PP3: Explore The Future, The “New Economy”, & Government Updates With Steve Gross
PROSPER OR PERISH #3. Click here to read past issues.
Today we visit what’s happening on the government front, what’s likely next, and how to prepare for a different world, as a result. Let’s get at it!
What is Happening?
Four Funding events are happening at the same time with various paymasters:
- 7 (a) Paycheck Protection Program, with banks in the middle, is moving forward both rapidly (Over $250 Billion of $350 Billion available approved) and slowly (Funding just now sporadically hitting bank accounts of businesses).
- 7(b) Economic Injury Disaster Loans, with the SBA in the middle, is slowly beginning to fund the up to $10,000 grants, with approvals and issuance of loan proceeds up to $2 million, just beginning to fund.
- Main Street lending for major companies (Loans from $1 million to $150 million) is beginning to announce approvals in major sectors most hit by the Economic shutdown.
- Individual checks to consumers and workers are supposed to be issued by Friday, April 17, for most qualified Americans and their families.
What does that mean to most of us as employers and employees in the “New Economy”?
1. Things will never be the same as before.
We have learned many things about remote and virtual activities that we were hesitant to adopt in the past.
2. Personal Protection and distancing will be with us for a long while. This will disrupt many industries.
- Restaurants will have to accept fewer diners in their spaces, employees will need to protect the food and themselves while providing table service to customers.
- Hotels will need new sanitation processes and activities that concentrate people in confined spaces.
- Airlines will have to rethink air quality in-flight and seating protocols during flight and ground activities.
- Cruise Ships will need to retool on sanitation between and during cruises, and well as crowd management at events.
- Theaters will have a harder time attracting customers as we are all streaming more, and going to crowded spaces less.
- Shopping malls will have difficulty with foot traffic as we have moved even more to online shopping and home delivery.
- Commercial office owners will need to recognize that remote workers will reduce the need for headquarters space and adapt to new officing models for tenants.
- Lenders, credit card companies, and landlords will have to renegotiate terms for repayment in order to avoid defaults.
3. What is Next as we reopen the Economy?
- There will be a flood of bankruptcies, both personal and business filings.
- Many unemployed folks and those looking for work will realize they need new skills and to change industries to join the ‘New Economy”
- New companies and reinvented companies will offer work at home or be your own boss solutions that will convert former office workers into their own business opportunities to build new companies.
- Legacy businesses will have to take on massive debt to survive and that will take years to recover from and regain position before this crisis.
4. How do we prepare for a Different World?
- Continue to be cautious in your personal life to avoid contagion while the virus dissipates. It will take a while for it to recede, and business may restart before it is truly safe.
- Do not expect life to go on as before, especially in your businesses.
- Do not depend on the institutional investments of the past. Stocks, Bonds, REITs will all recover over time but are dependant on the Companies they track recovering to the prior levels in order to gain value.
- Consider adding a side business to your activities. Adding a Life Insurance license, a real estate license, or other activity that allows you to use social media, video conferencing, and other soft contacts to market value to friends and strangers can add an income stream.
- Be supportive, and creative in compensation (deferred comp., stock for comp, phantom stock for lower comp., consider loans to your employer for them to survive, options/warrants, or other ideas) to give the business a chance to rebuild cash flow.
- Overall, be optimistic in the face of adversity. It will earn you respect as a leader and you will become the indispensable one in your Company.
THIS WILL PASS, BUT IT WON”T BE THE SAME- Be on the right side of change!
About The Author
Stephen Gross, CPA, CGMA, CVA, CFE — EVP of Hegemon Holdings and Co-Founder of Trusted CFO Solutions — is a big picture thinker and connector, with 40 years of rich and diverse experience in the C.P.A., business consulting, and venture capital worlds. Steve was an early adopter and evangelist of cloud-based accounting, as well as the concept of a virtual C.F.O. or Controller as a method of outsourcing the position in small businesses and startups. Learn More About Steve…