An Open Letter to Small Businesses: Stay Alive

Loren Crowe

Loren Crowe

Small Business owner and advocate. Pro bono non-profit consultant

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42 Responses

  1. Avatar InMD
    Ignored
    says:

    You be strong, you survive… You stay alive, no matter what occurs! I will find you. No matter how long it takes, no matter how far, I will find you!Report

  2. Avatar Jaybird
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    says:

    The big companies did a lot of dumb stuff last time around. This will be taken out on the small companies that didn’t do anything wrong.

    Currently, the bigs are doing some very, very dumb things (Marriott, for example, is under fire for doing stuff like moving employees to a zero-hour schedule and then denying them unemployment when they file for it.)

    In addition to the various monetary relief that small businesses are going to be needing when the fog lifts, they’re going to need regulatory relief. It needs to be as easy to open a new business as to re-open an old one.

    And we’re going to need to make it a *LOT* easier to re-open an old one.Report

  3. Avatar Pinky
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    says:

    A suggestion to consumers: buy gift cards. If there are any establishments where you know you’ll spend money in the future, remember that they need cash now. Stop by (if they’re open) and purchase a gift card.Report

    • Avatar Kazzy in reply to Pinky
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      says:

      I see this discussed and wonder if/how it’ll work. Aren’t I just giving them the money now rather than in 3 or 4 or 6 months? Won’t that just prolong when they feel the hurt? Or does it work because it helps more evenly distribute the hurt? I want to do whatever makes sense but want to make sure it does indeed make sense first.

      If gift cards will indeed help, I’ll buy them. If there is something better I can do, I’ll do that.Report

      • Avatar Pinky in reply to Kazzy
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        says:

        I guess it depends on how long the shutdown lasts. If it’s more like a month than a year, then a few extra dollars right now would help keep the doors open. It’s kind of like “flattening the curve” of a V-shaped recession.Report

    • Avatar DensityDuck in reply to Pinky
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      says:

      The issue with buying gift cards is that it’s an obligation to the restaurant to give you something “for free” at a nonspecified future date. They can’t just spend the money now, unless they assuming they’ll have enough of a surplus in the future to cover whatever gift cards people bring in. And if they don’t spend the money, well, it doesn’t really do them any good to have it (except maybe as collateral for borrowing other money.)

      See, the thing with gift cards is that they don’t assume they’re making money from the card, they assume they’re making money from you coming in and also ordering drinks, and appetizers, and a more expensive meal than you otherwise might. Gift cards are advertising overhead.

      “Well, what can I do then?” Order takeout or delivery. Or put the money in a sock and go to the restaurants after everything opens again.

      Really, what these places need isn’t low-interest loans now, they need low-interest loans in the future, when they need capital right away to buy new food and fix up whatever broke in the month or two the place was shut down.Report

      • Avatar DensityDuck in reply to DensityDuck
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        says:

        In fact, given how the whole “write everyone a check” is turning out to be “actually we are giving you an advance on next year’s tax refund”, you could consider buying a gift card to be the equivalent of that. I’m not giving you money, I’m letting you borrow it, at zero interest but with repayment coming when I feel like it…Report

  4. Avatar Saul Degraw
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    says:

    SF is on stay in place for at least three weeks. My guess is that it will end up being longer. Our governor already predicted that schools might not reopen until the fall (which is August in California).

    Restaurants, bars, and wine shops are trying to do the best they can to stay open. Our favorite wine shop announced that you can call in orders and then go pick them up. Another restaurant I walked by yesterday was doing take out but not letting anyone in. They had a table at the door blocking people. Others decided it was too much hassle and were shutting down for a bit. To be fair, most of the places I saw do this were bakeries or restaurants where take out is hard like hotpot and they might not be included in essential services.

    The article listed below states this might be an 18-month pandemic with widespread shortages. Essentially you have public health officials and politicians (usually Democrats or in blue states but some exceptions like Mike DeWine) taking this very seriously and making the tough decision to crash the economy in order to save lives. And then you have Republican governors and red states acting like COVID truthers and being cavalier about spreading the disease and still treating it like a cold.

    I don’t think that we can continue with stay in place for 18 months, I think 8 weeks is the most we can handle probably. But it is going to be fascinating and terrifying to see how this all plays out:

    https://www.nytimes.com/2020/03/17/us/politics/trump-coronavirus-plan.htmlReport

    • Avatar Pinky in reply to Saul Degraw
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      says:

      I’m thinking three weeks. That would be long enough for people to tell themselves “I don’t have it”. Maybe until Easter. At that point, if there’s any shortages or lack of confidence (or even lack of an end point), you’ll see more frequent violations, or potentially things start to turn ugly.Report

      • Avatar DensityDuck in reply to Pinky
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        says:

        Considering that it typically takes two weeks to show symptoms, I’d say that “shelter in place for two weeks” is a de facto COVID-19 test…Report

        • Avatar Dark Matter in reply to DensityDuck
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          says:

          I’m thinking three weeks

          I would guess more like 10. My boss said to work from home until July 1st.

          In three weeks, while we’ll have some control over some aspects, it will have spread and the underlying problem will remain the same. Without a serious vaccine, we need to have millions of people get it, get over it, and become immune.

          Let everyone out in 3 weeks and the people who don’t know they have it will spread it and we’re back where we started.Report

    • Avatar George Turner in reply to Saul Degraw
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      says:

      The San Francisco shutdown worries me because I’m down to one remaining box of Rice-a-Roni. With production now cut off, inventory is going to run out very quickly.

      I stretched my previous box with a little bit of extra basmati rice and a few strands of fettuccine, and I suppose if things get desperate I could mix my own rice, pasta, and chicken bullion and see how it comes out. But either the President, governor, or San Francisco’s mayor need to prioritize production and treat it as a vital national necessity, doing whatever it takes to keep the manufacturing plant running.Report

  5. Avatar JS
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    says:

    I suspect the simplest, easiest, and most effective thing to do would be to open up unemployment.

    Have the Federal Government backstop unemployment payments for the duration of this crisis, and open up a new ‘lane’ of unemployment — anyone furloughed, laid off, pink slipped, or on unpaid leave, as certified by their employer, becomes eligible for unemployment. Suspend job-seeking requirements — there won’t be jobs as effective unemployment jumps 20% or so as the entire service industry grinds to a halt.

    Even if technically still employed, just not being paid because there’s no work. No need to fire waitstaff you want to come back when this is over, for instance. Just certify you’re shut down and they can’t work. Add in some real harsh, nasty penalties for fraud and audit when things are over.

    That means money will flow through already established channels and financial infrastructure directly to the people who need it. No need for writing universal checks to the entire adult population when you can use the already created mechanisms to send money to those who are actually out of work.

    Through websites and bureaucracy that already exist.Report

    • Avatar Road Scholar in reply to JS
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      says:

      Colorado seems to have done something like this. My son-in-law got laid-off from his restaurant job in Denver. The restaurant is still operating in takeout/delivery mode but cut all the dine-in waitstaff and it was a last-in first-out thing and he had just started there a few weeks ago. Rotten timing.

      The UI website for applications was overwhelmed and effectively inaccessible for the first week but when it came back up the first question was “Are you laid off due to coronavirus?” I forget the term they use but it’s like zero-hour employed or something. His employer guarantees his job when this is all over and in return the waiting period and job search requirements are waived. He gets 75% of his normal take-home for however long this takes.

      That seems just about perfect to me. Really, governors are stepping up here.Report

  6. Avatar Carl Schwent
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    says:

    This is exactly what a beloved local restaurant chain has done: https://katu.com/news/local/mcmenamins-lays-off-3000-closes-oregon-and-wash-locations-due-to-coronavirus .
    And almost what a more famous bookstore has done: https://www.portlandmercury.com/blogtown/2020/03/15/28149232/powells-bookstores-closed-until-april-due-to-covid-19 . (Notice also the cry for help from what is a free weekly alternative newspaper.)

    It also occurs to me that these small businesses have lease payments (or mortgages) that will still bankrupt them even without payroll.The landlords really need to forgo or forgive payments. Sure they’ll lose money, but if they evict they lose the same money and have almost no chance of getting another tenant for a long time.

    I’d feel sorry for landlords except for two things. First, I’ve seen lots of commercial space stay vacant for years, even during good times, because the owner wanted higher rent or was fine with just appreciation.

    Second, I’m a landlord. Much of my retirement income is from rental houses. As I write this, I’m realizing I need to call my property manager and tell them to do whatever they need to keep people in the houses. Delay rent, cut rent, drop it to zero: but don’t evict anyone. From past experience, I know that whenever a house goes vacant there will be thousands in cleaning and repairs, and when the market is slow, I’ll have to cut the rent because for every month it is vacant I would have been better off for the year to have cut the rent by 8%. I can do arithmetic. Unfortunately many landlords and banks don’t seem to be able to.Report

  7. Avatar Dark Matter
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    says:

    This whole issue is why I seriously question whether we’re handling this correctly.

    Shutting down the economy is going to get people killed via various indirect methods, social issolation will increase suicides, lack of money will decrease medical care access, lack of excerise will cause other health problems.

    If the virus kills 5 digits worth of people then we’re in “flu” territory, and we could easily end up with killing more people via the panic reaction than the disease.Report

    • Avatar Chip Daniels in reply to Dark Matter
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      says:

      What would be the economic cost of not flattening the curve?Report

    • Avatar InMD in reply to Dark Matter
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      says:

      Just keep in mind to make that argument you have to account for indirect deaths i.e. people with other acute conditions who under normal circumstances would be saved but can’t be because resources are allocated to covid 19 patients.Report

    • Avatar Chip Daniels in reply to Dark Matter
      Ignored
      says:

      P.S.
      Here is the study which caused the Trump Administration to change their course:

      https://www.imperial.ac.uk/media/imperial-college/medicine/sph/ide/gida-fellowships/Imperial-College-COVID19-NPI-modelling-16-03-2020.pdf

      Nut graf:

      In total, in an unmitigated epidemic, we would predict approximately 510,000 deaths in GB and 2.2 million in the US, not accounting for the potential negative effects of health systems being overwhelmed on
      mortality.

      2,200,000 people dying within a few months. Quite a bit outside of “flu” territory.Report

      • Avatar George Turner in reply to Chip Daniels
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        says:

        For comparison, in WW-II the UK suffered a total of 450,000 civilian and military deaths and the US suffered 420,000, and that was stretched out over a span of years.Report

        • Avatar Chip Daniels in reply to George Turner
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          says:

          Right, and these deaths are in addition to the things people are comparing them to.

          Meaning, people aren’t going to die of the virus instead of cancer, or auto accidents, or even the regular flu;
          People are still going to die of these things as well, except the hospitals that would have treated them would now be overrun and operating on triage.Report

          • Avatar Dark Matter in reply to Chip Daniels
            Ignored
            says:

            Meaning, people aren’t going to die of the virus instead of cancer, or auto accidents, or even the regular flu;

            Yes and no.

            Auto accidents you’re correct. For cancer and the flu much less so. This virus targets people who are already very old and very sick. I would think this describes nicely people who would tend to die from the flu and from other things as well so there should be a fair bit of overlap.Report

      • Avatar Dark Matter in reply to Chip Daniels
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        says:

        Thus far we’ve had between 25k and 55k people die of the flu, and my evaluation was this virus would need to be at least 6 digits worth of people (100k+) and better yet 7 in order for it to be worth treating seriously.

        So thank you, great link. Very well done.Report

        • Avatar Chip Daniels in reply to Dark Matter
          Ignored
          says:

          So the economic consequences of upwards of 2 million people dying within a few months, and hospitals overrun would be…?

          Even if the government didn’t order bars closed, at what point would public panic set in and people self isolate in fear?Report

        • Avatar Stillwater in reply to Dark Matter
          Ignored
          says:

          and my evaluation was this virus would need to be at least 6 digits worth of people (100k+) and better yet 7 in order for it to be worth treating seriously.

          So, mitigation efforts designed to prevent a million people from dying are justified only if there are in fact a million deaths? This is incoherent.Report

          • Avatar Dark Matter in reply to Stillwater
            Ignored
            says:

            6 million people is 7 digits.
            100k is 6 digits.
            55k is 5 (what we think the flu has killed this year).

            My point was the disease needed to be significantly worse than the flu in order to justify what we’re doing to the economy.

            Chip has shown that it is, I’ve conceded the point.

            And my point was hardly incoherent, the overall death rate holds steady at 100%. A disease sweeping in and killing people who were already going to die the next time the flu comes around would hardly justify making the entire country not exercise and thus making obesity and heart disease worse, much less an unemployment rate of something like 20%Report

    • Avatar Stillwater in reply to Dark Matter
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      says:

      Trump tried to treat it the way you want to, Dark. He lied about the severity, falsely claimed he was shutting down borders when he wasn’t, tried to keep people from being tested because this is just like the flu.

      Now he’s calling for an $850 billion stimulus/bailout infusion on top of … uhhh … lamenting that medical providers (somehow!) still don’t have sufficient tests or medical equipment.

      You can question the rationality of the approach every expert is advocating, but if you were pulling the trigger on mitigation efforts I guaran-goddam-tee you you’d be doing the same thing all the Governors you think are over-reacting are doing.Report

  8. Avatar LeeEsq
    Ignored
    says:

    This is one of the situations where there is no good solution. Let’s assume that Covid-19 is just as deadly as the scientists and public health experts warn. If these heroic measures work we would have saved millions of lives. People aren’t going to register that though. They are going to see the lack of overwhelmed hospitals and millions dead as evidence that Covid-19 wasn’t so serious and we wrecked the economy for nothing. However, if Covid-19 is deadly and we did nothing than in addition to millions of dead people, and all the disruption caused because of that, we would have even worse economic and social problems. So it’s damned if you do and damned if you don’t because we are dealing with something we can’t see and don’t want to see.Report

  9. Avatar Rufus F.
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    says:

    I agree with all of the original post.

    As someone who sort of “co-manages” a tiny record store, I can say we’ve had to shut down and get creative- but first shut down. What we’re doing is PayPal to hold records. They’ll be here when we reopen and, in some special circumstances, people can pick them up. But, mostly, we’re an online business now.

    The thing is we have a good landlord. He’s a flake, but a patient one. We’re off a street that became “hot” and once it did, the restaurants without 5-year leases saw their rents increase quickly and seriously. Now, they have to close indefinitely. I just hope their landlords get smart too.Report

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