held in receivership by Texas-based C-III Asset Management — for an undisclosed amount. The new owners have begun improvements to the properties. (St. Louis Business Journal)
KC restaurant chain shutters location
Nick and Jake’s permanently closed its Main Street location in Kansas City, citing financial constraints due to the coronavirus pandemic. The chain maintains three other locations in the area. (WDAF)
Former radio host sues Entercom over sex discrimination
Afentra Bandokoudis, the former co-host of a morning show on KRBZ-FM, also known as “The Buzz,” has sued the station’s parent firm, Entercom Kansas City, alleging sex discrimination and retaliation after her ouster in 2018. She claims that male hosts of similar shows made almost double her base salary. (Kansas City Star)
Facing delayed venue opening, KC firm takes mini golf home
Swell Spark, which operates a variety of entertainment venues, is now selling Sinkers At Home: A $120 kit that allows people to set up a 36-hole game of mini-golf at home. The idea came as construction on Sinkers Lounge, a new mini-golf-and-bar concept, was delayed due to the coronavirus outbreak. (Startland News)
Say that again
“That does not look like a stay at home order. It looks like a recommendation to continue social distancing.”
That’s Cindy Prins, an epidemiology professor at the University of Florida, speaking about Missouri Gov. Mike Parson’s stay-at-home order, which he announced last Friday, the Kansas City Star reports. Parson was slow to issue the order, which does not require any businesses to close their doors. William Hanage, a professor of epidemiology at Harvard, called the governor’s order “very mild.” The order allows municipal and county governments to issue stricter orders if they want. In announcing the order Friday, Parson said many governments initially issued stay-at-home orders “without thinking of the unintended consequences. Hundreds of businesses were declared essential. Thousands were declared non-essential.”
That’s how much St. Louis stocks dropped in the first quarter, a sharp decrease compared with major indexes, the St. Louis Business Journal reports. While indexes experienced across-the-board drops, the collective decline by St. Louis companies was especially high. By comparison, the Dow Jones Industrial Average dropped about 27%, and the S&P 500 fell about 24%. Joe Schulz, an analyst at Argent Capital Management, said St. Louis’ seemingly disproportionate slide is largely due to the fact that most of its companies — like Boeing, Peabody Energy and Arch Coal — are directly connected to the health of the economy. There aren’t as many of the software and technology companies that have buoyed stocks in other urban hubs.
I’m moving $1B of my Square equity (~28% of my wealth) to #startsmall LLC to fund global COVID-19 relief. After we disarm this pandemic, the focus will shift to girl’s health and education, and UBI. It will operate transparently, all flows tracked here: https://t.co/hVkUczDQmz
— jack (@jack) April 7, 2020
St. Louis native Jack Dorsey, who founded the financial services company Square in St. Louis in 2010, will donate $1 billion of his equity in the company to help fight COVID-19. That’s around 28% of his net worth, he said in a series of tweets announcing the fund. The thread included a link to a document where the public can see which causes the money is being spent on. Dorsey, who also co-founded Twitter, said once the pandemic is over, the money will be spent on girls education and causes related to universal basic income. He has already donated $100,000 to America’s Food Fund, according to the document.
Hello, my name is
The Kansas City-based auto software firm will temporarily lay off 200 of its workers, the Kansas City Business Journal reports. Since relocating to Kansas City, the company has grown by more than 200 people to around 400 employees. According to a notice filed by the company, the layoffs will not last more than six months. In early March, the company was seeing rapid growth and expressed plans to move into a new downtown Kansas City building in the near future.
Word to the wise
That’s the term used to describe an invasive plant that presents itself as rice but is actually just a weed. Some Donald Danforth Plant Science Center and Washington University scientists are involved in an agricultural research project just awarded a $2.6 million federal grant from the National Science Foundation to deal with this particular problem, according to the St. Louis Business Journal. The project aims to find solutions to mitigate the spread of the “domesticated rice that’s gone feral,” according to Kenneth Olsen, professor of biology at Washington University and principal investigator for the grant. Weedy rice is estimated to cost the country’s agriculture sector more than $45 million per year.
It’s been a pleasure doing business with you this morning.