Business Musings: The Sads
I had a serious case of the sads yesterday, and for once, I couldn’t pinpoint the source. I mean, I could in general. I know we’re all feeling an undercurrent of sadness at the deaths and the changes and the suddenness. It is grief, as I wrote earlier, but grief comes in waves, and sometimes I can find the trigger, for me, anyway.
I tend to have the sads on Friday, so I’m pretty sure that I count Fridays as the end of the week, and in my mental clock, another week has gone by—weirdly slowly if I think about wanting to be out of this limbo, and weirdly quickly if I count it from the last time I paid attention to what day it was.
If I had to guess as to the cause, though, I think it comes from reading the economic news about restaurants and other small businesses. I also think it has to do with a conversation that Dean and I had the day before about timing.
The response Dean and I had to this pandemic was as sudden as the changes themselves. In February, we started talking about changes, but when it became clear that the virus was here in the States, we made swift alterations to our in-person workshops. We also looked at our various businesses and their business models, cutting projects that we’d been thinking of cutting, finishing the downsizing we started in 2017 (and continued through 2018 and 2019), moved our cash reserves around, and made many other choices that seemed—at first blush—to be an overreaction.
I know some of our writers thought so, and expressed that opinion on social media or in email to us. They wondered why we were acting so quickly.
We acted quickly because once upon a time in a national crisis, we didn’t act quickly, and we lost the business we had built in less than 6 months. We went from being good managers to bad managers because the world had changed and we hadn’t seen it.
More on that in a minute.
But first, the rest of the sads.
I realized that most of my acquaintances and casual friends here in Las Vegas own small businesses. From the bar owner who—in February—took out a one-million dollar loan to buy the space where his bar was located to the interior designer who helped us with our audio setup when we moved here to the gym owner who discovered she was pregnant with her second child in January, most of the people I know take on risk in their daily lives, because that’s what small business owners do.
I also know far too many restaurant owners and employees, people who are trying to negotiate the new normal, and survive that Russian roulette of cancellations, new expenditures, and figuring out something as simple as how to translate their food from a beautiful dine-in experience to a satisfying takeout one.
Every time I pass their businesses, I feel the pressure of the day to day. Every day closed for all of them is another day of lost revenue. It’s also another day of accumulating interest and debt payments. It’s expenditures they never expected—like what to do with excess food. (Most restaurant owners I know donated the fresh food to the food bank when it became clear the shutdown would last a while.)
If the business was marginal, living (as you will) from month to month on its receipts, then that business is already terminal if not terminated.
Sometimes that’s an easy decision to make. You look at the dwindling (or vanished) receipts, do the math, figure out how long you have until the next payment(s), guess at what income you might have (if you have a business that has income during this shutdown), and then see how long you can last.
Sometimes shutting down immediately is the best solution. One of the city’s oldest restaurant chains shut down last month—and they were a local staple. I have a hunch it wasn’t just income driving that decision. It was also the age of the owners, who started the business in the 1980s, built it into a powerhouse, and then nearly lost it in the economic crisis of 2009. They saw the writing on the wall just like Dean and I did, and rather than lose every dime they’d saved, they shut the doors.
It’s almost impossible to sell a business like that in the middle of an economic crisis, so they didn’t even try.
But there are others that I look at and wonder how they’re going to make it. I’m not worried about my bar owner friend. He’s fiscally conservative, and has more money in savings than business owners usually do.
Some others are hard to fathom, like the neighborhood bookstore which has grant money backing it—will they survive? Or the barber I know who didn’t get caught violating the business shutdown order by operating out of his house. His wife worked in convention set-up and hospitality, the first types of business that got hit, and they just bought a house. So they’re hurting. But he’s super popular, so maybe…well, who knows?
It’s the gyms that really have caught my attention, maybe because we’re coming into summer, and I’d really like to have a gym so that I don’t have to get up at 5 a.m. to run before the sun gets too intense. But here in Nevada, gyms will be the last to open.
Our gym, which is a local chain, stopped charging monthly payments in March and has promised it won’t charge any of us a dime until the gym reopens. Considering that they have thousands (literally) of members and high building costs (they just finished a new location six months ago) and other expenses, I can’t imagine how much they’re losing on a daily basis.
That tick-tick-tick of days going by with no income while the expenses keep mounting up is something I feel viscerally. I’ve been there. I know how terrifying it is.
And I can see it, among my friends and acquaintances, all over my neighborhood, and all over the city. I read about it in the news, as celebrity chefs donate money to keep restaurants alive, and podcasters do pieces on business that they know are about to close. I hear about it from friends all over the world, struggling with their own landmark losses—from the once-thriving town square to the now-empty neighborhoods literally littering the entire planet.
The economists are using all kinds of models, trying to grapple with what will happen next. They’re making predictions, some of which have no basis in reality (there will not be a V-shaped recovery, people, no matter what fairy tale you want to believe), and some of which are downright scary (total worldwide economic collapse, a prediction, I think is overblown).
I suspect we’ll be in the middle of those two extremes. I also think the recovery from this disaster will be different in different regions. At the moment, Las Vegas has the highest unemployment in the entire U.S. because most of our jobs are service based. I have no idea what those statistics look like for, say, Rome (and I’m not going to look either), but I do know that we in Vegas won’t recover fully until international travelers feel safe to fly and vacation far from home. Eugene, Oregon, where I used to live, might recover faster, given the presence of the university and the city’s solid middle-class roots. The recovery there won’t be a full one, but it’ll be swifter than the one here.
Now’s the time for business owners to deal with that tick-tick-tick of daily debt. Now’s the time to accept that there will be no normal—not even a new one—for months. And that’s going to be hard.
The conversation that Dean and I had, which might have put me in the sads, was about our business in the 1990s. When the First Gulf War hit, we were a debt-free corporation that made a profit. Six months later, we were down to one unpaid employee (Dean) who struggled to fulfill the last of our outstanding orders so that we wouldn’t put the (badly designed) company into bankruptcy and lose our copyrights.
The crisis began in November. We should have done severe cost-cutting and analysis by December 1. Instead, we did some trimming around the edges, firmly believing that everything would be as normal by early in the new year.
It was that belief—the belief that things would return to normal—that doomed us.
And I’m hearing that talk all over the news, from our idiot president and his sycophants, and from some economists who really don’t deserve the title.
You can’t go through a shock to the system like this one and have no repercussions. You can’t go through a shock to the system that is ongoing with no real end in sight and feel no long-lasting effects.
The world will not return to the normal we knew in 2019. It just won’t. And anyone who bases their business plans on a return to normal will end up losing everything, like we did.
Which is why I’ve been blogging about making changes now, about planning so hard for a different world, for making the harsh choices before they get made for you.
Dean said to me in that discussion that the entire world is in December—that 1990s December. And by that, he meant that most people are acting like we did—on the hope that, after a little blip, everything will return to the way it was.
He’s right. So I looked around, saw the closed businesses, saw my friends and acquaintances, and hoped—just hoped—they were already making changes based on the world as it is, not the world as they want it to be.
That world is gone. It will not return. We are in a new place. It might even end up being a better place. (Certainly it will be cleaner.)
But it will be different. And we need to approach that difference with compassion and understanding and the realization that nothing is the same for anyone.
I guess that made me sad. But it also put me in mind of the saying in the picture at the top of this post. I took a photograph of that sign near one of our favorite restaurants which had reopened just two nights before.
It was packed—not pre-plague packed—but Summer 2020 packed, with people wearing masks, sitting outside at tables, chairs six feet apart (and diners leaning away from each other even so). Dean and I picked up takeout, the entire neighborhood smelled of baked bread and coffee, and there was life again. A bit of laughter. Some shared enjoyment.
It felt good.
So yeah, this too will pass. Like an entire mess of kidney stones. We won’t know the damage for a while yet.
But it will pass—and become a memory one day.
And frankly, for me, that day can’t come quickly enough.
I find myself writing two posts on the days I do the business blog. One is like this, mostly impressions, and the second is always about business itself. Occasionally, I put the first post on Patreon only, unless I believe that its points will make sense to a wider readership.
That means that next week you’ll find a more business-specific post (or on Patreon if you choose to go there). I have no idea how long this pattern will last, but it seems to be the way my thoughts settle before I can write about some publishing topic.
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Which I am going to say right now. Thank you!
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“Business Musings: The Sads,” copyright © 2020 by Kristine Kathryn Rusch. Image at the top of the blog copyright © 2020 by Kristine K. Rusch.