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Thread of local businesses that don't survive the coronavirus


CooterBrown

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On 3/16/2020 at 10:35 AM, victory88 said:

I just opened my dental office about 4-5 months ago.  We’re essentially a startup.  We’re rescheduling everyone.  Some people are getting pissed and refusing to reschedule some of their surgeries and appts.

As a startup in my field, it takes 6-7 months to reach break even point.  If this thing spreads and we need to close for 2-4 weeks, I cannot afford to pay my staff.  Our overhead is almost 30k a month as a startup.  I have enough working capital in my business account to survive 4 months if I cut all our marketing, 3rd party services, don’t pay myself, and let some people go.  I cannot imagine other small businesses that don’t have enough capital to survive more than a month.  Landlords still want their rent, banks still want their loan payments, staff still wants their hours and pay.  Lots of people are going to be severely affected by this.   
 

Even the banks are freaking out.  My banker called me Friday asking me if I needed more credit to get through this.  If these small businesses default on their loans... 

 

Best thing right now is if they fed gov allows everyone to freeze their loan payments temporarily with no interest accruing.  If landlords don’t have to temporarily pay their mortgage, they can hold off on rent for a month or two so these businesses don’t go under.  I don’t have a damn solution but I know my office can survive 3-4 months before we run out of money.   

I know exactly where you are coming from. My wife had to go on an almost 5-month bed rest/maternity leave years ago, and it just about ruined us. Her medical practice had $37K in monthly expenses with about $36K being fixed expenses. Being an OB/GYN, she operated at a huge loss for almost 9 months after she returned. I had just started to develop a couple of lots in Rob Roy at the time, and I had to sell those at a loss.  However...I was on schedule to have two expensive homes under construction when the .com bubble burst, so it saved me from that catastrophe. 

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On 3/16/2020 at 7:13 PM, Quagmire said:

At what point does destroying the economy out way closing everything to stop the spread ?

Anyone want to value death?  Its a shitty job.  Any actuaries in the house?  As they say the value on life usually depends on how well you know a person. 

To put numbers to it I'll use the info provided to date.   The government is considering a 1 trillion dollar stimulation package, cash, to all citizens.  So apparently > 1 Trillion, of government money only, per todays reports would be the beginning point. 

So depending on the mortality rate you choose the government stated today that they place the value on life, thus far not including all the loss of private commerce or continued money they would spend at $10,000,000 per life if Covid kills 100k of people or $1,000,000 per life if 1 million people died in this thing.  That amount should grow as we learn the financial and emotional losses others had to endure to save those lives. 

Does this country value life?  What say you?

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1 hour ago, dcar00 said:

after this, there needs to be s strict defcon like step level for shutting the country down.  trigger points at which certain things happen, certain businesses stay open, certain essentials are limited to purchase, critical retail supply chains are converted to emergency support, food/essentials supply chains need redundancy, auto triggers for unemployment, payroll tax reductions, other automatic financial triggers, etc.  I realize this wouldn't be easy but someone has to take this on and constantly be updating. there needs to be website just for this that everyone can clearly understand.  The politicians need to be taken out of the loop except for a key team that would be designated and continually updated.

 It should have been done after H1N1 but whatever.  It needs to be done now.

A blanket health emergency and then a blanket National Emergency is not the right answer.

 

You have no heart if you want to have this conversation and no brain if you don't.  

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This thread will ramp up quickly if the small business paid sick leave goes through as is. Most of these small businesses won’t have the cash on hand to make those 2-week sick payments and “wait” for a tax credit next year.  
 

Use unemployment insurance not the owners only cash flow. Why the fuck isn’t this obvious?

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4 minutes ago, Deej said:

Could we maybe take all that money Austin has earmarked for the homeless and use it to keep some of these poor employees afloat?

good point,  we could tell Adler that listen.. if we DONT do this, we are literally gonna have more homeless on the streets, so lets get off our collective asses and use the money as a bailout stimulus for Travis County small businessess.

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1 hour ago, ChickenSandwich said:

This thread will ramp up quickly if the small business paid sick leave goes through as is. Most of these small businesses won’t have the cash on hand to make those 2-week sick payments and “wait” for a tax credit next year.  
 

Use unemployment insurance not the owners only cash flow. Why the fuck isn’t this obvious?

I don’t think unemployment insurance will pay out for furloughing employees unless the Texas Workforce Commission changes the rules. That might end up bankrupting the program unless the federal government pumps billions of dollars into it. That’s not an area of the law I am familiar with so I might be wrong.  

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^
Excellent two last points by Deej and AustXhorns        There is no plan to move any money around right now.  Obviously the budget has to sit relatively tight right now until the next Council meeting.  

What I did propose was modest and cheap.  During SXSW, you know how a lot of outdoor day events (and many night ones) have port-a-poddies all around.  And more importantly, those handwashing stations like at ACL where you step on a pedal and water comes out and there's a little soap dispenser?  At the very least there's a 4-pointed stand with hand sanitizer dispensers on them?  Well I proposed taking from the affordable housing bond from 2 years ago and doing this:  

-Last I checked, SXSW is taking place.  Neither will any of our mother myriad springtime festivals like AFWF, Kite Festival, et. al.  So those portable sinks/sanitizers stations aren't being used anywhere.  Operators will give them to the City of Austin for free (in exchange for the tax writeoff obviously) and will charge FMV for servicing them

-50 units to be placed around myriad homeless camps around the City and downtown.  Servicing for next 8 weeks with accounting for government contracts shouldn't some out to more than $50,000k.  

-$50k to help halt the spread of the virus and prevent up to ten deaths.  Keep in mind, most of their usual bathroom spots are now closed (stores & bars).

-Affordable Housing Commissioner (which I admit is not the same as the homeless budget/homeless advocacy office at City Hall) told me "No, thanks.  We got this."

-It's been two weeks of serious shutdowns downtown, I ain't seen one homeless person wash their hands but they seem to be enjoying touching stuff.  

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7 minutes ago, Iconoclast Texan said:

I don’t think unemployment insurance will pay out for furloughing employees unless the Texas Workforce Commission changes the rules. That might end up bankrupting the program unless the federal government pumps billions of dollars into it. That’s not an area of the law I am familiar with so I might be wrong.  

So the solution is to “lay off” the employee. Only option you are leaving the owner if the rules don’t change. Would have much easier implementation as well as most/all businesses pay into the program. 

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4 minutes ago, ChickenSandwich said:

So the solution is to “lay off” the employee. Only option you are leaving the owner if the rules don’t change. Would have much easier implementation as well as most/all businesses pay into the program. 

I just read a good article about unemployment insurance in the NYT. Apparently, you can get UI if furloughed or have your hours reduced.

https://www.nytimes.com/2020/03/17/your-money/unemployment-insurance-coronavirus.html

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1 hour ago, AUS-97HORN said:

just thought of another business we all know and love thats gonna be in trouble..... Buc-ees. 

Trucker carrying TP and baby wipes will keep them afloat.  

In all seriousness, I was on call with some senior leaders at Fannie and Freddie as well as other large agencies.  The pressing topic now is forbearance (FB).  People losing their homes.  Despite all the histrionics and straw men about "big corporate big wigs", you can hear the consternation and concern in their voices.  Yes, nobody wants to be on the news as being responsible for taking a CONVID victims home, they are also extremely worried about homeowners. 

The issue is formal vs informal FB.  For those that remember the 2008+ default avalanche, there were perverse incentives in place such that you had to be in arrears (typically 60 days to qualify) and often in certain geographical regions (FEMA).  They are trying to get out in front of this via various "informal" FB options to help mitigate losses, freeze late reporting to the credit agencies, stuff like this.  Reverse mortgages are being looked at as well for those with equity to help provide a means of revenue.  

Even valuation changes are on the table - mainly 1004's being swapped out for 2055's.  Even allowing borrowers to take interior photos, the utilization of geo-apps to validate pics where taken from inside the subject property.  Stuff like this.  

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13 minutes ago, BabaYaga said:

Trucker carrying TP and baby wipes will keep them afloat.  

In all seriousness, I was on call with some senior leaders at Fannie and Freddie as well as other large agencies.  The pressing topic now is forbearance (FB).  People losing their homes.  Despite all the histrionics and straw men about "big corporate big wigs", you can hear the consternation and concern in their voices.  Yes, nobody wants to be on the news as being responsible for taking a CONVID victims home.  The issue is formal vs informal FB.  For those that remember the 2008+ default avalanche, there were perverse incentives in place such that you had to be in arrears (typically 60 days to qualify) and often in certain geographical regions (FEMA).  They are trying to get out in front of this via various "informal" FB options to help mitigate losses, freeze late reporting to the credit agencies, stuff like this.  Reverse mortgages are being looked at as well for those with equity to help provide a means of revenue.  

Even valuation changes are on the table - mainly 1004's being swapped out for 2055's.  Even allowing borrowers to take interior photos, the utilization of geo-apps to validate pics where taken from inside the subject property.  Stuff like this.  

They don’t allow trucks...

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57 minutes ago, ChickenSandwich said:

$50+ million would make a lot of mortgage payments. They could also suspend property taxes as that is a much as the mortgage in many cases

Tax day due date hasn't changed, but another 90 days has been pushed to allow for payment rendered.  Things like this help.  

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56 minutes ago, ChickenSandwich said:

So the solution is to “lay off” the employee. Only option you are leaving the owner if the rules don’t change. Would have much easier implementation as well as most/all businesses pay into the program. 

This is happening with at least two restaurant groups in Austin that I know of. Staffs were laid off and told they would be rehired when the restaurants reopened. In one case, the company was able to file for unemployment for its laid off workers to minimize the wait time on the unemployment checks. 

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On 3/16/2020 at 4:20 PM, LebongJames said:

I work for a medium sized mechanical contractor and it’s pretty unnerving what is going on.

No one really knows what will happen with the housing industry and new starts. Austin was on pace to blow out permits this year but we are already hearing from builders that they expect to slow significantly over the next couple of months.

The length of time is obviously going to be the main issue for everyone. 

I graduated from Texas in 94.  I started as a construction superintendent the day after I graduated.  I started my home building business in 2006.  I hoard cash.  I have a small house and old vehicle but they are paid off.  Well, the house has 50k yet to go but I refinanced a year ago so the payment is $220 a month.  My businesses are paid in cash but the margins are getting razor thin.  At this point I am dumping inventory and waiting for costs to collapse.  Sucks.

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Haven't read this full thread, but my pals at Pint House are about to be hurting too, maybe turbo fucked if the ban extends beyond 6 weeks.  They are still able to do take-out pizza and canned beers, so I'm going to grab a couple pies and brews for dinner tonight.  Said insurance isn't covering the business interruption.

Support local businesses, especially bars/restaurants, if you can.

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If you print money during a real, market-driven recession, it's fundamentally inflationary.

If you artificially restrict economic activity with no market-driven basis, it's fundamentally deflationary.

If you print money during an artificial, intervention-driven recession, it's...?

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22 minutes ago, BabaYaga said:

If you print money during a real, market-driven recession, it's fundamentally inflationary.

If you artificially restrict economic activity with no market-driven basis, it's fundamentally deflationary.

If you print money during an artificial, intervention-driven recession, it's...?

It’s piss

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On 3/17/2020 at 11:44 AM, MaybeACoordinator said:

This came up in another thread, but it's interesting to think about how much cash Tilman Fertitta is hemorrhaging on a daily basis. Casinos, cruises, restaurants, an NBA franchise in limbo, amusement parks (still open as of last night), hotels...he's like a one-man Las Vegas, and Vegas is not going to fare well. 

I would have to think his business interruption insurance coverage is pretty hefty.  That is assuming the insurers have enough capital to pay off all claims, of which there will be, millions?

 

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I was struggling before the pandemic. Seems like I was finally turning the corner, and now this. I was in the beginning  of my third year and I don’t know if I can recover being closed for 6 to 8 weeks. I did close my bar voluntarily prior to the mandates. I hope that doesn’t bite me in the ass when it comes to any kind of aid. 

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7 minutes ago, Penelope said:

I was struggling before the pandemic. Seems like I was finally turning the corner, and now this. I was in the beginning  of my third year and I don’t know if I can recover being closed for 6 to 8 weeks. I did close my bar voluntarily prior to the mandates. I hope that doesn’t bite me in the ass when it comes to any kind of aid. 

Good luck to you.  i am a business owner myself so I can fully understand the stress.  I think I will make it through this, but I am going to have to renew some key accounts pretty fast.

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  Any of you in Georgia? I expect more of these to come here in short order...

The Georgia Department of Labor (GDOL) has adopted an emergency Rule 300-2-4-0.5 Partial Claims, effective March 16, 2020. The rule mandates all Georgia employers to file partial claims online on behalf of their employees for any week during which an employee (full-time/part-time) works less than full-time due to a partial or total company shutdown caused by the COVID-19 public health emergency. Any employer found to be in violation of this rule will be required to reimburse GDOL for the full amount of unemployment insurance benefits paid to the employee. Download the How Employers File Partial Claims Desk-Aid found on the GDOL Alert Page and follow the step-by-step instructions.

Filing partial claims results in your employees receiving unemployment insurance (UI) benefit payments faster, usually within 48 hours for claims filed electronically. Employees for whom you file a partial claim are NOT required to report to a Georgia Department of Labor career center, register for employment services, or look for other work.

Please continue to monitor our website at gdol.ga.gov for any updates to these guidelines.

*** GEORGIA DEPARTMENT OF LABOR ***

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3 hours ago, BabaYaga said:

If you print money during a real, market-driven recession, it's fundamentally inflationary.

If you artificially restrict economic activity with no market-driven basis, it's fundamentally deflationary.

If you print money during an artificial, intervention-driven recession, it's...?

Great post. You could debate this for hours. I would assume inflationary, since by printing money you are not only increasing the amount in circulation, but also increasing economic activity. Whether it would increase activity enough to outweigh any and all deflation is probably where it gets interesting.

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3 minutes ago, ztejas said:

Great post. You could debate this for hours. I would assume inflationary, since by printing money you are not only increasing the amount in circulation, but also increasing economic activity. Whether it would increase activity enough to outweigh any and all deflation is probably where it gets interesting.

Stagflation

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We are reaping the disadvantages of becoming a country that, now, has an economy based on services only. We have shipped all of our manufacturing overseas, so manufacturers can pay 20 cents an hour to make Nikes. China manufactures most of our medications, appliances, car parts, electronics, tools, toys, and disposable items. The American people made this deal with the Devil to obtain these items at cheaper prices. The general consensus is that these jobs are never coming back. Maybe this crisis will change this attitude. It's scary how much we depend on other countries to produce our necessities. Think about how many jobs would be created building manufacturing plants, and production of medicines and medical equipment alone.

CHIEF

Edited by CHIEF
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1 hour ago, StruggleBus said:

My wife just lost her job and my startup has lost 50% of its revenue in the last three days.

Three months ago life was great and we didn’t have a worry in the world. Shit happens fast.

Username checks out.

But seriously, sorry.

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2 hours ago, StruggleBus said:

My wife just lost her job and my startup has lost 50% of its revenue in the last three days.

Three months ago life was great and we didn’t have a worry in the world. Shit happens fast.

I thought the Yellow Rose closed last year.  

 

 

j/k sorry to hear man.  When one door closes and all that shit...  

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My wife is on maternity leave but had to work via emergency since she’s the finance mgr. ;had to lay off half her company and shut most of their stores. The remaining employees are now getting minimum wage. Record year for company then it all came crashing down so fast.

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20 hours ago, Biff Tannen said:

Haven't read this full thread, but my pals at Pint House are about to be hurting too, maybe turbo fucked if the ban extends beyond 6 weeks.  They are still able to do take-out pizza and canned beers, so I'm going to grab a couple pies and brews for dinner tonight.  Said insurance isn't covering the business interruption.

Support local businesses, especially bars/restaurants, if you can.

This x million.

I've been one of the few people I know in my work circle that had an idea of what was possibly coming but even that didn't prepare me emotionally for this. In the matter of one announcement by Adler (one I thought was a day late btw) and a half-day of upper management discussions, I had to inform all of my staff by email that they were all being laid off and that I could only keep one front of house employee and two back of house employees for our new hours of operation from 11am until 8pm. I was told to make the call on who I would keep on the island with me, assuming I ultimately decide to stay. I'm facing a significant salary cut with increased duties and hours. 

Please, please, please support your local restaurants by ordering takeout SAFELY. Order online directly from them, tip generously if possible, and please do your best to stay out of the buildings and try to get curbside pickup wherever possible. 

Godspeed to everyone in the F&B industry. Most of us are middle class or poor, we don't get shit for pay or long-term benefits (401ks etc), and we're the first industry to get crushed like a fucking cataclysmic asteroid by a virus pandemic. 

 

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13 minutes ago, DalTxHornFan said:

That competing "projection" from Richard Epstein is something else.  He's an incredibly smart person, but also a shameless hack.  

Quote

Moreover, it is unlikely that the healthcare system in the United States will be compromised in the same fashion as the Italian healthcare system in the wake of its quick viral spread. The amount of voluntary and forced separation in the United States has gotten very extensive very quickly, which should influence rates of infection sooner rather than later

lmao really?  There are still plenty of people going out even with bars closing and restaurants moving to take-out only.  He's just pulling this shit out of his ass and if people were dumb enough to take him seriously many more people would die.  Burn in Hell, Richard. 

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Called pluckers for to-go, help a smaller restaurant group even tho still a chain

"I need to place a to go order"
'We're only taking online orders'
"Ya, the lunch special isn't on there so I wanted to call it in"
'Oh that's for dine in only so we can’t do that'
"That’s kinda impossible but thanks, I’ll go somewhere else”

They stick to their principles, guess I gotta give em some credit for that

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2 minutes ago, bluto said:

Called pluckers for to-go, help a smaller restaurant group even tho still a chain

"I need to place a to go order"
'We're only taking online orders'
"Ya, the lunch special isn't on there so I wanted to call it in"
'Oh that's for dine in only so we can’t do that'
"That’s kinda impossible but thanks, I’ll go somewhere else”

They stick to their principles, guess I gotta give em some credit for that

did they give you the bird?

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