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‘I Love a Bad Economy’
Today’s highlights: A new 21 Hats Podcast episode. What we can learn from the NFL’s Covid management. And why the latest pandemic purchase is insurance.
THE 21 HATS CONVERSATION
Join us today at 3 ET for a webinar conversation with Charlie Gaudet, who likes to say he loves a bad economy. Charlie is founder of Predictable Profits, a business coaching service based in New Hampshire. We’ll talk about how his clients have been faring in this economy, how he assesses a business that’s looking for help, and how his own firm has been doing. Bring your own questions.
THE 21 HATS PODCAST
Episode 47: Optimism in D Minor: This week, William Vanderbloemen tells Karen Clark Cole and Dana White that he’s cautiously optimistic about 2021 because his clients are cautiously optimistic and because he’s expecting lots of turnover as the pandemic recedes. William explains how he uses a “Frankenstein” customer relations system to track what his clients read on his website and to sense when those clients are getting ready to make a hire. The system then prompts the Vanderbloemen team to give the client a call. We also talk about why Karen is tired of being a best-kept secret and how Dana handles customers who have to be fired. Plus: there’s a new tax credit you should know about that William calls “pretty incredible” but that seems to be getting lost in the PPP shuffle.
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Despite the grim economy—or maybe because of it—business startups are on the rise: “In California, 442,324 [business starts] were filed in 2020, a 21.7 percent increase from the year before, according to an analysis of data that the U.S. Census Bureau developed with economists and the federal reserve. Across the U.S., about 4.4 million applications for new businesses were filed last year, compared to roughly 3.5 million in 2019, according to the same data, which is considered an experimental Census product. Why are more people taking the plunge and launching ventures during a global pandemic?
“Experts aren’t sure. ‘It’s a significant increase,’ said Mark Herbert, vice president in California for Small Business Majority, a national organization advocating for small businesses. ‘It’s something we’ve been tracking and we have more questions than answers at this point.’”
“Herbert said one possibility is that people whose businesses shut down for good during the crisis might be trying to start over.”
“Others who started new businesses had been carefully planning for years and ended up seeing opportunity in the pandemic.” READ MORE
THE COVID ECONOMY
To get through its season, the NFL had to learn some Covid lessons that we should all consider—including that people were getting infected from further than six feet and after interacting for less than 15 minutes: “In the days, weeks and months after the Titans’ outbreak, the NFL changed its rules to further reduce close contacts, for any length of time. It counted people as having been exposed to the virus if they had unmasked, indoor interactions with an infected person for any length of time. And it introduced lengthier quarantine periods for those exposed people—preventing them from further spreading the virus.”
“The NFL told teams to take meetings virtual, avoid indoor gatherings, even if they were distanced and quit eating together.”
“If someone had done any of these things with a person who subsequently tested positive, they had to be isolated, regardless of how brief their interaction had been.”
“‘This has implications far beyond the NFL,’ said Dr. Thom Mayer, the NFLPA’s medical director. ‘This thing is more transmissible than people thought.’” READ MORE
Some restaurants are choosing to hibernate: “In early January, after funneling almost all of her personal savings into Pearl Oyster Bar, Rebecca Charles decided to close her 25-year-old restaurant for a while when a server tested positive for the coronavirus. ‘I told the kitchen guys to freeze and give away everything they can, throw out the rest, we can’t open at all,’ said Ms. Charles, who is currently living in Maine. ... ‘We weren’t doing well before all this happened. Independent restaurants are dying. The financial burdens are extraordinary and untenable.”
“At 67, Ms. Charles hoped to retire by 70. With all of her assets in Pearl, she is unsure what the future holds. Her landlord rolled back her rent incrementally, and yet she is still struggling to pay the bills.”
“’They’ve been nothing but generous, flexible and kind; I don’t know if there’s another landlord in New York City who behaved the way they have,’ Ms. Charles said. ‘I just pray we can reopen.’” READ MORE
The pandemic has motivated people to buy more insurance: “Consumers’ pandemic shopping lists went beyond baking flour and exercise equipment in 2020. They also bought more life insurance. Applications for life-insurance policies jumped 4 percent in 2020 in the U.S., the highest year-over-year annual growth rate since 2001, when MIB Group Inc., a member-owned organization, began tracking activity. With deaths from the coronavirus constantly in the news, many younger people who previously put off buying life insurance finally took action, agents and executives said. Americans made purchases to replace—or augment—employer-provided coverage in a weak economy.” READ MORE
The economy is expected to rebound much faster than the unemployment rate: “The nation’s unemployment rate will not return to its pre-pandemic levels through the rest of this decade, meaning millions could be out of work even after vaccines are widely distributed, according to a projection released Monday by the nonpartisan Congressional Budget Office. The nonpartisan budget office also projected a faster-than-expected rebound in economic growth as the nation’s economy recovers more quickly than analysts had initially feared. The U.S. economy is expected to grow by 4.6 percent this year before returning to more typical growth levels of slightly above 2 percent by 2023.”
“The CBO’s analysis is based on current fiscal policy, meaning it does not take into account the $1.9 trillion stimulus plan President Biden is prodding Congress to pass.” READ MORE
Business executives are split on requiring vaccines and on responding to social issues: “Fifty-five percent of C-level executives say social, economic, and moral issues will play an increased role in their decision-making in 2021. That's according to a survey conducted in the fourth quarter of 2020 by business and technology consulting firm West Monroe. Only 9 percent of the survey respondents say social, economic, and moral issues will play no role at all in business decisions this year -- a signal that American business leaders recognize they can no longer bar such issues at the door. Their hands have been forced in part by a new generation of workers who expect -- sometimes demand -- that their employers will act on clearly articulated principles.”
“‘Most of the business leaders I know and work with have come to understand how elevated our roles have become in addressing very big societal events and challenges,’ says West Monroe CEO Kevin McCarty. ‘The C-suite has an opportunity to fill a significant leadership gap on these topics.’”
“Executives are almost evenly divided over whether to require employees to be vaccinated against Covid-19 before returning to the office. According to the survey, 51 percent say they're leaning toward requiring vaccines for returning workers, and 49 percent say they're leaning toward not.” READ MORE
SMALL BUSINESS SUPPORT
Verizon is planning a post-Super Bowl concert to benefit small businesses: “The show begins after the Super Bowl at 11 p.m. ET and will be hosted by Tiffany Haddish with performances by Alicia Keys, Miley Cyrus, Christina Aguilera, Eric Church, Luke Bryan, Jazmine Sullivan, H.E.R. and Brittany Howard. The concert will be streamed online in numerous places, including YouTube, Twitter and TikTok, and will be broadcast via BET, CBS Sports Network and other channels. The event will prompt people to text to donate to a nonprofit supporting small businesses.”
“Additionally, Verizon will donate $10 million to non-profit Local Initiatives Support Corporation, which will help provide financial support for businesses. It’s also pledging to help a million businesses through 2030 with digital tools and support.” READ MORE
Amazon’s plans for its HQ2 show it’s not giving up on offices: “Amazon’s plans for its new northern Virginia headquarters feature an outdoor theme, the latest sign that big tech companies are getting more creative with office space rather than abandoning it. Phase two of the company’s development in Arlington, Va., calls for three 22-story office buildings and smaller retail buildings surrounded by woodlands, an outdoor amphitheater, a dog run and parking for around 950 bicycles. The centerpiece will be the site’s fourth and tallest tower, a 350-foot structure dubbed the Helix because it will feature two spiraling outdoor walkways with trees and plants from Virginia that twist to the building’s top.” READ MORE