519-646-2222How’s Biz?
That’s a question that I ask a lot of people in casual conversation – “hey, how’s biz?” the answer usually tells me something about the nature of their business or the seasonality. Lately though it has been a tough question to ask, business owners have trouble reaching for stock answers – “we’re really busy” or “this is the time of year we focus on maintenance”. The majority of small businesses across Canada have been suffering as a direct result of the great lockdown.
Even businesses that seem to have endless supplies of customers have been struggling. Doctors, Dentists, Physiotherapists, Chiropractors, in fact the whole health care industry virtually shut down for months. The media’s, so called “front line heroes” have been taking a forced hiatus. The restaurant and hospitality sector has been particularly hard hit with many restaurants permanently closed. The insolvency industry itself has taken a huge hit with estimates of between 50-80% less business than normal.
Banking is busy, people are still buying homes, some from pre-lockdown contracts, and small businesses are lining up for the government $40,000 loan programme. Consumers are self liquidating, adding more debt to their mortgages or cashing out investments to bridge the gap. Some new ventures have grown out of the lockdown – like fog disinfecting, mask and plexiglass shields manufacturing. Yet many others won’t coming back.
Some folks profited from the CERB, either people who were double dipping with other benefits they received, or those who made more money from CERB than they made from, pre-lockdown, part time employment. As things are starting to ease back, the government and the media are sending us mixed messages, “Stage II reopening” leads people to think “phew, we’re getting back to normal” but the new mask mandate throws us back into lockdown even deeper than we were 2-3 months ago.
Fear and panic have divided the country between pro-maskers and anti-maskers as well as vaccine optimists and vaccine skeptics. The fear as well as the extra money people have been making from CERB are not motivating them to return to work. Some small businesses took out government loans to stay afloat and are now finding their staff unwilling to return to work. For some it’s simply fear of infection but for others the wage is a disincentive, compared to the money they make staying home.
Throughout the lockdown, habits have been changing, people have been shopping less, both in person and online. And, of course there has been less eating out at restaurants, albeit takeaway has increased. Gym memberships put on hold, no social events, theatre, cinema, concerts, etc. Spending less is not a bad idea for most people, but the impact on business has been immense. The cinema industry alone generated $3,500,000,000 in 2017 – that industry alone has lost at least half of that revenue so far this year.
The CBC reported the federal government has spent about $930,000,000,000 on the lockdown so far, that equates to about $8,378,378 per confirmed case or $105,025,409 per reported death – not that any value can placed on a human life, but that shows the immensity of the government’s financial response. The loss of revenue for small businesses remains to be tallied but it was reported in the media that small businesses have taken on $147,000,000,000 in additional debt as a result of the lockdown – even in the face of reduced revenue.
So, how’s your biz?
If you are struggling to stay afloat, a proposal to creditors may be just the boost you need to keep things going until we see a real economic uptick, probably after the fall election.