As Los Angeles prepares to shed the bulk of its safety protocols on Tuesday, county legislators are hoping that the City of Angels will emerge from Covid energized for an economic recovery.
More than 4.5 million L.A. county residents—55 percent of its population—are fully vaccinated against the virus. More than 65 percent of those living in America’s most populous county have received at least one dose of the Pfizer or Moderna vaccines, according to the Los Angeles County Department of Public Health.
New rules taking effect June 15 mean vaccinated individuals will be allowed to go mask-free in most public settings—including retail stores. But while residents have espoused some of the highest rates of vaccine enthusiasm in the U.S., L.A.’s businesses are not out of the woods. Rolling shutdowns crippled the county’s shopping hubs throughout 2020, disproportionately impacting small businesses in underserved areas.
Earlier this month, L.A. Mayor Eric Garcetti signed a robust $11.2 billion spending plan for the fiscal year that begins July 1, offering some relief for struggling SMBs.
Comeback checks
In his State of the City address in April, Garcetti teased the rollout of new programs and funding that would support the county’s retail sector. A $25 million stimulus package—which would provide 5,000 of the county’s small businesses with $5,000 apiece to jumpstart their fiscal recovery—is now being doubled to $50 million, according to Leila Lee, associate director of community business in the Mayor’s Office of Economic Development.
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Lee told Sourcing Journal Friday that the City Council has expanded the package to help 10,000 businesses prepare for the summer months, with checks slated to mail as early as July.
The so-called “comeback checks” will be available to an array of L.A. small businesses, including retailers, restaurants and bars, and are meant to bolster payrolls, pay off debts and make rent, along with other expenses. The program could be especially impactful for the fashion sector, Lee said, noting that many of the region’s small brands and boutiques were unable to take advantage of PPP loans during the pandemic’s early days due to a lack of relationships with the participating banks. Funding was insufficient, some complained, or came with too many strings attached, like mandates that the money be used to fund payroll instead of paying overseas suppliers for product.
“A lot of times, they’re manufacturing back in China, or in India, and their operations here are actually a lot smaller than people expect,” she said of L.A.’s retailers, which often employ under five people. While PPP loans may have helped keep the lights on, small retailers simply needed cash to pay manufacturers.
And while the Small Business Administration (SBA) funded the Restaurant Revitalization Fund, setting aside a dedicated pot of funds for the hospitality sector, “PPP hasn’t always been instrumental from a fashion perspective,” Lee said. “So what we’re looking at right now is just kind of filling in the gaps on who was left behind.”
The comeback program will target businesses in at-risk Jobs and Economic Development Incentive (JEDI) Zones, which have suffered amid sagging foot traffic. City Council has set aside $5 million to fund these establishments, and another $5 million to support “legacy businesses,” or “long-standing neighborhood anchors,” the Mayor’s office said.
The program will seek to support entities that face limitations like financial literacy or language barriers, Lee added. Businesses that took advantage of PPP loans during the pandemic often demonstrated a high degree of business acumen, she said, efficiently dispatching their accounting departments to gather documentation and push through their applications for funding. “We want to make sure that we’re not just helping those that are really sophisticated, and ignoring those that don’t have access to an accountant,” she said.
“Another thing that we’re putting a lot of emphasis on this time around is the immigrant population,” she added, noting that federal and local governments have faced challenges in simply reaching a growing population of business owners for whom English is not a first language. Informing them of the resources that are available—and ensuring they receive the help they’re due—is central to the Mayor’s focus, she said. “We need to ensure that outreach is done equitably,” she added.
LA Optimized
While funding can’t come quickly enough for many, the Mayor’s office is invested in helping businesses prepare for a digital future, Lee said.
“We started looking into the businesses that have done well during the pandemic—who are they, and what have they done right?” she said.
The answer lies in embracing the web. “If you look at all the different studies, you can see that a lot of those that actually have done well, small and large, were businesses that have adapted to the digital marketplace,” Lee said.
The idea that all brick-and-mortar mom-and-pops build out e-commerce sites isn’t the goal of LA Optimized, she said. However, businesses that have found workarounds—from embracing delivery and omnichannel services to selling through social media—have fared far better than those that shuttered their storefronts and sheltered in place.
The new program will provide small businesses with access to creatives in the digital field, from site builders to photographers, videographers and copywriters, who can help business owners create content and build out functional businesses online. For those that already have e-commerce sites, “health audits” will be provided to determine new capabilities and improve performance.
The city has earmarked $2.5 million for the program, with the aim of helping 1,000 businesses and creating 500 projects minimum for the city’s creatives, paying about $500 per project. The funding will also go toward hosting at least 10 educational events for small business owners.
In addition to providing recipients with their own digital assets and sites, the program will provide free expertise for optimizing listings on Google, Yelp, Facebook and the like—key businesses drivers in the digital age. While many business owners have already taken advantage of these platforms, the program will showcase tools for targeting “their clientele more strategically” through algorithms and SEO, Lee said.
“If you’re a boutique doing business in Sherman Oaks, you could really be selling anywhere in the world, because you can ship,” she said. “If that’s your goal, we want to make sure people can find you—and not just those that live within five blocks of your store.”
On Tuesday, LA Optimized will launch a program dubbed the Accelerator Academy—a series of targeted business webinars developed in partnership with the University of Southern California’s (USC) Sol Price School’s Center for Economic Development. The events will take place on the first Tuesday of each month, and the first section will be a “Marketing 101” session with an expert from USC’s Annenberg School of Communications and Journalism, a representative from the county’s Small Business Development Center network, and non-profit California Manufacturing Technology Consulting, Lee said. July’s session will feature experts from Yelp, Google and Facebook speaking to users just getting started on these sites.
Future webinars will be tailored to different industry segments, Lee said, from retail and wholesale to manufacturing, restaurants, service businesses like salons, and experiential retailers like bowling alleys and movie theaters. Anyone can attend the Zoom meetups as long as they RSVP online, she said. “We’re talking to about 40 different corporate partners and they all have something to teach small businesses,” she said.
The city is kicking off the Accelerator Academy launch ahead of the start of the fiscal year thanks to funding from Ernst & Young, which works with the Mayor’s office on an entrepreneur in residence program each year. Citizens Bank and Facebook also provided seed funding.
Lee hopes businesses take advantage of LA Optimized “because we’ve never had a program where so many experts are streamlined this way.” The program aims to ensure that businesses are “ready, and resilient, in the future” after a year of unforeseen and unprecedented hardship, she said.