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Prosper or Perish #10: With PPP Ending and an Expected Downturn Coming, Here’s How Your Business Must Shift To Emerge Stronger

PROSPER OR PERISH #10 by Stephen GrossClick here to read past issues.

PPP has now run its course, and EIDL loans are still working their way through the SBA.  We are hearing that D.C. is planning a more targeted relief package for the summer or fall, but details are sketchy.

Covid-19 is accelerating again, caused by a reaction to partial and full re-openings after a three (3) month lockdown. We haven’t learned discipline to wear masks universally or distancing from others, and we are seeing groups gathering in protests, at the beach, at bars and clubs, most not wearing masks, in close quarters, and ignoring risks.  This will result in increased infections, hospitalizations, and consequently deaths.

The Pandemic is not over.  Either our behavior must change, a vaccine developed, or other protocols developed to minimize the strength and danger of the virus.

Business Consequences  

  1. A wave of bankruptcies is in our economic future:
    • Hospitality will suffer losses, like resorts, hotels, restaurants, support companies such as food distribution, subcontractors, and supply companies.
    • The travel industry is taking a hit. Destination towns and resorts will all suffer from lower revenue from sales taxes, hotel taxes, and other revenue sources.
    • Commercial real estate will be reset as malls, offices, restaurant landlords, and lenders to this space deal with lower revenue and missed payments from users.
    • Municipalities will be hit hard with lower tax revenue and fees. Budgets will be pressured, and taxes will have to go up, or services down. This also ignores growing pressure on budgets for over-generous and un-funded pension plans that must be funded.
  2. New players will enter the scene as existing owners are replaced by owners that don’t have the accumulated debt causing bankruptcies.
  3. We have learned to work from home or remotely, so many will not return to their offices, and many others are moving out of the dense cities to suburbs or neighboring cities to get away from virus danger.

Transition & Uncertainty

We are in a period of transitions.  To what is now uncertain, but we know that our business and personal lives will not be the same, in two months, six months, or a year.

Business Actions Needed

Our recommendations for your business include the following actions.

  1. Conserve cash.
  2. Lower expenses.
  3. Take great care of your employees and customers.
  4. Stay vigilant to avoid risk COVID-19 transmission.
  5. Look for new opportunities to take advantage of our “new normal”.

About The Author


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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…

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