Making Great Things Happen
Opening a business takes a certain amount of risk tolerance, but even entrepreneurs were overwhelmed by the risks and uncertainties that were foisted upon them by COVID-19. Three Kentuckiana organizations that were offering business guidance to entrepreneurs prior to the pandemic — the Louisville Small Business Development Center, One Southern Indiana (1si), and The LEE Initiative — saw unique needs that resulted from COVID-19 and changed how they served their clients.
RESTAURANT RELIEF AND MENTORSHIP
Founded in 2018, The LEE Initiative began as a result of conversations between Edward Lee and Lindsey Ofcacek about the #Metoo movement. Both were committed to helping elevate women in the restaurant industry and ensure positive experiences for women who choose it as their profession. They decided to launch a mentorship program. “We were going to pair young women in the industry with women who had risen in the ranks from line cooks to now owning two to three restaurants,” Lindsey says. The goal was to not only show novices their older peers’ techniques, but also what it is like to be in a restaurant that is run by a woman. “The way that women lead in restaurants is often very different from the way men do,” she says.
After two successful years of the mentorship program and the announcement of a third in early 2020, the restaurant industry closed due to COVID-19. “One of the founding principles of The LEE Initiative has been to come up with creative and forward-thinking solutions for immediate problems that are holding the restaurant industry back,” she says. COVID-19 was that immediate problem. The LEE Initiative team turned Chef Lee’s restaurant, 610 Magnolia, into a relief center. In coordination with Maker’s Mark, the restaurant opened to provide meals and staples for any person in the hospitality industry who had lost their job. There was a line around the block on the first day. By the second day, when over 300 meals were served, it became clear that while they were acting locally, they needed to think nationally because every restaurant across the country was facing a similar situation.
Maker’s Mark pulled marketing funds and moved them to The LEE Initiative to create the Restaurant Workers Relief Fund. “Within two weeks, we were able to make cash infusions into 19 restaurants across the U.S.,” Lindsey says, allowing them to become LEE Initiative relief sites as well. As of the end of June, Lindsey says 325,000 families had been served at the sites. As restaurants began to reopen, The LEE Initiative reached out to see what it could do to help independent restaurants and farmers, whose industry has also suffered as a result of restaurants being closed.
“A lot of the farms that we work with realize 85% of their sales come from independent restaurants,” Lindsey says. This led to the establishment of the Restaurant Reboot Program, which provides cash to farms that then provide credits to the 19 independent restaurants where relief centers operate.
Another development was the creation of the ReGrow program, a partnership with Ashbourne Farms, where any independent restaurant in Kentucky can apply for $15,000 grants. “I never imagined us doing direct-aid relief, but something I’ve realized through this process is that the skills of running a restaurant and working on razor-thin margins and being able to pivot quickly are very good for direct-aid work,” she says. Finally, the McAtee Community Kitchen, in the space where Milkwood was housed, was a response to the shooting death of David McAtee, a local chef who Lindsey says “was very dedicated to supporting his community through food.” Chef Nikkia Rhodes, a 2018 LEE Initiative mentee, will be running that operation.
David Oetken, director of the Louisville Small Business Development Center (SBDC), says the organization helps individuals vet their business ideas, set up their businesses legally such as by forming an LLC or getting tax numbers, connect with a network of experts who can help them with their needs or offer ideas and support, and locate funding for their businesses. Small business owners also benefit from Louisville SBDC’s databases, which allow them to access information on market research and financial modeling.
While tech-type businesses can often find investors easily, on hopes that it will be the next Microsoft or Amazon, David says 96-97 percent of startups are lifestyle businesses, like coffee shops or boutiques. These businesses typically don’t have investors, which is where the Louisville SBDC steps in with its “secret sauce” of finding funding options. “We’re pretty good about finding little tranches of money that people wouldn’t think of,” he says. “Funding a business is like a jigsaw puzzle; you get a piece here and a piece there, and pretty soon you’ve got a nice little picture put together.”
David and his team launched weekly Q&As to field questions and provide advice. One top piece of advice was for business owners to “gather as much cash as they can and build up a war chest to live and fight another day,” he says. Louisville SBDC also helped coordinate loan modification plans with banks and rent abatements with landlords and vendors. “All those resources we cobbled together,” he says. Finally, the SBDC worked to help clients find new ways to bring in money even if they couldn’t operate in their normal way. For example, an event planning company transitioned to use its catering and liquor license to make food and beverage deliveries to people’s houses.
David says there has been a wide range of responses among business owners to COVID-19. Some have been frozen in place, others have wanted to simply protect what they have, and still others have seen the pandemic as an opportunity to try something new. Some of this response depends on how long they’ve been in business.
He has also seen some brand new entrepreneurs during the early months of the crisis. “You just got furloughed from your job, and what are you going to do?” he says. Historically, David says some of the big companies that exist now were begun during really difficult economic times. Disney, for example, was launched in 1929 during the midst of The Great Depression.
One Southern Indiana (1si) resulted from the merger of the Southern Indiana Chamber of Commerce and the Southern Indiana Economic Development Corporation in 2006. With 1,050 members and as the lead economic development organization for Clark and Floyd counties, 1si does a variety of different tasks to help local businesses. Helping to maintain economic databases, assisting manufacturing groups with planning and human resource concerns, assisting site location consultants in determining if Southern Indiana is a good fit for a business, and offering educational sessions and networking opportunities to members are just some of the things 1si does.
“The biggest challenge that businesses have had during COVID-19 is uncertainty,” says President and CEO Wendy Dant Chesser.
1si worked to help Indiana businesses determine whether or not they met the criteria of an essential business. Cash flow was another issue. Chief Revenue Officer Lisa Brooking and Executive Vice President Matt Hall, along with partners in the community, “really jumped in and created an emergency loan fund for small businesses,” Wendy says. “It’s been ongoing. One hundred and twenty three small businesses in Clark and Floyd counties received $1,157,000 in either forgivable or zero-interest loans,” she says. “We had never done a loan program to that extent, ever.”
When companies began reopening, many of them struggled with securing personal protective equipment (PPE), so 1si used its website to help companies more easily find and share sources. It has also helped companies navigate the Paycheck Protection Program (PPP) and helped business owners access the most up-to-date information coming from Indiana’s government about safely reopening.
As businesses have begun reopening, 1si has begun doing webinars on Wednesday, which are taking a big picture approach to the pandemic. “We’re focusing more on long-term recovery. The long-term recovery has to include workforce development questions and concerns. It has to include targeted industry strategy,” Wendy says.