The Current State of Small Business Development with GA Chamber of Commerce Pres. Chris Clark

Over the past 18 months, small businesses nationwide have grappled with the many challenges of the COVID-19 pandemic. In fact, WalletHub recently ranked Georgia no. 24 on its list of State Economies Hit the Most by Coronavirus. However, small business revenues in the state appear to be on the upswing. Joining us today to discuss the current state of small business in Georgia is Chris Clark, President and CEO of the Georgia Chamber of Commerce.

Transcription:

Jim Fitzpatrick:
Good morning everyone, Jim Fitzpatrick with the Atlanta Small Business Show here on My ASBN. Thank you so much for joining us today. We’ve got a special guest with us, Mr. Chris Clark, who is the President and CEO of the Georgia Chamber of Commerce. Chris, thanks so much for joining us today.

Chris Clark:
Jim, thanks for having me and appreciate all that you guys do for small businesses all over the area.

Jim Fitzpatrick:
Well, thanks so much for that nice comment, and we love doing it. So, a lot’s taken place last year, and obviously COVID-19 hit us all pretty hard. It hit small businesses in Georgia especially hard. And needless to say, we’re still trying to recoup from it and what have you. So maybe we can start there. How are small businesses doing right now in Georgia?

Chris Clark:
So, they’re doing better, and I’ll give you a couple of statistics about how bad last year was. If you look at small business revenue in the state of Georgia for 2020, we were down 32%. So you took basically a third of the income streams from our small businesses. And then if you look at the number of new businesses that would normally start up in a given year, we were 32% down in that area too. So, we had a lot of pent-up demand of people not wanting to get out during COVID and start their own businesses. But as we come now into the third quarter of 2021, we are seeing an uptick in the number of new business startups. So we feel like that number is coming back. If you look at revenues for small businesses in Georgia, they are largely where they were pre COVID, if not above.

Jim Fitzpatrick:
That’s good.

Chris Clark:
So we feel good about that. I think the area where we still have concern is with minority owned businesses. We had about 41% of black-owned businesses that closed during COVID. Many of those didn’t reopen, and it’s taking a little bit longer with our minority communities to get their businesses back to where they were. So still some work to be done there.

Jim Fitzpatrick:
Sure, sure. And I would imagine that the PPP program provided a lot of much needed capital to these small businesses for those that could stay open. Right?

Chris Clark:
Absolutely. And a lot of credit to our elected leaders to get that work done. I’ll tell you there’s still businesses, I talked to one literally just the day before yesterday, who’s still in that queue waiting for that final round of PPP money to come through. So I encourage those businesses out there that still need that support to go ahead and talk to the SBDC, talk to the SBA, talk to your local banks. There’s still a little money out there as it starts to close out, but yeah, that’s been a huge lifeline for so many businesses.

Jim Fitzpatrick:
Yeah, there’s no question about it. So bring us up to speed on what’s happening at the Capitol right now with regard to Georgia commerce and Georgia business.

Chris Clark:
So a lot of our focus right now is at the federal level. Our big focus is trying to hopefully pass a bipartisan infrastructure bill. We know in Georgia that we need two and a half billion dollars a year for 30 years for our roads and bridges. We know that trickles down and supports thousands of Georgia small businesses. So we’re hopeful that that gets done. And then obviously continuing to work with the governor, the speaker, the lieutenant governor here in Georgia on both the recovery from COVID, but then how you help small businesses. And a great example, Governor Kemp right now has a taskforce made up of legislators as well as agency heads that are looking at how they distribute the rest of that federal COVID money that came to the state. So they’re looking at economic impact. They’re looking at broadband and infrastructure support. So I think there’s going to be even more dollars flowing through to small businesses over the next few months here in the state.

Jim Fitzpatrick:
How is Georgia doing in comparison to the rest of the country? How do we look?

Chris Clark:
So Jim, we’re looking great. I mean, I really have to say though, we have some sectors that still struggle. If you just look at the numbers comparing just 2020, Georgia had the fourth lowest job loss rate of any state out there. In the fourth quarter of 2020, really when you really hit bottom with a lot of numbers, Georgia had the second highest job growth numbers in the country. We ended last year, Governor Kemp just gave us these numbers the other day, had a 45% increase in the number of new companies moving to Georgia, almost 50% increase in the amount of new investment. And talking to our friends at the Department of Economic Development, those numbers continue to improve, looking at large companies, expansion, small business. That growth is just tremendous.

Chris Clark:
It’s a much more even recovery than we experienced in 2010. Quite frankly, the biggest issue right now that we’ve got in Georgia, that I’m hearing from both small businesses and larger companies, is the lack of talent and the labor crisis. I’m sure you’re hearing it from folks you’re interviewing, but that’s the number one issue everywhere I go in Georgia right now.

Jim Fitzpatrick:
You must have checked my notes before I came on today because that was my next question. That is a real issue, isn’t it? I mean, many people thought as though once this very generous unemployment benefits ended that people would start coming back into the workforce. But there was a study recently that showed four million people left their jobs in the last 12 months to look for better jobs. And that’s caused some angst among small business owners as well. Right?

Chris Clark:
Right. So you’ve got literally, this is not a short-term issue. You’ve got multiple buckets I put these issues in. So you’ve got the great resignation, which are people that are burnt out or looking for new opportunities after COVID. Estimates show that that’s about 25% of the workforce right now. A recent study said that 54% of Millennial workers said they plan to leave their job in the next six months. So, you’re going to have a huge-

Jim Fitzpatrick:
54%?

Chris Clark:
54%.

Jim Fitzpatrick:
Wow. That’s incredible.

Chris Clark:
It is. So you’re going to have this issue that I think is very different than the unemployment insurance issue. Some of those people are coming back. Many of those guys upskilled during COVID and are now going into other jobs. So you’ve got that issue. You’ve got the fact that America needs in the next six years, we need six million more workers than we have today. So there’s an immigration issue that we’re going to have to deal with. And then the third bucket is this issue of the skills that workers need are much different now and will be much different three or four years from now. So by 2025, 50% of the workforce will need complete new skills. So we’ve got to change education, technical college, university to get better skills for folks.

Chris Clark:
And then the last area, quite frankly, is businesses are going to have to reevaluate how they care for their employees, how they care for their mental health, the flexibility that they offer. It’s not just about the paycheck anymore. So we’re seeing this Renaissance of businesses paying more to start with, but now looking at all these other issues as well.

Jim Fitzpatrick:
Yeah, there’s no question about it. You brought up a good point there that employers are now stepping up and realizing that it’s almost like the unofficial minimum wage seems to be somewhere around $14, $15 an hour just to get somebody to come work for your company. The notion that you could pay them $7.25 or 7.50 or whatever the rate is, is just not going to cut it. McDonald’s workers, I saw a sign at McDonald’s said, “We pay $14 an hour,” and then a whole host of different benefits that their employees are able to get. And I think that’s kind of the new normal out there, right?

Chris Clark:
It is. I mean, we’ve been opposed to the federal mandated minimum wage for years because we said, “Let the market take care of it.” And the market’s taking care of it right now. But I talked to a small business owner. He used to pay $11 an hour for no training whatsoever. Just come to work for me, $11 an hour. He’s now paying 22 and still can’t get the workforce that he needs. And that’s in a small rural community. So I think we’re going to see businesses, at least for the next I’d say three to four years, paying those top dollars. It’s a war for talent out there right now.

Jim Fitzpatrick:
It is.

Chris Clark:
And if you don’t have a good place to work, then people will go find somewhere else.

Jim Fitzpatrick:
That’s right. Any suggestions that you’ve got for small business owners that are out there trying to get new talent in. Where can we find it? What can we do? Are there any programs offered by the Georgia Chamber that can help small businesses?

Chris Clark:
Well actually on August 25th, we’re going to host an event here in Atlanta to help address that labor crisis, bring in educators, bring in HR directors and let businesses learn from that. And that’ll be a live or virtual event. So I encourage your folks to go to GAChamber.com/events and join us there. But go to our website. We’ve got of resources out there. I will tell you one of the most important resources too, as I talk to small businesses, as they think about how to keep their employees, they want to give them better benefits, so 401(k) health insurance. So we do have plans here at the Georgia Chamber, our smart health insurance plan for businesses with less than 50 employees, and we now have a 401(k) plan for small businesses. So we’re trying to get those small businesses working together, pool their resources to provide better assets and resources for their employees. So you can get all that at GAChamber.com.

Jim Fitzpatrick:
Sure, sure. I think one of the positive things maybe that’s come out of this COVID situation with regard to small business, there’s been a number of people that have realized they can work from home, but they can also open up a business, maybe a side hustle, something that they’ve been dreaming about for some time. A number of people have reached out to us here at MyASBN.com and said, “Hey, I took advantage of being on unemployment and started a side hustle. And lo and behold, it’s now flourishing. I’m off unemployment. The company is doing well, although it’s still home-based.” Have you found that to be a trend out there?

Chris Clark:
Absolutely. We call them gig workers. They’ve got this gig and this gig and this gig, and that’s what they want. I mean, in fact, if you look at the research, Millennials, which obviously make up the majority of the workforce today, somewhere in the neighborhood of 40% of them actually have a second job or a third job or some company they run themselves. We just hired a young woman here who has a tax preparing service on the side. So yeah, I think we have to get used to that as people want flexibility, they want multiple income streams. They want more security, particularly a generation like the Zoomers, who 50% of them lost their jobs last year nationwide, they’re going to look for something to back up whatever their primary gig is and employers are just going to have to get used to that.

Jim Fitzpatrick:
That’s right. I was speaking to this young person who just graduated college, and they said, “Well, I’m looking for a two bedroom apartment.” And I said, “Well, what do you need a two bedroom for if it’s just you?” And they said, “Well, because I’m going to need an office.” And I said, “Oh, you work from your home?” And he said, “Actually, I’m not working right now, but I know the job that I get, that’s going to be a requirement of me that I can work from home. So I’m going to need an office.” And I thought that was interesting that that was already in their dialogue that no, I’m definitely going to need an office because I’m working from home. So I think employers need to listen to those kinds of requests out there, and to your point, be very flexible in terms of allowing people to work from home and getting the job done. I’m a Baby Boomer, so I’m kind of old fashioned. I like everybody to be in the office, but that’s an old way to be thinking about today’s office, isn’t it?

Chris Clark:
It really is. And I think we jump started the work from home because of COVID. If you looked at the research, the research said that by 2030, about 20% of all work would be done from home. Because of COVID, that number is now 2024, 20% of all work is going to be done from home. So businesses, I talk to CEOs every day, large company, small, they’re all trying to figure out what’s the right mix, what’s the right model. So I think you’re going to just see a lot of people experimenting, but yeah, there’s benefits of being in the office, but it’s got to be meaningful. And that’s what employers need to understand. If I want you in here, it can’t just be to sit at your desk and do what you could do from home and have the commute on top of it. It’s got to be interactive. It’s got to be purpose driven, purpose built how you spend your day and then go home tomorrow and then get all that computer work done.

Chris Clark:
So yeah, we’re going through a workplace revolution right now in America, and the only way to get the talent that you need in this talent war is to be ahead of that curve.

Jim Fitzpatrick:
No question. And it could really build a resentment, to your point, it was a great point you were making that make it very purposeful for those associates that you are and those employees that you are going to require to come into the office. If it’s just maybe more ego-driven to say, “Oh, all of my people are here and they could be doing,” because they’re going to be checking that. They’re going to be asking themselves, could I be doing this work right now from my home office? And if the answer is yes, then it builds a resentment towards that employer, doesn’t it, to say, wait a minute. Now I’m getting kind of mad here because I could do this, and yet you want me to fight the traffic in Atlanta, in many areas of Georgia to be in here. And of course, I’ve got to spend more money on my clothes and gas and things of that nature. And yet I could be doing this from my home office. Right?

Chris Clark:
Absolutely. And I think your point, you said you’re a Baby Boomer, I’m Gen X, so we were old school. We have a certain way of thinking about it, but I’m really encouraging business leaders to really rethink that whole model. I think three years ago if you talked to any business leader, they’d say, “Well, my focus is serving my customers.” We’re good at serving customers if we’re leading a business. We’ve also got to start thinking about is how I serve my employees as well. It can’t just be that I lead a team. Honestly, I serve a team. I serve my customers, I serve my clients and I’m going to serve my employees the same way. We really have to rethink business leadership top down. I told my team the other day, I might quit using the term leadership. I like servant-hood, stewardship and service much better, and I think that’s the heart that we’ve got to get to if we want to treat our employees right and have success long-term.

Jim Fitzpatrick:
I agree. I agree. Hey, before I let you get out of here, and I appreciate all the time you’ve given us here today, I very much appreciate it, talk to us about Re-imagine New Georgia Economy Tour. It sounds pretty cool.

Chris Clark:
Yeah. So we started trying to help business leaders and elected leaders understand how Georgia’s economy was changing back in 2019. We predicted a lot of stuff, but we missed COVID-19. We didn’t see the global pandemic out there. So this year we’ve gone back into the field in what we call the Re-imagine New Georgia Economy. COVID’s expedited a lot of the changes that we’re seeing, like we’ve talked about this morning, but we really want businesses to understand what are some of the global trends that are going to impact them five years from now, 10 years, 15, 20 years so they’re prepared. So this tour that we do, we’re out there, we’re asking survey questions. We’re getting feedback from business leaders. We’re going to do this for a whole nother year so that we can let our policymakers and our business leaders know, our small business owners, here’s what’s happening. Here’s what we think are the best practices.

Chris Clark:
We’ve got a great event coming up August 10th and 11th called The Future of Georgia Summit, where we’re literally going to spend two days with our audience, just listening from leaders, talk about what Georgia is going to look like a decade from now, 20 years from now. So encourage your folks to listen and join us as we go around the state. And we really want their feedback. We want that input. It’s vitally important to make sure we’ve got the right policies in place for what the next economy is going to look like.

Jim Fitzpatrick:
I encourage everybody to get involved in that. It’s great content, and it’s also a great way to support your fellow business owners out there because we all need this kind of data and this information to drive our businesses forward. And I commend you at the chamber to take this on because things like this are much needed. So Mr. Chris Clark, President and CEO of the Georgia Chamber of Commerce, thank you for all that you do there and your team, and love to have you back to get updates as we go along through the balance of the year.

Chris Clark:
Anytime, Jim. Thanks for all that you guys do.

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