The new economy is going to be challenging for all types of businesses
How businesses operated before Covid-19 and how they will operate after is almost two totally different worlds. For those business owners who are having difficulty dealing with everything, I recommend a very short read by Spencer Johnson, M.D. “Who Moved My Cheese”, which deals with a changing environment and how some people cope, and others do not.
Today’s environmental information shows that with almost 38.6 million Americans out of work and the Government PPP loans which are allotted a ratio of 75% towards employee retention and the remaining 25% towards other business expenses is just not enough to help sustain many of today’s small businesses. With business’s customers under lockdown many small business are facing a 75% or even a 95% reduction in their income revenue which leaves little or zero to pay their landlords, even large corporation like StarBucks is asking for rent deferment from their landlords due to their reduced income.
Then on the flipside there are some corporations like Facebook who are allowing there employees to possibility work from home indefinitely. This is a changing landscape for today’s businesses, as well as for the corporate landlords who will also show a decrease in their revenue stream as more and more companies see the benefits of having their employees work from home versus renting office space. The possible savings that an employer could receive by having their employees work from home could be, the obvious rental costs, then insurance, utilities like gas & electric, office cleaning services, office perks like coffee and bottled water, rental of office furniture & equipment, security, and the list goes on. There are many stakeholders who will feel the affects as corporations move their business offices to a work from home environment.
Then as more corporate landlords put pressure on their lending institutions to cut them a break on their loan bills because their renters are not paying their rent, now the banks come under pressure from decreased revenue. The banks will turn once again to the Federal Government for a bailout, which the Government will then sell more bonds to the open market to cover the US debt.
The changing landscape of today’s business world needs a keen eye and the economic knowledge to navigate along with the ability overcome the pitfalls that this pandemic has created.