Day 17. With each day the economic impact of the pandemic comes into sharper focus. I am not speaking of the stock market but rather the impact on individual businesses large and small who are all focused on assessing the impact of a months-long shut down of the economy on their businesses. Of course, the impact differs from business to business and industry to industry. Just yesterday I worked with several clients whose specific experiences and forecasts for the future were different but whose overall concerns were identical.
My preliminary assessment is as follows:
- Every business, large and small will be adversely impacted.
- Businesses that have taken preemptive cost reduction steps will have a much better chance of survival than those who delay.
- Leveraged businesses are at much greater risk than non-leveraged businesses and thus survival strategies will differ.
- The uncertainty regarding the duration of the economic shut down requires management to reassess daily and to proactively prepare additional (more drastic) steps for possible implementation in the future.
- The government Covid-19 stimulus package will save businesses that are able to qualify and are awarded the assistance.
The most troubling unknown – “When will this be over?”
No one has the answer to this question.