{"id":448,"date":"2020-11-18T07:47:00","date_gmt":"2020-11-18T07:47:00","guid":{"rendered":"https:\/\/www.godaddy.com\/ventureforward\/?p=448"},"modified":"2021-06-11T23:23:15","modified_gmt":"2021-06-11T23:23:15","slug":"what-the-cares-act-did-for-small-businesses","status":"publish","type":"post","link":"https:\/\/www.godaddy.com\/research\/what-the-cares-act-did-for-small-businesses\/","title":{"rendered":"How one town used federal CARES Act money to support its small business community"},"content":{"rendered":"\n

As shelter-in-place orders wreaked havoc on businesses in cities and towns across the United States this summer, local leaders and their teams like Dan Henderson and the Gilbert Office of Economic Development had to make some fast decisions.<\/p>\n\n\n\n

As director of the Office of Economic Development in Gilbert, Arizona<\/a>, a community of more than 260,000 people southeast of Phoenix, Henderson\u2019s team had heard from local brick-and-mortar and online entrepreneurs about plummeting revenue and skyrocketing debt from unpaid rent and overdue supplier bills.<\/p>\n\n\n\n

\u201cWe engaged with 1,000-plus businesses,\u201d says Henderson<\/a>. \u201cWe knew they needed money to pay rent, leases and mortgages, their employees and to pay their extended family of vendors.\u201d<\/p>\n\n\n\n

Fortunately, in late May, Arizona Governor Doug Ducey allocated $441 million<\/a> in federal CARES Act funds to cities and towns around the state. That included $29.2 million for Gilbert to use toward public safety and public health personnel expenses. After healthy discussions about where best the money could be used, Gilbert\u2019s Town Council chose to use the federal funds as directed. That then allowed them to reallocate the general fund budget, which would normally go to public safety and health, and use it to help local businesses confront the economic fallout from the pandemic<\/a>.<\/p>\n\n\n\n

\"\"What\u2019s happening in Gilbert is playing out in cities, towns and counties across the country. The pandemic has put enormous pressure on businesses of all sizes \u2014 whether they run a gift shop on Main Street, sell popsicles at local events or offer online web consulting. It\u2019s also put pressure on policymakers who are searching for creative ways to shore up these contributors to their economic prosperity.<\/p>\n\n\n\n

\u201cThere are many things that make a strong community, but the first among equals is business,\u201d says Gilbert\u2019s Town Manager Patrick Banger<\/a>. \u201cWithout businesses creating jobs, and those jobs creating revenues for people to pay their mortgages, send their kids to school, live their lives and provide funding for community services, what do we have? If we don\u2019t have a healthy local economy, we\u2019re not going to have a community.\u201d<\/p>\n\n\n\n

Of course, corporations and small businesses, which the Small Business Administration largely defines as companies with up to 500 employees, are a main driver of economic activity. But researchers at UCLA Anderson Forecast, using Venture Forward data, have determined that microbusinesses with just a handful of employees have an outsized impact on overall employment. According to the research, the existence of each everyday entrepreneur creates two more jobs in that community.<\/p>\n\n\n\n

Gilbert\u2019s approach to supporting its small businesses \u2014 including ones that only operate online \u2014 can serve as a model to other officials and policymakers grappling with the same issues. The town relied on data and research, and tailored the program to meet what business owners said were their biggest needs. The town also built in accountability and metrics for success and for return on investment. In the process, Gilbert maintained the flexibility to adjust its approach as the pandemic persists.<\/p>\n\n\n\n

Hard choices<\/h3>\n\n\n\n

When Gilbert\u2019s CARES Act money arrived in early July, many officials saw it as an opportunity to upgrade critical facilities or build new ones. The town\u2019s population is nearly 50 times as large as it was in 1980, which has put pressure on its emergency services, says Banger.<\/p>\n\n\n\n

Prior to the pandemic, officials were already looking at three public safety capital projects, including a family advocacy center to help victims of sexual and domestic abuse, a backup Emergency Operations Center and expansions of the police dispatch center to handle an increasing number of calls.<\/p>\n\n\n\n

\u201cThese were really worthy projects that we did at least throw up on the whiteboard for consideration,\u201d says Banger. At the same time, he says, the town\u2019s policy makers and officials wanted a deeper understanding of \u201cthe extent and breadth of the need out there to help our businesses.\u201d<\/p>\n\n\n\n

To do that, the council set up a 13-person task force, which included members of the town council, fire and emergency services departments, the town attorney, and the budget director. As Economic Development director, Henderson then turned to a unique data set that would help the task force make its recommendations.<\/p>\n\n\n\n

Data-driven decisions<\/h3>\n\n\n\n

Since 2018, GoDaddy has been working with academic research partners to evaluate the impact of its 20 million U.S. domain-name websites on the American economy and local communities.<\/p>\n\n\n\n

The multiyear research project, called Venture Forward<\/a>, identified 35,000 online ventures in Gilbert. That makes it one of the most venture-dense places in the country, with 17.2 such entities for every 100 residents. (Nationally, the density rate is 3.2.)<\/p>\n\n\n\n

\n
Search Venture Forward for data about your community<\/a><\/div>\n<\/div>\n\n\n\n

Between creating jobs, generating revenue and spending on services, these microbusinesses contribute a lot to local economies<\/a>. Venture Forward research has shown that adding one new highly active microbusiness \u2014 ones that contain many web links, generate significant traffic and contain features like payment portals \u2014 per 100 people boosts a county\u2019s median household income by more than $400. But because many of them don\u2019t have a physical storefront or aren\u2019t registered with the city, policymakers often overlook their impact.<\/p>\n\n\n\n

To better understand how they could help nourish these ventures and encourage new ones, Henderson, along with then-Mayor Jenn Daniels, and their team worked with GoDaddy to survey Gilbert\u2019s microbusinesses. The survey, conducted in February 2020 \u2014 before the crisis hit \u2014 among 226 GoDaddy customers there, found several key areas where Gilbert could take the lead in helping those businesses.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

For instance, to start their microbusinesses, respondents listed three main obstacles. Among them were marketing (48.8%), access to capital (28.3%) and permitting and licensing (27.7%). Once established, their concerns shifted, but only slightly. Marketing remained the top challenge (46%), followed by help finding skilled employees (19.6%) and then access to loans (17.8%).<\/p>\n\n\n\n

Those data points, says Henderson, helped Gilbert\u2019s task force assess business needs during the crisis. \u201cThat survey guided us tremendously,\u201d he says. \u201cIt gave us a huge framework. It gave us what we called a pre-COVID understanding of business needs and wants. And then, using a similar survey and methodologies we went back to assess their current needs.\u201d<\/p>\n\n\n\n

The results of Gilbert\u2019s \u201cbusiness needs\u201d survey, conducted in August, bore similarities to the previous one. Among businesses suffering from the impacts of the pandemic, 63% listed grants as the top need to help them with business recovery, with small business services next (25%) and access to capital and microlending (21%) in third place.<\/p>\n\n\n\n

As for technical assistance, respondents again placed marketing as the top need (39%), putting it in a tie with customer acquisition. Social media training placed third (29%).<\/p>\n\n\n\n

With that feedback, Henderson\u2019s team was able to make data-driven recommendations to the task force. By late September, they had come up with a three-phase program that would use federal CARES Act dollars for highly targeted local solutions.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

\u201cWe were able to use a data-driven approach to create a program to respond to a horrific set of events that businesses are still dealing with today,\u201d says Henderson. \u201cSo we have a very replicable model and methodology and approach to taking data and information and public outreach and creating business solutions to solve real problems.\u201d<\/p>\n\n\n\n

The $18 million #GilbertTogether Business Recovery program that came out of that data-driven approach is designed to provide three things, says Henderson: \u201cImmediate relief, sustainable recovery and long-term resilience for Gilbert businesses.\u201d<\/p>\n\n\n\n

Here\u2019s how help works<\/h3>\n\n\n\n