A downturn or unforeseen expense is something that can be planned for but no business can realistically plan to be shut down completely for an indefinite time period, none.
Nor to suffer a crippling, long-lasting, nationwide blow to consumer confidence caused almost entirely by political egos. A small business can choose to ignore government and open tomorrow, but how many months will it be before more than a small percentage of the regulars dares to come in?
Exactly.
For many small businesses the lock-down has meant a complete shut-down of cash flow. A down-turn doesn’t result in a stop ...complete stop...of revenues.
Forbes reported most small businesses have only 27 days of resources on the books. We’re looking at being way past that mark for 80-90% of true small business owners. Add into the loan equation from the SBA, if your business still fails after the pandemic...the loan is not forgivable via bankruptcy.
Or as my mom used to say...you cannot get blood from a turnip.
Of course no one can shut down indefinitely and survive. But a person should pick a time. And then make sure that he has enough in reserve to last that amount of time. My choice was six months while someone else might say 90 days is enough, it all depends on the individual.
In this particular case I think six months would have been enough since there’s no way the economy’s going to remain shut down much more than another 30 days and I think that’s an exaggeration.