Ricochet is the best place on the internet to discuss the issues of the day, either through commenting on posts or writing your own for our active and dynamic community in a fully moderated environment. In addition, the Ricochet Audio Network offers over 50 original podcasts with new episodes released every day.
12 Weeks
This is approximately how long my business can run with no revenue on the amount of liquid cash assets I have on hand. 12 weeks. What is at the end of that 12 weeks? Unknown. At that time, will we be in a recovery phase enough to plod on? Will sufficient revenue return to dig out of the pit of the Wuhan reckoning? Will there be enough cash left to pay the IRS in July? Or will 12 weeks result in little change and I just walk away and lock the doors, let the bank have my building back, wish my employees well in their lives and bid adieu to 15 years of sweat equity?
My husband and I work together…we often tell how we started our business in 2005 with two laptops (bought on credit), a donated desk ,and a card table in a shared office space. I left a job in government with a guaranteed paycheck and benefits to join my husband on this adventure. (Our four young children at the time didn’t know how lean those years were.) We started with no employees, existed on a bank credit line, then hired one employee, then two, rented our own space….survived 2008-2010 recession…hired a third employee…bought our own building….hired more employees…opened additional locations…hired more employees…plowed our “profits” right back into our business in salaries and development and hiring of staff, expansion, and buying goods and services from other businesses.
Last year, our business supported 18 families and put $1M in payroll into the pockets of our employees. My husband’s 2014 Chevy has over 200,000 miles on it from going hither and yon to support the business, and he and I work six days a week most weeks. While with us, our employees have supported their families — they have had babies, sent kids to college (and graduated them!), taken a real vacation for the first time, helped their senior parents, bought their own houses and quit renting. We are a “work family.” Three employees will be let go this week, two others will be asked to go part-time. In 12 weeks, my work family could be torn apart.
At the end of the day, my husband and I will be ok together. Our children are all young adults now – one in the military, two in college, and one in trade school. They will survive too. I am grateful for the ride we have had and am proud of what we have done together. I hold out hope that this will pass and we can continue. Whichever way it goes, I’ll know more in 12 weeks.
Published in Economics
Meanwhile, the fools in Washington (and most likely your state government) bray on, playing fiddle while Rome burns. Your life (and the lives of countless others) are not statistics; they are not hypothetical causalities on a bar graph. They are real, and they are being destroyed. God bless you.
I hear you. Self employed don’t have even unemployment to fall back on, it’s the bank account. My husband and I discussed how long we can go without income also. Not months, maybe 2. Then our cash runs short. We don’t just have our home, we have the business expenses that do not stop, like mortgage, insurance, utilities. Most people work for someone, it seems, and there is a reason for that. In order to start a business and have it last any length of time, like you said, you have to watch cash flow, and put money back into it. If you sell off the shelf, you have to replace that item, so the sale is not pure profit. And you cannot turn to government to replace lost income. They are talking loans, not free money. If unemployment was a loan, it isn’t.
THESE are the stories everyone needs to hear. Some major media player needs to highlight them daily. Maybe Tucker? Rush?
We pray nightly for our leaders to be blessed with prudence, humility and fortitude and yet we have people like the now inarguably craven Nancy Pelosi pulling her stunts and I worry there isn’t enough grace in the world to redeem these amoral figures. Please, G-d, guide us through!
I cringe at the thought of having to deal with this shutdown when I had my business. Good luck and God bless.
Good luck! I really hope you dont have to press the limits of your reserves. I think we’ll be in a completely different world, in 2 – 3 weeks. I hope that the worst of this will be over, and we can start to re-open and return to a normal.
I pray you’re right. And DP, I’ll be praying for you and your family and your employees and their families.
I’m in the same boat, sadly. Been running my own firm for 25 years. Made it through 2008 in one piece. The hardest part will be losing members of my work family, and I hope it doesn’t come to that. But my reserve is going to dwindle pretty quickly if nothing comes in. Good luck to you.
I’ll be praying for you too.
I’m praying for you and your family. My dad started his own business when I was a baby. He left a stable job to take that risk with a wife, three little kids, and a mortgage. I remember he and Mom tucking us in bed at night, then going back to work. My mom eventually joined to help him as secretary. They struggled financially to break through but never let on to us kids things were hard (a lot of second-hand stuff, but we didn’t care!). They almost got stuck in a Chicago parking garage because they didn’t have the money to get home! People often forget the business owner takes all the risk. They not only have their well being at stake, but are responsible for the livelihood of employees (and their families) too. Blessing to you and your family.
Is anyone keeping track of the business deaths due to these virus measures? No one likes to use real lives in a trade-off, but this is a case where economic impact to families should be a factor in determining appropriate measures vice extreme measures . . .
Well, the word has gone out to the affected employees. I have never laid anyone off before, and luckily, have only had to terminate for cause twice. This sucks! Three employees took it remarkably well and one was very emotional and angry. I didn’t sleep well last night and I worry that we are overreacting. Then I look at the numbers including fixed overhead, continuing payroll as well as the pending work that has been cancelled already and the lack of new clients on the calendar and I think we are doing the best we can to survive. The situation may not be over and other employees may be let go if this draws out.