Gene Marks, one of America’s foremost experts on small business, provides an update on the state of small business in America. From small business closures to PPP loan forgiveness and the technology tools that are helping small businesses adapt to today’s evolving landscape. Plus, Gene shares his insights into what impact the presidential election could have on small businesses.
I write weekly about issues concerning small businesses for several publications. The next topic I will be writing about is small business closures. When you hear about retailers, restaurants, fitness centers, and the travel industry there is no doubt they are hurting in 2020. But this is also a big country with 30 million small businesses spread across many verticals. This means there are still a lot of small businesses out there that haven’t been impacted as greatly by the COVID-19 pandemic.
A key reminder though when you’re looking at numbers is how do they compare to other related measures. The three biggest government agencies that report statistics on small businesses the Chamber of Commerce, the U.S. Census Bureau, and the Small Business Administration (SBA) all report 7 to 9 percent of U.S. small businesses close each year. There are about 30 million small businesses in the U.S. and around 6 million of those businesses have employees outside of the owners. If you take a 7 to 9 percent closure rate of those 6 million employer businesses that would be about five hundred thousand business closures each year.
The silver lining is when there are economic downturns it also creates opportunities for some businesses to grow or new businesses to start. Businesses have had to learn to adapt to working virtually and leverage technology to run their business. Online sales have increased 28% year over year in 2020, which means businesses have had to pivot from selling products only in-store to selling online as well.
A lot of people that received PPP loans in the Spring are starting to work out how to get them forgiven because those loans are starting to come due. You need to go back to your lender or bank and fill out the forgiveness application. If your loan is forgiving be mindful of the tax implication, whatever expenses you covered using the PPP funds will not be deductible on your taxes. This means your taxable income this year will be greater than you might normally expect to pay. Make sure to talk to your accountant early so they can help you prepare and know what to expect on your taxes.
Some of the technology categories that have become mainstream today are virtual meeting platforms, customer relationship management (CRM) applications, cloud-based accounting systems, and office systems in general like project management or HR applications. One of the biggest problems facing businesses though is security so you need to partner with an IT firm to ensure the systems and tools you are using are updated and secure.
Resources Shared:
Gene Marks: Almost 50% of the companies in this country still pay their primary suppliers using checks-
Gordon Henry: Hm.
Gene Marks: ... in 2021, which is amazing, but true, 'cause I see it-
Gordon Henry: Yeah.
Gene Marks: ... all the time. So a lot of them have had to adopt and move to more Cloud-based systems to do, you know, to- to accomplish their businesses, and it's had an enormous effect.
Thryv: The following is brought to you by Thryv, the end-to-end client experience platform that helps you get the job, manage the job, and get credit.
Gordon Henry: Welcome to Winning on Main Street. I'm Gordon Henry.
The American economy is driven by small business, local business people who want to work for themselves and build something successful. And today we're fortunate to be speaking with Gene Marks. Gene's the CEO of The Marks Group. Uh, he's a longtime consultant to small businesses and a purveyor of small business CRM software as well.
And Gene will be speaking at our upcoming Thryv Connect virtual conference on November 10th and 11th. And you can sign up to attend, uh, the Thryv Connect conference at thryv.com/connect. That's T-H-R-Y-V.com/connect.
Welcome Gene.
Gene Marks: Gordon, thanks for havin' me on. I- I especially wore my glasses today 'cause it makes me look smarter. So, um, I'm hoping whatever-
Gordon Henry: I, au- automatic IQ boost. Yeah-
Gene Marks: Yeah- yeah, whatever baloney-
Gordon Henry: ... fantastic.
Gene Marks: ... I spew in your direction-
Gordon Henry: (Laughs)
Gene Marks: ... hopefully it'll elevate it a little bit. So, you know, it must be right, because he's wearing glasses, so.
Gordon Henry: So, Gene, you, uh ... We're thrilled to have you on. And you were, um, on the show, uh, I don't have the exact date, but it was at the beginning of COVID. And I remember-
Gene Marks: Sure.
Gordon Henry: ... we were talking about, kind of, what was, uh, what was starting to happen, and you had a- a keen insight. So we're eager to hear your, sort of, updated views on things.
So my first question to you, actually, is just more of a personal one. I know you're in downtown Philly.
Gene Marks: Yeah.
Gordon Henry: Uh, Philly, like most cities have gone through, you know, sort of, a gut-wrenching time over the past six months, what with COVID and, also, hit by some of the protests and stuff that have gone on. And it's been a, you know, it's been a, uh- uh, a challenging time, I think, for people in Philadelphia and for the city. What's it feel like being in downtown Philly today?
Gene Marks: Uh, Philly looks great. I, uh, you know-
Gordon Henry: Good.
Gene Marks: ... I mean, Gordon, it is, like, a, uh- uh, it's, it, it's ... Maybe it's because of the demographics of the city itself. And in Philadelphia there's, sort of, two stories. Uh, there's parts of Philadelphia where the crime has really been increasing, and some of-
Gordon Henry: Hm.
Gene Marks: ... that is related to the police issues and all of that, and, um, so there's all of that.
I live in downtown Philly, it's right near Rittenhouse Square, um, in the downtown area. Philadelphia is a very young city, it's a very, uh, residential city, 'cause people living all over the place. And, um, uh, for starters, when I go and I walk around in the city, um, everybody's wearing masks, you know-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... uh, it's ... they just are. The restaurants are all busy. I mean they are-
Gordon Henry: Hm.
Gene Marks: ... they've all ... The- the- the city has given them the room to, um, expand into the streets.
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: So, okay, it's taking up a little bit of parking spaces, but-
Gordon Henry: (Laughs)
Gene Marks: ... that's fine. And they're- they're bringin' heaters out, and they're, whatever. I only ... I hope they keep this up forever, permanently-
Gordon Henry: Mm-hmm (affirmative), yeah.
Gene Marks: ... 'cause it's made the whole city into, like, this outdoor dining, sort of, alfresco, kind of, thing.
Gordon Henry: Hm.
Gene Marks: Um, and they've been, they've been boomin'. I mean they are ... Barclay Prime is near me, it's a steakhouse, right, that's right-
Gordon Henry: Yeah- yeah.
Gene Marks: ... it's a couple blocks from me. I mean I think they charge, like, $8,000 for a steak or something, like-
Gordon Henry: (Laughs)
Gene Marks: ... last time I checked. And there's people eating at Barclay Prime. There's, like, there's tab-, there's no tables to be found. I don't know who's-
Gordon Henry: Yeah.
Gene Marks: ... paying for their steaks.
Gordon Henry: Yeah.
Gene Marks: But they're ... people are out eating, so.
Gordon Henry: That's good to hear.
Gene Marks: I know some of the retail stores are, you know, are, that traffic has gotta be less. And I know that in the more of the businessy districts, where the high-rises are, a lot of the small businesses there are struggling. In fact, one deli that I went to all the time called The Coventry Deli, uh, on Market Street, just announced they were closing down 'cause they- they have-
Gordon Henry: Hm.
Gene Marks: ... no customers. People are not comin'-
Gordon Henry: Hm-
Gene Marks: ... to work.
Gordon Henry: ... hm.
Gene Marks: So, again, there's, you know, it's mixed. Um-
Gordon Henry: Yeah.
Gene Marks: ... not as horrific as one might say. People are ... They're- they're- they're muddling through this.
Gordon Henry: So speaking more nationally, you're an expert on these things.
Gene Marks: Yeah.
Gordon Henry: Have any statistics come out yet on, um, small business closures or, you know, h-, quantifying the pain that has been felt by small business across the country?
Gene Marks: That's a great question, because I'm going to ... I'm gonna write about this shortly. I mean I write ... So I write every week for The Guardian, I write for The Washington Times, I write for The Hill, I write for the Philadelphia Inquirer, I write for Forbes, and I write for Entrepreneur. Uh, so, I do that in the mornings and then I run my business.
So I write on small business. And one of the things I'm- I'm gonna be digging into in the next couple days is about the whole story about small business closures. And there's- there's a lot of, um, there's a lot behind the numbers that I think people need to know before-
Gordon Henry: Hm.
Gene Marks: ... they start pushing the panic button, right?
Gordon Henry: Hm.
Gene Marks: So when you- you, when you hear about retailers, and restaurants, fitness centers, do, uh, people in the travel industry, they are hurting, there is no-
Gordon Henry: Hm.
Gene Marks: ... doubt. In fact, most B to C small businesses are hurting. But this is a big country with 30 million small businesses, Gordon, you know? So, a lot of my clients ... Like, we have about 600 clients in my firm. They're, you know, family-owned businesses. They sell, you know, distribution parts, they manufacture paper and film. They, you know, uh-
Gordon Henry: Uh-huh (affirmative).
Gene Marks: ... provide certain services to businesses. They've been workin' through all of this. I mean people-
Gordon Henry: Hm.
Gene Marks: ... have been workin' from home, but they've continued to work. So a lot of companies that are out there have not suffered to the same level that, um, you know, you might read about in the news. What the news likes to report is bad news-
Gordon Henry: Bad news.
Gene Marks: ... and it- it's not all bad news. Now-
Gordon Henry: Hm.
Gene Marks: ... just last week there was, um, some news about small business, you know, bankruptcies.
Gordon Henry: Hm.
Gene Marks: And one report said that, you know, it- it, you know, 100,000 small businesses, uh, could be out of business, you know, uh, because of COVID. And, uh, Yelp just said that, like, 163,000 of those small businesses are no longer listed on Yelp anymore.
Gordon Henry: Yeah.
Gene Marks: Now if you ask Yelp, uh, 'cause I did ask Yelp, "Well how does that compare to, like, the businesses that didn't list at this time last year,"-
Gordon Henry: Hm.
Gene Marks: ... they're, like, "Oh, we don't have those numbers."
Gordon Henry: Hm.
Gene Marks: But you can never, you know, you can never take just one number in a vacuum. You know-
Gordon Henry: Right.
Gene Marks: ... you always ... You know, it's, like, is that good or that's bad? And I think what I have to tell ... What I, what I keep telling people is that well the- the, um, Chamber of Commerce, the U.S. Census Bureau, uh, the Small Business Administration, Gordon, they- they say that between seven to nine percent U.S. small businesses go out of business every year.
Gordon Henry: Right- right.
Gene Marks: Now there are about six million employer small businesses. There are 30 million small businesses in the country total. There's about six million that employ, uh, people. So even if you just take the six million at seven to nine percent, it- it's about 500,000 businesses a year go out of business every year.
So when you hear that, like, oh, 100,000 businesses went out, you know, out of business because of COVID, I, I'm not, I don't want to downplay it, because, yes-
Gordon Henry: Right.
Gene Marks: ... there- there certainly are, the businesses that suffered. But then I also take a step back and say, yeah, but, no, I don't know, how many businesses normally go bankrupt in this period-
Gordon Henry: Right, that's a really-
Gene Marks: ... you know?
Gordon Henry: ... good question.
Gene Marks: Yeah, and now many businesses were, kinda, teeter, or teetering on the edge, or they were ... It was a great economy before COVID, so, you know, they were, they were still doing okay despite their bad management, and now-
Gordon Henry: Yup.
Gene Marks: ... COVID- COVID made 'em, brought out all the- the honest-
Gordon Henry: Yeah.
Gene Marks: ... you know what I mean?
Gordon Henry: Yeah. Uh, so, Gene, yeah, that, uh, that's a great point, because one of the, one of the things I've heard, uh, people say, and I- I really think this is true, is that COVID has been, sort of, an accelerator, um-
Gene Marks: Yes.
Gordon Henry: ... that if, you know, if you were, sort of, going out of business, but just teetering on, it pushed you out. Um, but it's also changed people's behaviors in a way, and we got many people to do things they weren't doing before, and some of that has been, uh, a- a positive thing. For example-
Gene Marks: Yeah.
Gordon Henry: ... the use of Zoom that we're doin' now, and people were uncomfortable, that now everybody's an expert. So there's certain things that have happened that have been, maybe, in a, you know, somewhat positive direction.
Um, and along those lines, I'm wondering has, have you seen in your, you know, vantage point-
Gene Marks: Yup.
Gordon Henry: ... has it opened up opportunities for any businesses you've come across that- that, maybe, they're doin' things better, or more virtually, or, you know?
Gene Marks: And so, you know, when there's economic downturns like this, just like there were back in 2008, you know,-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... and- and 2009, um, it, you know, as- as bad as it is for some businesses, um-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... it does create some great opportunities for businesses that have been run well over the years, and they've got some-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... cash in the bank, or at least-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... some cash availability. So, yeah, so let- let, just, uh, let's talk about some of those opportunities. One you just mentioned was- was the whole Zoom thing, which ties into the whole work from home thing.
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: And, you know, and, Gordon, I don't know. I mean, I know you're the same way, 'cause you- you- you talk about small business all the time, so you get it, that this stuff has been around for a while, right? I mean-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... I've been tellin' my clients for years that they should have more of their employees working from home. And they've always resisted it, because-
Gordon Henry: Hm.
Gene Marks: ... I don't know, they don't trust the Cloud, or they're ... yeah, I don't know.
Gordon Henry: Right.
Gene Marks: Now they had to do it, because-
Gordon Henry: Yeah.
Gene Marks: ... the government made them do it. And-
Gordon Henry: Right.
Gene Marks: ... suddenly I've got all these clients saying to me, like, "Uh, Gene, why didn't you tell me this five years ago?" You can't-
Gordon Henry: (Laughs)
Gene Marks: ... I mean. Um-
Gordon Henry: Uh, yeah, you weren't listening.
Gene Marks: Yeah, you weren't listening. Yeah, and, you know, who really are the- the winners more, the ones who really knew, it's the whole millennial generation.
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: Like all these years, you know, guys, like, you know, mid, people in, like, 50s, like me, we're complaining, "Oh, those millennials, they don't know what they, whatever. They don't work-
Gordon Henry: (Laughs)
Gene Marks: ... hard. They just want-
Gordon Henry: Hm.
Gene Marks: ... to be at home. They want-"
Gordon Henry: (Laughs)
Gene Marks: But even demanding all of this flexibility for years, and then the business owners, yeah, you know, in- in this country, so many of them have been resisting.
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: And now, the- the ... I- I know so many, (laughs) you know, people that are millennial age are, like, saying, like, "See, you know, I told you-
Gordon Henry: Yeah. (laughs)
Gene Marks: ... you just didn't- didn't realize before."
So, it's a great opportunity for businesses, because now they've- they've embraced it, and they realize that this stuff works, which means that when things get back to normal, and they will get back to normal, um, and we start recruiting people again, we've got to be offering work-from-home options to people.
Gordon Henry: Yeah.
Gene Marks: It works-
Gordon Henry: Yeah.
Gene Marks: Um, it's, uh, not just 'cause, uh- uh- uh, well, as a benefit. Sayin', like, we're a big ... We- we believe in, you know, three days in the office and two days at home-
Gordon Henry: Right.
Gene Marks: ... or whatever. That will help attract more employees. So-
Gordon Henry: Yeah, hm.
Gene Marks: ... all of that stuff is a big deal.
Gordon Henry: I wanted to ask you, Gene, um, we both, kind of, work with technology a lot. Our- our company, you know, sells the Thryv software. You work with a lot of CRM software. Um, has- has ... Have you seen the, uh, pandemic, um, drive or accelerate the adoption of new technology by small businesses who are, sort of, finally learning I need a database, I need to offer virtual employ-, uh- uh- uh, appointments. I need to do business feed, email and text. I knew, need to accept electronic payments, I need to get reviews. Ha- has that happened?
Gene Marks: Yeah, 100%, um, uh, in- in a few, I don't know, in a few different ways. I mean, at the most rudimentary level there are still, um, many companies, many companies that their accounting systems are, like, QuickBooks on their desktop.
Gordon Henry: Mm-hmm (affirmative)- mm-hmm (affirmative).
Gene Marks: And suddenly, they have to flee their offices (laughs) and they realize that, well, we- we need to put, we need to have something in the Cloud if it to-
Gordon Henry: Hm.
Gene Marks: ... to make payments and to receive money and all that, that's the only way to do it. So there's this been huge migration there. Because, what are you, what are you gonna do, go in the office and collect checks, and then input them, um, right?
Gordon Henry: Right.
Gene Marks: And, like, 50% of the companies, almost 50% of the companies in this country still pay their primary suppliers using checks-
Gordon Henry: Hm.
Gene Marks: ... in 2021, which is-
Gordon Henry: Hm.
Gene Marks: ... amazing but true, 'cause I see it-
Gordon Henry: Yeah.
Gene Marks: ... all the time. So, um, that's had to change, you know, as, uh-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... as- as well. So a lot of them have had to adopt and move to more Cloud-based systems to do, you know, to- to accomplish their businesses, and it's had an enormous affect.
I'll tell ya the other big affect is, um, ecommerce. I mean, um, you know, you know, online sales have increased 28% this year, year over year. That's overall-
Gordon Henry: Hm.
Gene Marks: ... um, which means that a lot of businesses have had to pivot from-
Gordon Henry: Hm.
Gene Marks: ... just selling in their store, but to, like, to- to selling online. And a lot of people were holding back on doing that, um, and then they- they, you know, they realized they had no other choice and- and they've-
Gordon Henry: Hm.
Gene Marks: ... been capitalizing because of it. So ecommerce has been a big, you know, big- big thing, um, Gordon. And-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... um, like, you know, don't forget Amazon for example. They- they have, uh, over a million small businesses that sell on their platform.
Gordon Henry: Right.
Gene Marks: So eBay, Etsy, you know, it's-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... that's, also, had a dramatic impact. It's the opportunities- opportunities.
Gordon Henry: Yeah- yeah. Let's shift for a minute, You- you were really.
Gene Marks: [crosstalk 00:12:22]
Gordon Henry: ... really involved, probably still are, with, uh, the government programs that help small businesses during-
Gene Marks: Yeah.
Gordon Henry: ... the pandemic. So let's just start with one everybody remembers, which was the PPP. Um, has it run out and is there gonna be a replacement?
Gene Marks: So, you cannot apply for a Paycheck Protection Program loan anymore. That- that closed down on August the 8th. So, right now the big focus is on forgiveness-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... because a lot of people who got loans at the beginning of the period, now their loans are, uh, coming due for, you know, coming due, unless you want to apply for forgiveness. So you've got, you know, a lot of people are now starting to focus on that. I'm gonna get to a new stimulus in a second.
Gordon Henry: Hm.
Gene Marks: You know, where if there is no extension of the PPP, um, and right now there is none, um, and if there is no, um, you know, no change to what it is, you've got to apply for forgiveness. You've gotta go back to your lender, your bank, you've gotta fill out the Forgiveness application. There's an easy application if you're just an independent-
Gordon Henry: Hm.
Gene Marks: ... uh, business owner, or file a Schedule C. Uh, but you've gotta get that loan forgiven and, hopefully, that you will.
Be careful, guys, if you're getting your loan forgiven, because there's a big tax potential issue that you need to be aware of. If your business, this year, has been okay, you know, and a lot of businesses this year have been okay, they got Paycheck Protection loans, but they've been all right, and you've been paying in your taxes the same based on last year, well whatever expenses you're putting in for forgiveness are not gonna be deductible, they're not allowed to be deducted. Which means that-
Gordon Henry: Hm.
Gene Marks: ... those expenses are, uh, you can't deduct them, so your income is gonna be higher this year. And if you've been paying in taxes based on last year's income, and ev- everything else has been pretty much the same, you're gonna have a bigger tax bill this year. So, Congress might change that, but right now you've got to be talking to your accountants right now. And if you didn't follow my logic before, which I understand, just ask your accountant about, you know, the deductibility of my Paycheck Protection Program forgiveness, um, how does that affect my business, and your accountant can explain that to you. So that's-
Gordon Henry: Hm.
Gene Marks: ... that's one, 'kay?
Gordon Henry: Right- right.
Gene Marks: You asked about will there be a new round of Paycheck Protection Programs. So, I thought there was gonna be, like, two weeks ago. Um-
Gordon Henry: Hm.
Gene Marks: ... now things have been, kind of, pushed back. Uh-
Gordon Henry: Hm, mm-hmm (affirmative).
Gene Marks: ... the whole thing with the passing of Justice Ginsburg as well-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... uh, Washington is just gonna be, I- I predict over the next couple weeks, consumed by the whole confirmation process and all of that-
Gordon Henry: Yeah.
Gene Marks: ... kind of, stuff. So that's gonna take a lot of attention away. And, meanwhile, small businesses, uh, retailers, restaurants, or as many are struggling-
Gordon Henry: Yeah.
Gene Marks: ... and they need more stimulus. And the-
Gordon Henry: Hm.
Gene Marks: ... Federal Reserve, uh, you have the Treasury, Secretary Mnuchin. Um, main leaders in Congress, uh, agreed that there- there, you know, there- there should be another round of Paycheck Protection.
I believe that there will be, and I believe that we will see another round before election day. And I-
Gordon Henry: Oh really? Hm.
Gene Marks: ... do, yeah I do. And I, and I do. And, you know, listen, I mean, you can take that and a dollar to the bank and you can-
Gordon Henry: (Laughs)
Gene Marks: ... deposit a dollar in the bank.
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: But, uh, but I do think when you see that new round of Paycheck Protection, um, it's already the ... It's not even ... It's- it's been part of the stimulus bills that were voted down, but not because of this. They ... Peo- ... The Congress is arguing other- other issues right now. Everybody's in agreement that small businesses need help. And-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... there's no ... You- you don't want to lose the small business vote, you know, rushing-
Gordon Henry: Right- right-
Gene Marks: ... you know?
Gordon Henry: ... right, nice.
Gene Marks: So, um, so here's what you can look forward in other rounds, okay? And we ... When- when ... And I do think that it will happen. Um, uh, in- in the current provisions, if you have a loan of less than $150,000, automatically forgiven. You just, you sign a piece of paper, you represent that you incurred forgivable expenses. Nobody's gonna really touch ya, you're automatically forgiven.
Gordon Henry: Hm.
Gene Marks: If you have a loan for less than two million bucks, you just have to fill out the paperwork, but you don't have to submit any documentation, so it's pretty close to being automatically forgiven. That's really great. You will be able to apply for more money if you can prove that your business revenues are 50% lower so far this year than last year.
Gordon Henry: Hm.
Gene Marks: So it'll be way more targeted towards those businesses that are really still affected by COVID. Not just anybody can apply. So there's ... And then they've expanded the definition of forgivable expenses. So if you subscribe to services, like, Thryv, for example, or other-
Gordon Henry: Hm.
Gene Marks: ... technologies-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... uh, those are applicable, uh, as a forgivable expense.
Gordon Henry: Sure.
Gene Marks: So all those things would be part of a new round of s-. Paycheck Protection Program. Um, and I am, I'm gonna take the glass is half full view and say that I think it's gonna happen before election day.
Gordon Henry: Wow, that's great to- to hear your optimism about that-
Gene Marks: Yeah.
Gordon Henry: ... because I actually had not heard anybody say that yet. I thought you were gonna say after election, so that's- that's exciting.
Um, we're gonna take a quick break and we're gonna be right back with more from Gene Marks.
Thryv: Looking for that extra spark of inspiration to take your business to the next level? Thryv, the leading software for small business presents Connect20. The year's number one interactive conference for entrepreneurs like yourself will feature some of today's most successful business leaders, industry pioneers, and technology gurus.
Hear from a lineup of inspirational speakers, including Scott Galloway, the star of VICE TV's No Mercy, No Malice, and best-selling author of The Four, and the Algebra of Happiness. Well renowned CEOs, successful Shark Tank contestants, and savvy business experts will also be offering must-have advice. You'll have the opportunity to participate in scheduled educational break-out sessions with leading executives from Yelp, Lendio, Neighborly, and more.
Network with small business resources, like America's Small Business Development Centers, SCORE, and the National Women's Business Council, as well as with other owners just like you.
So grab a cup of coffee and join us for this virtual online event November 10th and 11th. This is the small business conference you won't want to miss. Register now at thryv.com/connect. That's T-H-R-Y-V.com/connect. Come to Connect, leave inspired.
Gordon Henry: Okay, we're back with Gene Marks, CEO of The Marks Group. And Gene was just giving us some really valuable information about his expectation that there will be another PPP program, uh- uh, past, uh, prior to election day, which, uh, I don't think I've heard too many other places. So, that's, kind of, new news.
Uh, and Gene, so just to recap what you were just saying. Basically if I ha-, if I was a business that got under two million dollars, uh, definitely under 150, and probably under two, uh, that will be forgiven if I fill out the proper paperwork, which is not too bad, right?
Gene Marks: Correct- correct, that's right. And that, again, that would be part of the second round if there, if there was a new round of Paycheck Protection Program. But, yes.
Gordon Henry: Right. And then you said, also, that, uh, if I've got, uh- uh, lower than fi-, or 50% or lower of the revenues from last year-
Gene Marks: Yeah.
Gordon Henry: ... uh, then I would get forgiven, right?
Gene Marks: Right. So they put aside ... Right now in the, in the current bill that failed in the Senate, there was about, around 200, um, billion dollars put aside for more Paycheck Protection Program money, which is great.
Gordon Henry: [crosstalk 00:19:49]
Gene Marks: But, again, you ... It's gonna be very targeted, and it's really, this time around, it's gonna be at industries that have really ... Now by the way, um-
Gordon Henry: Hm.
Gene Marks: ... I mean all of this is still up for negotiations.
Gordon Henry: Yeah.
Gene Marks: It's- it's been, it's pretty much agreed on by partisan-wise. But-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... some industry groups would like to see that 50% number even lower, Gordon.
Gordon Henry: Hm, mm-hmm (affirmative).
Gene Marks: Like, saying, "Hey, that's a little stiff. How about if we should have, we, uh, our revenues dump 30% compared-
Gordon Henry: Right-
Gene Marks: ... to last year." So-
Gordon Henry: ... understand.
Gene Marks: ... so that might change, that might change.
Gordon Henry: Mm-hmm (affirmative)-
Gene Marks: But right now-
Gordon Henry: ... right.
Gene Marks: ... it stands at 50.
Gordon Henry: Right, okay. Um, Gene, you- you- you were mentioning, uh, the Thryv technology and other CRM technology, and how that may be forgivable. Um, I'm just wondering whether you can r-, talk about small businesses and how they've used technology to, sort of, get through this period, this rough period they've been- been in. Have you seen businesses, kind of, ramp up their use of technology, 'cause obviously they can't see people face-to-face. You mentioned the issue of I can't, I can't, uh, accept checks anymore, because how am I gonna do that? So, what have you seen that, sort of, people changing the way they do business?
Gene Marks: Well a whole bunch of different technologies have suddenly become, like, almost household words. I mean Zoom is a perfect example.
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: Uh, is, you know, Microsoft Teams, you know-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... uh. Google Meets. So all of the virtual conferencing stuff has really become, um, you know, just, sort of, like, uh, you know, like a name brand, kind of, thing, and a lot of businesses have adopted them. But it- it hasn't stopped at there, Gordon. I mean, um, you know, CRM applications, uh, have been, they ... that's Customer Relationship Management.
Uh, you know, we- we sell a few of them. Um, you know, Thryv offers CRM options as well. Uh, maybe small businesses themselves are realizing that, um, particularly in a world where you've got, uh, your workforce is now spread out, you need to have one, sort of, Cloud-based database where everybody is on the same page. And, um, uh, you know, the CRM systems, they not only make sure that nothing falls through the cracks, but pretty much, and, you know, uh, undiplomatically, they ensure that your people don't look like dopes in front of your customers-
Gordon Henry: Hm.
Gene Marks: ... you know? (laughs) They, you know, uh, with a good CRM application, you know, you, you know, when, if you're talkin' to a customer, you can see who else spoke to them, or what was emailed to them, or what notes about them, or what you sold to them. And- and all of that, again, if people workin' from home, they can't just ask their person in the cubicle next to 'em. So that's provided a really- really, you know, big benefit.
Gordon Henry: Hm.
Gene Marks: Cloud-based accounting systems have also been very- very popular. And- and just office systems in general. So, uh, besides Office 365, you know, Microsoft's Office and Google's G Suite, Slack has been a big winner as well, which is a great communications application for people, um, you know, instant messaging and creating channels and groups of- of customers and- and projects that they can do.
And speaking of project management, um, I've seen a lot of people have upticks and project management in HR applications, so-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... project managers are, like, Asana, and Basecamp, and-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... Trello. Because, again, you've got people all over the place, we need one place where we can share that information.
Um, and HR applications are the same thing. You've got ... Now you've got all of these workers. They need to stay in touch with each other, they still need performance reviews, they still need the ability to, uh, put in for PTO or sick time. There's trainings, there's forums, there's insurance to manage. So there's a lot of great HR platforms that are out there that help people manage this stuff now in the Cloud. Um, uh, you know, paychecks, and, uh, Zenefits, and, uh, you know, uh, Bamboo. So these are all, have all- all seen significant increases.
One of the biggest problems that businesses have been having that, um, just to make sure that- that we're all aware of this, though, is security, Gordon.
Gordon Henry: Hm.
Gene Marks: I mean, um, if you Google around, and I wrote about this a few weeks ago, there's been, like, an explosion in ransomware and malware attacks on businesses-
Gordon Henry: Hm.
Gene Marks: ... because there's people workin' from home using, like, Windows 95 or-
Gordon Henry: Yeah.
Gene Marks: ... God knows what is still there-
Gordon Henry: (Laughs)
Gene Marks: ... you know? (laughs)
Gordon Henry: Hm.
Gene Marks: And they're connecting into their corporate networks on-
Gordon Henry: Hm.
Gene Marks: ... you know, whatever. So we've been tellin' our- our clients, you've got ... I mean, sorry, but, you know, uh, one of the things with people workin' from home, you've got to hire, like, an IT firm, um, you know, local person or somebody to go and they've gotta survey all of your work-from-home workers. Make sure they've got security software installed, make sure everybody's running recent operating systems, 'cause that's how they get in. They get into old versions of Windows and [macIOS 00:24:10]. They compromise them, and then they control of them, and then they get access to your corporate system that way. It's a really bad thing. So-
Gordon Henry: Hm.
Gene Marks: ... um, so and the hackers know it, they know it. So I-
Gordon Henry: Right.
Gene Marks: ... really recommend if you're running a business that-
Gordon Henry: Upgrade.
Gene Marks: ... um, y- yeah, you do a double check on your security. Because if they do, um, you know, hack into you, you're- you're done, man. I mean you ... Uh, businesses go out of business because of it. You are, your- your files are locked, you can't get anything done. It's just unbelievably disruptive.
Gordon Henry: Yeah.
Gene Marks: So, you've gotta do some preemptive work on that.
Gordon Henry: Yeah, some great advice. Um, so we only have a few minutes left. But I- I wanted to ask you the question. You know, we're in a big controversy election year, obviously. Um, and I don't want you to predict the election, unless you-
Gene Marks: Yeah, yeah.
Gordon Henry: ... happen to know who's gonna win.
Gene Marks: Yeah.
Gordon Henry: But- (laughs) but I would love to hear your take on small business in terms of each can-, each, may, you know, candidates, uh- uh, position. Uh- uh- uh, you know, are there things you like or don't like from a small business perspective from each of the candidates or each of the platforms?
Gene Marks: So both candidates ... As we're speaking, so I don't know when this is gonna air, Gordon, but as we're speaking today, which is, you know, we're- we're in the third week of September-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... uh, the Biden campaign just- just today announced a whole small business outreach thing. They have a-
Gordon Henry: Okay.
Gene Marks: ... business advisory council.
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: Uh, they have some, you know, people involved. I'm actually interviewing Andrew, uh, Yang about this-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... uh, later today, um, because he's- he's, like, chairing this whole thing. So it's ... And- and it's a lot of love for small business, because it's a big voting block. But let's talk about the numbers, you know?
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: Um, the- the, really the bottom line is, um, you know, and again the Biden candidacy, if Trump didn't, you- you ... The pros and cons to each, so we don't have to get into all of that. But from a business perspective-
Gordon Henry: Right.
Gene Marks: ... um, Trump is more business friendly-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... overall than-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... Biden. Um, so you have to keep that in mind. And- and let me give you some specific reasons why.
Gordon Henry: Yeah- yeah, give us some.
Gene Marks: Um, yup. So Biden, you know, for starters, he is a supporter of a national $15 a hour minimum wage. He is-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... a supporter of, uh, extending the Family Medical Leave Act from unpaid, to make sure that it's paid.
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: Um, he is, uh, a supporter of increasing overtime wages, which means-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... the amount of money that you're paying people, uh, that work overtime. Businesses would be responsible for doing-
Gordon Henry: Hm.
Gene Marks: ... doing more of that. He is a- a supporter of, uh, of- of scaling back the use of subcontractors. There was a reason, big deal in California.
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: Uh, Uber and Lyft were involved-
Gordon Henry: Hm.
Gene Marks: ... where people ... Uh, you know, California has a new law that says that you can't use subcontractors in your business to make you money, they can only be used for services. Um, so, like, an Uber driver couldn't ... would have to be classified as an employee.
Gordon Henry: Employee, yeah.
Gene Marks: Biden ... Yeah, Biden supports that-
Gordon Henry: Mm-hmm (affirmative)- mm-hmm (affirmative)-
Gene Marks: ... as well.
Gordon Henry: ... hm.
Gene Marks: And he also supports, uh, like- like, taking away noncompete clauses from agreements.
Gordon Henry: Hm.
Gene Marks: If you hire somebody and they leave, they can go and work for a competitor.
Gordon Henry: Compete, yeah- yeah.
Gene Marks: On the tax side, uh, he- he- he, uh, across the board, he does support, uh, higher rates. Um-
Gordon Henry: Hm.
Gene Marks: ... he wants to increase the rates, uh, individual, for wealthy earnings over $400,000.
Gordon Henry: Hm, mm-hmm (affirmative).
Gene Marks: Uh, he wants to increase capital gains rates, he wants to increase the rates that would be subject to FICA taxes, and he wants to increase the corporate rate from-
Gordon Henry: Hm.
Gene Marks: ... 21% to 28%. So-
Gordon Henry: Okay.
Gene Marks: ... those are some [inaudible 00:27:31]. And on health insurance he wants to go back to, uh, fully bring back Obamacare [crosstalk 00:27:35].
Gordon Henry: Obamacare, hm.
Gene Marks: So those are all ... You know, and- and I'm not saying these are bad things. Don't, you know, just ... But, they- they- they do tend to be a little bit more ... They- they will be more expensive for small businesses.
Gordon Henry: Small business, yeah.
Gene Marks: He is more labor-related and Trump is just not. He's a deregulatory-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... guy, and, uh-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... and- and not a tax guy. So those are the things. Now, does that mean that, you know, there, uh, those issues alone make you vote for, uh- uh, Trump-
Gordon Henry: Yeah.
Gene Marks: ... over Biden-
Gordon Henry: Uh-
Gene Marks: ... maybe not. You know, I mean it just, it depends on what you [crosstalk 00:28:02].
Gordon Henry: Yeah, I understand, personal preference. But- but- but you're layin' out what- what are the things that directly relate to small business.
Gene Marks: Yeah.
Gordon Henry: And is there anything that the Trump administration has proposed going forward that might be different then what we're already seeing for small business. Any- any additional changes that you can mention?
Gene Marks: Nothing significant, to be honest. He, um, is just ... Uh, his- his whole economic plan is just, you know, keeping tax rates low-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... um, and- and- and reinforcing, you know, deregulation as much as possible.
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: One thing that he does support, and so does Biden, um, are significant investments in infrastructure.
Gordon Henry: Hm.
Gene Marks: So Trump has proposed a 1.7 trillion dollar plan. Biden has, uh, has, uh, done a 1.5 trillion dollar plan. Um, both can ... Biden leans a little bit more towards green infrastructure, more environmentally friendly stuff. Trump, you know, more towards the transportation sector. Highways, you know, en- energy grid that, kind of, thing. But really, both, one in the same.
So, if you're a small business in the, uh, in the construction business, and, or- or you're servicing ... If you're lookin' to follow the money, uh, there's gonna be 1.7 trillion dollars going towards construction businesses for-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... for infrastructure-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... and that's a lot of opportunity for you to sell into. Um-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... you don't have to be in the construction business to take advantage. If you-
Gordon Henry: Hm.
Gene Marks: ... I don't know, you clean offices, than buy a list of construction firms, because they'll be able to pay more for people to clean their office-
Gordon Henry: Hm.
Gene Marks: ... because there's gonna be more work happening in those sectors. So-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... I think that's gonna be a market that really does grow. And you can also expect both with Trump and Biden though, um, there's gonna be more turmoil in health care.
Gordon Henry: Yeah.
Gene Marks: Um, and, unfortunately, Trump's plans, he has an association health plans, health care reimbursement plans. He ... His whole thing is to, uh, give more options to businesses. Um, Biden feels that it's just, it's better for the country to have more, you know, towards the Affordable Care Act. Um, so again, that's gonna be another, sort of, political battle.
Gordon Henry: Yeah.
Gene Marks: And we haven't even talked about immigration, but-
Gordon Henry: (Laughs)
Gene Marks: ... you know, that- that's a whole other issue itself.
Gordon Henry: Is that, is that an issue that resonates a lot with small businesses?
Gene Marks: It depends on where the small business is-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... it really does. I mean-
Gordon Henry: Yeah.
Gene Marks: ... if you're down in the sunbelt states, you rely a lot-
Gordon Henry: Yeah.
Gene Marks: ... on migrant workers-
Gordon Henry: Hm, migrant workers.
Gene Marks: ... to do a lot of the work.
Gordon Henry: Yeah.
Gene Marks: You really do. So, um, and then, of course, even if you're in the technology industry, I mean immigrants, you know-
Gordon Henry: Yeah.
Gene Marks: ... have come, uh, from India and China.
Gordon Henry: H- H- H1 visas.
Gene Marks: Yeah, a huge impact on people.
Gordon Henry: Uh-huh (affirmative).
Gene Marks: But then, again, you talk to people in the Midwest, and people across the middle of the country and they, uh, you know, they- they feel like their jobs are taken away from- from immigrants. So-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... that's another ... Uh listen, uh, Gordon, that is a debate that has been goin' on since this country was founded-
Gordon Henry: Sure- sure.
Gene Marks: ... you know, and I don't think it's gonna end anytime soon.
Gordon Henry: Yeah. I was just curious to follow up on your comment about the $15, or the minimum wage, which I guess-
Gene Marks: Yeah.
Gordon Henry: ... was, uh, you know, proposed to be $15 an hour, and you're saying Biden asked that. Uh, and, of course, we remember during the campaign that Bernie Sanders was big on the $15-
Gene Marks: Yeah.
Gordon Henry: ... an hour. Is- is- is that something that's, um ... Uh, in the cities where they've enacted it, I think they enacted it in Seattle-
Gene Marks: Yes.
Gordon Henry: ... hasn't it already, sort of, been proven that it really was tough, particularly for the restaurants? Um, that some of the, you know, some of the businesses just couldn't make it?
Gene Marks: Again, depends on who you talk to. It's- it's-
Gordon Henry: Hm.
Gene Marks: We live in a world now where you could take a position and- and find some research-
Gordon Henry: Some.
Gene Marks: ... study that will back-
Gordon Henry: Hm.
Gene Marks: ... up your position, you know?
Gordon Henry: Sure.
Gene Marks: So, c- 'cause I wrote about this a couple months ago about minimum wage and how ... Um, I- I took two different research studies, one done at Berkeley and one done from the University of Washington, which said that minimum wage had no impact-
Gordon Henry: Hm.
Gene Marks: ... on the ability of small businesses to hire. And they took sample sizes in Seattle and San Francisco. Then there was another research, other researches by the University of Chicago that said the exact opposite, that it did.
Gordon Henry: Hm.
Gene Marks: They took mid-western businesses and it had an impact on them to hire.
It is a, um ... Uh, first of all, I just, putting aside all the academics, just from somebody who runs a business. I mean clearly-
Gordon Henry: Hm.
Gene Marks: ... increasing your minimum wage is ... It has this- this roll-on effect, Gordon. It's not-
Gordon Henry: Hm.
Gene Marks: ... just the entry level people-
Gordon Henry: Hm.
Gene Marks: ... but it- it impacts all wages. I mean if you have-
Gordon Henry: Right.
Gene Marks: ... you have a person in your, in your shop that's makin' 18 bucks an hour-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... and they've been workin' for you for five years-
Gordon Henry: Sure.
Gene Marks: ... and then minimum wage goes up to $15.
Gordon Henry: Right.
Gene Marks: So your entry ... Then you're hirin' a college kid now, or a high school kid-
Gordon Henry: Right.
Gene Marks: ... at $15, what's that person gonna say? He's gonna be, like, I'm not ... I'm only makin' three bucks more-
Gordon Henry: Three bucks, yeah.
Gene Marks: ... than a high school kid?
Gordon Henry: Sure.
Gene Marks: I- I-
Gordon Henry: Yup-
Gene Marks: ... right?
Gordon Henry: ... good point.
Gene Marks: So it has this ... But now, the- the final thing is, um, on minimum wage is, um, uh, Trump also supports a national minimum wage. He's more-
Gordon Henry: Mm-hmm (affirmative).
Gene Marks: ... around the $11 to $12 an hour range.
Gordon Henry: Hm.
Gene Marks: But he wants to index it for inflation after-
Gordon Henry: Hm.
Gene Marks: ... that, and that would be it. And, so, don't think that he's an anti-minimum wager. But the one thing is about Trump is that he's very much, uh, a state's rights, kind of, you know, uh, guy.
Gordon Henry: Right.
Gene Marks: So I don't, I wouldn't expect under a second term of Trump that he would actually enact a national minimum-
Gordon Henry: Federal-
Gene Marks: ... [crosstalk 00:32:39].
Gordon Henry: ... yeah.
Gene Marks: I think he would continue to just leave that issue to the states.
Gordon Henry: Right, okay. Well, um, we're just about out of time. This has been terrific. Uh, we're excited that you're gonna be comin' to Thryv Connect, uh-
Gene Marks: [crosstalk 00:32:50]
Gordon Henry: ... speaking at our conference in, uh, November. So that, you know, we can all look forward to that. Uh, and by then, November 10th and 11th, who knows, we may actually have a new president, maybe not.
Gene Marks: I- I doubt it. I don't think-
Gordon Henry: (Laughs)
Gene Marks: ... we will. I, uh- uh, I- I would say to anybody listening to this podcast to, uh, brace yourself.
Gordon Henry: Yeah.
Gene Marks: Um, I think you're looking not to see, uh, finding out who a winner is for at least six to eight weeks after the election, that's what I think.
Gordon Henry: Six ... oh my God. Well-
Gene Marks: I think it's gonna take that long, I really do. But, uh, I hope I'm wrong on that-
Gordon Henry: Yeah-
Gene Marks: ... I really do.
Gordon Henry: ... I hope you are too. Okay.
Gene Marks: Yeah.
Gordon Henry: Well, Gene, uh, thanks for speakin' with us today. This has been terrific-
Gene Marks: [crosstalk 00:33:24]
Gordon Henry: ... and, uh, I'm- I'm- I'm pleased to hear that, uh, despite six months of COVID, you- you're-
Gene Marks: Uh-
Gordon Henry: ... you're feeling, sort of, relatively optimistic about the small-
Gene Marks: Yeah.
Gordon Henry: ... business scene, so that's- that's great to hear.
Gene Marks: Yeah, I will never not be optimistic about entrepreneurship and small businesses in this country. There is-
Gordon Henry: Yeah.
Gene Marks: I will never not be optimistic.
Gordon Henry: We're a resilient group, that-
Gene Marks: Yeah.
Gordon Henry: ... for sure.
Gene Marks: Oh yeah.
Gordon Henry: Yeah. So thank you. We've been speaking with Gene Marks, CEO of The, uh, Marks Group, uh, based in Philadelphia.
And, um, for those of you who have not yet registered for Thryv Connect, again I suggest to you, uh, register online at thryv.com/connect, that's T-H-R-Y-V.com/connect, and you'll be able to hear great speakers like Gene Marks speaking at the conference in just a couple months.
This has been Gordon Henry. Uh, we're Winning on Main Street. We speak every week about what's going on with small businesses. Thanks for joining us, we'll see ya next week.