I don’t know about you, but I could use a healthy dose of boring about now. Wouldn’t it be nice to switch on the TV and learn that Trump was a secret Russian asset, or about how the Astros cheated at baseball or maybe even watch a story or two about climate change? Ah, 2019, if we had only known how lucky we were “back then.” The good old days…
Turn on the news today, and you’ll only hear about one of two things – COVID or some version of systemic racism run amok. Does anything else exist? Did every other American story or activity suddenly become inconsequential? If I didn’t know better (but, alas, I do) I might be led to believe that all of these “news” media sources had a common agenda.
As business owners, we’ve been on a roller coaster ride over the past 18 months. For many of us, 2019 was a banner year. 2020 is a whole other story. Conditions vary widely across the country. If you live in Covidfornia (see my blog post), it’s a whole lot different than if you live in South Dakota, or Nebraska, or Tennessee. Regardless, for many of us we are doing our best to adapt to the “new normal,” whatever that turns out to be.
In July and August of 2020, to use Grandpa’s phrase, “the chickens are coming home to roost.” The first two rounds of government stimulus money are running out. Millions of people will not be able to pay rent in August. The extra $600 from the Feds in unemployment checks is ending. People can only hold on for so long. Yes, the economy is rebounding, but just as it’s coming back, Blue State governors and mayors are closing much of it back down.
I’m sure you’ve heard the phrase, “the real estate market is local.” In 2020, this analysis now applies to the economy. As business owners, we must be keenly aware of our city, county, and state economic conditions.
New York City, God bless you guys. A recent article from the New York Post argues that fully one-third of New York City’s 230,000 businesses may never reopen. Funds required to restart, pay back rent, and buy inventory are simply exhausted. Business owners of color are especially at risk. Perhaps only 40% of Manhattan’s office workers will return by year’s end, and maybe only 75% of them will return full time.
U.S. Small Business Administrator Jovita Carranza says that 84% of the firms that received PPP loans will exhaust that funding by the first week of August. Only 16% of the recipients surveyed say that they will be able to maintain their payrolls without government aid.
California is headed back into lockdown mode. Texas has rolled back its reopening. Florida is teetering on the edge of a COVIDtastrophe. Nevada is hurting beyond words to describe – casinos are sputtering along with limited tourism.
Freaking bleak, right? But not everywhere…
The Intermountain West, where I live, is humming right along. Yes, we’ve been hit too, but economic life is near normal. Midwestern states (with exceptions) are on solid footing. Tech jobs continue to create pockets of prosperity. All across the U.S., we see areas where the economy is rebounding and vibrant.
As I write this blog (July 21st), the Feds are considering yet another round of stimulus. Will the President and the Congress get another bill passed? Odds are that they will, but this is no longer a lock like it was in April.
So what do you do right now? Where do we go from here?
KEEP IT VERY REAL. Don’t kid yourself. Resilience and determination are required, but now is not the time for unrealistic optimism. If where you live is making it impossible to run a business, cities like Portland, Seattle, Los Angeles, and New York City come to mind, consider taking your lumps and relocating. I’m not calling for a mass exodus from the cities, but I am saying put yourself and your family first right now. Hoping that politicians who have long abandoned you will magically see the light and come to your assistance is wishful thinking. You know your business, your customers, your city. Hopes and dreams fuel us, but perhaps you are better served pursuing those hopes and dreams elsewhere.
IF YOU CHOSE TO STAY, FIGHT LIKE HELL. If you’ve considered all your options and you believe in your enterprise and can see a way through the fog, don’t expect business as usual to cut it moving forward. You need to communicate with your customers like never before. DOUBLE your advertising and sales efforts. The competition will be fierce. Become much more active in every way – personal contacts, social media, etc. Be ready for your profit margins to shrink. There will be opportunities, you know that, but do not expect someone to flip a switch and magically make it 2019 again.
You are the backbone of America. I know how hard you work and how much you want to serve your customers and help your community. That said, during these troubled times, put yourself and your family at the top of your priority list.