Small Business In Crisis: Life, Liberty And The Pursuit Of Happiness In Chicago

On a Memorial Day Weekend walk today with my family through our favorite Chicago neighborhood, Andersonville, we noted each of the closed businesses along Clark Street. As an entrepreneur, I felt for each of the entrepreneurs and their families behind these storefronts, many faced with economic catastrophe.

While admiring the vintage neon sign (of a herring with a martini glass) leaping off the façade of Simon’s Tavern, we serendipitously met the proprietor, Scott “Scotty” Martin. Martin welcomed us in for a tour of the closed bar.

He happened to be showing his daughter around the renovations underway in what has often been voted Chicago’s best dive bar (seriously— it’s also rumored to be haunted). Martin had decided during the forced closure to invest—even in the face of the cash flow crisis— in a do-it-yourself renovation of the mahogany-lined, linoleum-floored establishment.

Martin’s passion for this Chicago institution, established by Swedish immigrant Simon Lundberg during the Great Depression, matches that of many small business owners across America. The pain he feels through this crisis resonates. “I’m paying $5,000 per month just in leases. Cash goes out the door. None comes in.”

The fallen Americans we celebrate this weekend— our true heroes— sacrificed their lives to protect their fellow Americans’ rights to life, liberty and the pursuit of happiness. The current crisis puts the interplay between these three values into stark relief.

Payroll From Your Own Pocket

Early in my career, as I was considering the life of an entrepreneur, a mentor of mine told me, “You never know what’s like to be an entrepreneur until you’ve made payroll from your own pocket.” I’ve done so now through two crises, and he was right.

While the government’s PPP funds have helped, they’ll be far from enough for many businesses to survive. Surveys of small business owners reach conclusions similar to those of a study published by the National Bureau of Economic Research: “This [crisis] represents a shock to America’s small firms that has little parallel since the 1930s.” (I found this working paper rigorous and helpful.)

Beyond policies, subsidies and loan forgiveness— all of which are necessary and welcome, but none of which amount to real business— small business owners seek to add value and be paid for it. To contribute to our communities, support their families and build dreams along the way. Most are rightly proud of the value they’ve built over many years of risk and hard work. We should all recognize the current crisis puts many of their hard-fought dreams at risk— and the health and prosperity of our communities.

For many small businesses, this isn’t just a tough economy, it could be the end of the line. It’s an existential crisis so far disconnected from the massive flows of funds into and out of our nation’s equities and debt markets, removed from the Federal Reserve’s Herculean— and essential— efforts to keep banks solvent and liquidity at hand.

Main Street and Wall Street have de-coupled— for now— and that’s dangerous for all of us. Despite massive inflows of capital inflating asset values, it’s unclear how long the larger enterprises represented by public equities markets can prosper as small businesses—employing nearly 50% of working Americans— suffer.

As Barron’s argued this weekend, “What is clear, however, is that the speed and robustness of a U.S. recovery is tethered to the ability of small businesses to weather the crisis.”

Beyond Politics— No Easy Answers

Meanwhile, the public dialogue regarding re-opening becomes politicized, as if anyone advocating rapid re-opening is a science-ignorant fool, or anyone committed to caution fails to understand the economic jeopardy our nation faces.

The unfortunate fact is, both (serious) sides have strong points and there are no easy answers. That’s why it’s called a “crisis.” Obviously, our federal government should have acted faster and earlier. We should have had swift and national development of testing and contact tracing infrastructure. The fact is we didn’t, and we still don’t. The best question now is what should we do from here?

First, stop the partisan BS (it’s shameful for all involved). Disagree— productively disagree— like adults. Arm yourselves with data, facts (not the alternative kind) and expert perspectives, not tweets and ad hominem attacks. Engage with your fellow Americans who all ultimately want the same thing— a safe, prosperous new future.

I’ll leave the rest to qualified scientists and public health policy experts. For now, I’d like to ask each of you to reach out to your local small business owners. BUY THINGS where you can. Businesses don’t survive without customers.

When appropriate, take a moment and hear their stories. After a few conversations, you’ll likely discover as I have that their stories are all of ours. They’re the story of our nation.

If this sounds sentimental, even grandiose, welcome to America.

Poorer, Less Independent, Less American?

I deeply respect the Amazons and Starbucks of the world. They are brilliant businesses working hard to serve each of us. But if we emerge from this crisis with a scale-dominated, instant-response commercial landscape hollowed out along our nation’s Main streets, we will live in a poorer, less independent, less passionate place. This isn’t hyperbole. It’s a looming threat to our nation.

The threat to life is real, and we have not yet overcome. Meanwhile, a nation with less of the entrepreneurial pursuit of happiness that makes places like Andersonville— and Simon’s Tavern— great, is in a real way less American.

Despite the threats, I’m optimistic about the majority of our nation’s small business owners to eventually thrive again. Many started with very little and built their enterprises customer by customer. That’s experience that endures.

Scotty Martin is one of those entrepreneurs. “I’ve thrown a few huge guys out of this place over the years. That scared me to death, but I did it because I had to.” I hope you’ll join my wife, Ada, and me at Simon’s Tavern after the eventual re-opening— with a mask, and not too close.