Friday, May 15, 2020

Small businesses will not wait

In my view, phased re-openings will be widely ignored, and virtually all retail and other small businesses will reopen in a matter of weeks, if not days.

A few moments of thought and a working knowledge of human nature illustrate why this is so.  Suppose that you own a small business that has been deemed non-essential and has been closed by your governor - anything from a jewelry store to a hair salon to a tavern.  You have been shut down for two months, your financials are upside down, your employees have been furloughed and may not be coming back, and your customers are upset about your being closed and are highly motivated to resume doing business with you as soon as you unlock the door.  Further, suppose that your business is not the only jeweler / hair salon / tavern in the local area; one or more direct competitors of your business are within easy driving distance of your clientele.

In those circumstances, whoever opens first wins, and whoever opens last loses.  If your hair salon stays closed for two weeks while your competitor a mile away is open, she will be booking appointments from open till close, seven days a week.   Some of those clients booking appointments with her are *your* clients - or were.  For a business that depends on repeat customers, the thing which never, ever can be allowed to happen is for your customer to sample the goods or services of your competitor down the street, because some of them inevitably will like what she did to their hair more than what you do to it. 

The groundwork for this dynamic is being laid in my local area.  The Wisconsin Supreme Court has put an end to Governor Tony Evers' stay-at-home order (it seems Evers' emergency authority doesn't allow him to unilaterally extend the order).   Restaurants and bars in Wisconsin have reopened, and video in this news story suggests that the bars are doing a brisk business already, with social distancing strictly optional. 
Folks reacted quickly, eager to return to their favorite spots. Some owners that did decide to open put more cleaning measures in place, and are happy to reopen.
"After my employees haven't been paid in two months -- I had to look out for them and their families and I had to look out for my business," one business owner said.
Business owners in Richmond, Ill., in McHenry County said they're at a disadvantage competing with establishments across the border with restrictions still in place in Illinois.
"We are so close to that Wisconsin border," said Connie Larson, owner of Hammer & Stain do-it-yourself shop in Richmond. "I could take a 20 minute walk and be in Wisconsin."
Gina Garbis runs Richmond BratHaus, which has been relying on curbside pickup and delivery. She wondered what it will mean for her family-owned restaurant with a dine-in experience now available in a neighboring state.
"Similar businesses are less than two miles away, across the state lines," she said.
McHenry County mayors and village presidents say their county should not be grouped in with Chicago and Cook County in Governor Pritzker's reopening plan.
"When you are in here in the town of Richmond, Illinois, a border town, population of about 1,700 people, to be lumped in with the city with millions and millions of people, it is kind of difficult," Garbis said.
I have seen, in media reports, a number of small business owners piously proclaiming, "Even if the governor reopens the economy, we're going to stay closed until it's safe."  Don't believe them. 

18 comments:

  1. Businesses that depend mostly on young people may do well at the start. Businesses that depend on old people may do well until their clientele starts dying.

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  2. It turns out that in Wisconsin, the state that was the first "laboratory of democracy," nothing but the Republican Party can make decisions in emergencies. I'm sure Fighting Bob LaFollette pumped his arms and shouted "yes" in his grave. Democrats there had better not play with matches.

    If they open, will they come? As Jean pointed out elsewhere, Gallup reports that "46% of Republican or Republican-leaning voters said in mid-April they never wear a mask compared to 18% of Democrats or Democratic-leaning voters." I suppose the Rs will come. Maskless. NPR just had a story about the people who took strong social media stances on the phoniness of the pandemic and then died of it, leaving their families to be tormented on line by masked "told you so"s. One family called off the funeral lest the service be trolled.

    So I express no opinion. But I will never set foot again in a local restaurant that has been encouraging the unmasked showoffs. And, as I said about church, I won't be going anyplace the governor opens until either Dr. Fauci says "go" or Gov. DeSantis gets his Ph.d in epidemiology.

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  3. It's possible that the fellow who invents a way to drink beer through a mask will make a fortune. (I guess the drinking straw solves that problem?)

    Maskless yahoos with semi-automatic firearms aside, I think the suffering of small business owners is genuine. Public officials need to weigh that suffering against other other, perhaps even worse, suffering (e.g. being on a ventilator for weeks at a time).

    To make the consideration more complicated, the economic suffering is in the present and is certain, whereas the the medical suffering is in the future and is only possible, not certain.

    And then there is the factor that, in many municipalities, small business owners are organized, visible and vocal (and some undoubtedly contribute to campaigns) whereas those most vulnerable to COVID-19 are warehoused in nursing homes.

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    1. But, Jim, we are shunning straws to save the ocean.

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    2. I have a reusable metal straw. Doing my bit up here in Sodom by the Sea on the Left Coast.

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  4. Jim, I think you're right about the small business owners having to open fairly soon. I am already seeing a little of that here. I have seen no unmasked people making a point in our town. Pretty much everybody is wearing a mask everywhere and observing distancing. I think a gradual reopening could safely take place if people continue to be careful and responsible.

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  5. I do feel for business owners. They need the revenue to stay viable. But many don't want the notoriety of flouting state/local regs, nor do they want the army of contact tracers (that we are being promised in Michigan) to identify them as some type of Ground Zero for new cases.

    I think the incentives to take precautions and to err on the side of caution are pretty strong.

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    1. Jean, I think those are good points. I also believe those owners who have said they don't wish to risk the health of their families, their employees and their customers. But the pressure to reopen gets ratcheted up when everyone else along the strip has reopened.

      I expect that business owners will try to thread the needle of these conflicting objectives the same way churches will: tape on the floor to reinforce social distancing; Purell and disposable masks at store entrances; reduced hours; new restrictions for the shopping experience. The result will be less revenue than the pre-COVID days - but more revenue than they're getting now.

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    2. I don't disagree. But I would add that businesses may feel pressure to open and then fold if they pay staff and invest in stock, only to have customers stay away because they don't feel safe.

      My hair cutter has sent texts to everyone a couple of times during the shut down, in part, I think, to gauge how many of us are antsy to get back in the chair, and how many are likely to put off going in.

      Our farmer's market is opening in schedule Saturday. The director set up a FB page with plans, maps, and safety expectations, with a fun coupon drawing every Thursday.

      A local cafe has stayed in the public eye by advertising takeout and offering free food to covid test site workers. As they ramp up to opening, they posted photos of the eight brand new and socially distanced picnic tables they will offer diners.

      My guess is that communication is going to be critical to successful reopenings.

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    3. I have noticed that the garden centers and greenhouses seem to be doing a brisk business. One of the ones in Omaha was interviewed on tv and said they had four times the usual sales. It's probably a good thing; I have heard that getting out in the sun helps build up people's vitamin D and immune systems.

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    4. People are also itching to get out camping, and are giving Parks and Rec fits. Right now they are only allowing self-contained type of RVs or trailers on the sites; that have their own bathrooms and ability to carry a water supply. Because they don't have personnel or supplies to sanitize the restrooms and hook-ups like they would need to now. Some of which are just outhouses anyway. But it's provoking howls of outrage and accusations of elitism, because of course that type of RV are expensive.
      Also there's been a little Nebraska/Colorado friction out at the western end of the state. Colorado saying we don't need all the out of staters crawling around and bringing germs in. Western Nebraska saying, fine, we don't need all the druggie Coloradoans hogging all our Lake McConaughy camp sites.

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    5. "that type of RV are expensive." "they don't have personnel or supplies to sanitize the restrooms and hook-ups." Those two thought fit together nicely because the owners of the former oppose paying taxes to provide for the latter."

      Just one of many examples of how money talks and poor people pay for what it says. You'd think the poor people would notice.

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  6. Katherine mentioned "elitism" above. Pandemics never hit everyone equally. Small businesses fold quicker than big ones, more poor people lose jobs than well-off ones, and the rich can afford to seek medical attention earlier and to hire people to take their risks for them.

    The Washington Post had a bit about how a vaccine, when/if it comes, will be more available to some than others.

    Maybe a topic for the pandemic aftermath, but how well did our leaders (not just political leaders, but religious, medical, institutional, etc.) try to level the effects of covid across socio-economic strata?

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    1. Yes. I should have read what you wrote before I wrote what I just wrote.

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    2. Tom, here are the excerpts from Defoe's Journal of the Plague Year (1665) I did for my book group. You had expressed some mild interest in this project, and it doesn't take much to encourage me to engage in shameless self-promotion! https://www.librarything.com/topic/318666

      Defoe talks a lot about the way the poor both disproportionately suffered from and contributed to the spread of the plague.

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    3. Jean, very interesting! I haven't finished the whole thing yet, but some disturbing parallels to our present situation. Of course the human toll was the worst, people not being able to bury their dead properly, and really not knowing what caused the disease. But I thought it was also sad that people were forced to kill their dogs and cats. I guess cats were more susceptible than dogs to the plague, which is also the way it is with COVID. I wonder if cats are more genetically similar to humans.
      I notice they were also practicing things such as minimizing the handling of money, and buying goods without touching the shopkeeper.
      You should do a post on Defoe's journal sometime.

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    4. Also brings to mind John Clyn, OFM, who wrote an account of the plague in Ireland, circa 1349.

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    5. I was very impressed by Lord Mayor John Lawrence's dedication, oganization, and compassion. Alas, Clyn is in Latin, though I have time on my hands, and maybe I should try to muddle thru ...

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