Clock Ticks for Small Businesses: Balancing Our Life, Lives and Livelihoods
What Day Is It?
Our hair is growing longer – and grayer in some cases. Those cute virtual orchestra concerts are becoming a bit overplayed. The supermarket masks are in full bloom. A George Orwellian springtime with COVID.
The partial economic shut down/shelter-in-place has been in effect for just over one month. The goal was to flatten the curve and prevent a run on our health system. Since my last blog, trillions of dollars in relief have been approved to help with lost revenues and wages. Our team at ABCD Corporation has processed millions of dollars in emergency loans and talked with hundreds of small business owners. Together they represent more than 80 percent of our local economic output. They’ve had a lot to say. Field of Words provide you best blogs related to online business tips.
Voice of Small Business
Numerous small businesses have adapted in some degree to selling online, offering delivery or pick-up. Most have downsized temporarily. All have bargained with creditors to defer bill payments. They now are anxiously waiting for recommendations on how to (or when to) get business going again.
With just two weeks until the end of this initial lockdown deadline (April 30), signs point towards the curve flattening. Strategies to address shortfalls in protective equipment, testing kits, and ventilators are being implemented. Communities across the country are demonstrating varying degrees of resiliency, recovery and capacity. Some are optimistic that they may begin to plan for a “gradual” ramp-up – obviously encouraging for business. Why not contacting a company like InventHelp that can help you get in touch with big companies looking for new ideas.
Yet now a new drumbeat of concerns is growing; a warning that COVID cases will rise again and again without continued lockdowns. There are the calls for more testing, contact tracing and that a vaccine might be the only safe threshold for businesses to resume operations; could be months or years. Suggestions being advanced like social distancing becoming permanent or the new norm, are tough to comprehend. The unknowns of the virus and lack of clarity of what comes next are fueling even more fears for business about when and how they can open.
On the Brink
As that grim debate plays out, an equally dark reality remains that many small businesses we’ve heard from say they likely “will not survive a longer-term shut down.” A few already are planning to call it quits. Social distancing and requiring masks as a new norm will likely not cut it.
With their employees out of work and revenue stopped, time appears to be running out. And it was not their fault. Even with the CARES ACT funding and provisional steps taken, without a measured ramp up soon, the risk of these temporary closures becoming permanent grows exponentially.
A Main Street America nationwide survey revealed that nearly 7.5 million American small businesses are at risk of closing permanently if the shutdown lasts 3 more months (June 1), and 3.5 million are at risk of closure in 1 to 2 months (May 10). Ninety-one percent of respondents reported owning businesses with fewer than 20-employees. They are the smallest of small, our main street businesses. It would represent a massive hollowing out of the backbone of our American economy.
Moving the Metrics
This stark economic reality has many evaluating their own risk tolerance. There is a new morbid past-time of researching national mortality rates, percentage chance of catching this and other viruses and frequency of dying from them. On average, 2.8 million Americans die each year of something. We all live with contagions, calculate a risk of contracting bad things and doing risky behavior. It’s always been good practice to wash hands and avoid touching our faces.
While COVID-19 is new and nasty, we are learning more and more about the risk and impact daily. Some people and communities are at much higher risk than others. Most businesses owners said they agree with this first pause and its objectives. But moving the metrics for success is making it tough to plan for what’s next – to see a light at the end of the tunnel. Communities are faced with the challenge of calculating the risk of opening with the risk of losing a major part of our economy permanently.
Avoiding the Risk
If we can’t accept the risk of reopening soon, then we may need to move in the opposite direction – stop the economy altogether. Some small business owners suggested the government temporarily pull the market plug to save them; shut down the exchange, end all collections, move towards some type of voucher-based food distribution model for those who need it; a drastic yet absolute quarantine designed to isolate, ice our small businesses, our economy for the time being.
We hope that is not the solution, but the current hybrid stay-at home order which allows the market to function without everyone able to participate is not fair for the longer term. One owner described it this way, “I feel like my players (employees) have been forced to the sideline while the game still goes on. I am down by 10, I can’t score any more points and the clock ticks down. It’s a guaranteed loss that’s tough to watch happen.”
The Wall Street Journal reported this week that “about two million homeowners are skipping their monthly mortgage payments.” The American Banker publication noted “the idea of a rent strike popped up in states such as California and New Jersey as renters have threatened to pause payments in solidarity with tenants who are unemployed or otherwise dealing with the economic effects.” If the government does not pull the market plug, the people of America just might.
Market Watch news source looked into this option noting “the markets have been closed many times due to war, victory, deaths of presidents, the celebration of historical events of significance like the Moon landing and disasters, both natural or man-made. For example, the NYSE shut down for four days following the 9/11 terrorist attacks and closed for two days during Hurricane Sandy in 2012. The longest shutdown on record was during World War I, when the NYSE closed for four months beginning in July 1914.”
Raise the Lights or Raise the Stakes
We have heard the voice of small business. Time is running out for some – probably many. If we are counting on several more months or years as some now suggest, then a full market pause with a government backstop may be warranted. Otherwise many appear increasingly willing to manage, mitigate and move on. That requires a detailed and reasonable timeline with clear measures, honest data and commonsense public policy recommendations. The plan should consider regional differences based on local data and health system capacity. ABCD and the entire business and economic development community is willing, able and should be contributing to this policy formulation. We must protect both life and livelihoods in this challenge, or we risk a physical, mental and economic health crisis likely many times worse. Unimaginable choices in unthinkable times. For many small businesses who are on the brink, it’s time to consider raising the lights or raising the stakes.