A Promising Government Stimulus Stalls & 4 More Small Business News Stories You Need To Know
Welcome to another week of Merchant Maverick’s essential news roundup for small business owners.
This week, Congress continued to kick a potential stimulus package down the road. Meanwhile, holiday shopping figures are looking hopeful in the eCommerce sector. Read on through for this week’s top five must-know stories for small business owners:
Table of Contents
A Bipartisan Plan To Help Small Businesses Looks Bleak
On Tuesday, a bipartisan Senate group proposed a $908 billion bill to help salvage the economy before the end of the year. The legislation would dole out $288 billion in aid for small business programs, such as the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. It would also increase liability protections for businesses by temporarily suspending COVID-19-related lawsuits at the state/federal levels.
However, Senate Majority Leader Mitch McConnell (R-Ky.) quickly shot the plan down, stating that he would prefer a more “targeted” approach. In response, House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) called for McConnell to consider the bill a starting point for bipartisan negotiations.
Congress has until December 11 to approve a funding bill and avoid a shutdown.
The eCommerce Pivot Was Successful On Black Friday
By almost all counts, this year’s Black Friday was a successful one for retail — digitally at least. Shopify reported that merchants using its platform broke the $5 billion sales barrier for the first time over Black Friday/Cyber Monday weekend. Amazon also reported successful numbers by noting that small- and medium-sized businesses sold $4.8 billion worth of goods through its site during the weekend. Those numbers are both substantially higher than last year; Shopify said sales grew 76% while Amazon’s shot up over 60%.
Other metrics showed similar results. For instance, research by Adobe Analytics found that small businesses saw an average increase of 110% in online sales compared to last year. Meanwhile, shopping app installs reached a single-day record of 2.8 million on Black Friday, according to data published by Sensor Tower.
Personalized Gifts Are Popular This Holiday Season
“Personalized gifts” is the number one trending term on Etsy this year, according to Josh Silverman, the site’s CEO. Silverman revealed the fact on CNBC on Monday.
“Large [online retailers] like Amazon are great to buy things that are very cheap and arrive very fast, and you use them and you’ve forgotten about them two seconds later and then they’re in a landfill,” Silverman said. “I think there’s always a need for things that are going to be cheap and arrive fast, but more and more I think people want an alternative to that, when they want that product to mean something to them, when they want it to feel special, and those occasions happen all the time.”
The SBA Released Borrower Data
As part of a judge’s order, the Small Business Administration released detailed borrower data from the PPP program on Tuesday. Names, addresses, and precise loan amounts for each PPP borrower were all disclosed. The SBA had been embroiled in a lawsuit against several news organizations that had requested the data under the Freedom of Information Act.
The results paint a sobering picture for small businesses. A report by the Washington Post found that more than half of the money allocated by the PPP went to just 5% of recipients. The top 1% of recipients took more than a quarter of all PPP funds.
It Was A Busy, Mixed-Bag Week For Facebook
Facebook was in the news a fair bit this week, both for good and bad:
- The social media titan purchased the startup Kustomer for $1 billion. The acquisition will enable Facebook to further provide tools and services to business clientele, as Kustomer specializes in customer-service platforms and chatbots.
- A report by Bloomberg unearthed how Facebook AI wrongfully banned small businesses struggling due to COVID from buying ad space on the platform. The bans cost businesses revenue and slowed the momentum needed to build customer bases.
- In an effort to reach out to small businesses, Facebook launched a microsite dubbed “Social Good for Business”. Facebook says the site will provide “resources and tools to help businesses advance their social impact.”
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Celebrity chef David Chang, founder of the Momofuku food brand, recently won the top prize of “Who Wants to Be a Millionaire”. In an effort to aid those hit hard financially by COVID this year, Chang chose to donate his $1 million check to the Southern Smoke Foundation, a crisis-relief organization based in Houston that helps hospitality industry workers struggling from debt or other hardships.
On top of Chang’s generosity towards hospitality workers, another feel-good story took place in the food industry this week: In Cleveland, a restaurant that voluntarily shut down until January to help limit the spread of COVID recently received a $3,000 tip on a $7 bill. Of that money, $750 apiece went to the four servers working that night.
“We’re all so desperate for uplifting news, if this was a normal year, yeah, this would be a good story, but it’s a great story because of the year we’re in,” said the restaurant’s owner Brendan Ring. “The outpouring of love for this story has been universal.”