For Ashlie Ordonez, owner of Bare Bar Studio, a Denver spa, vaccinations for the coronavirus can’t be done early enough. While she expects better days later this year, survival will be a struggle until then, and she knows the next few months will be lean.
“I sold my wedding ring so we could pay the bills and keep the doors open,” she said. “I am sacrificing everything to get through this pandemic.”
Vinay Patel, who runs a chain of nine hotels in Maryland and Virginia, looks even further for a recovery: “In 2022 we will see the real potential of the vaccine.” Mr. Patel added that his greatest hope for the year ahead is a level of stability, if not prosperity.
At the beginning of 2021, entrepreneurs large and small are faced with a rapidly changing landscape. An end to the pandemic is in sight when the vaccinations start, but the slow pace of vaccinations has delayed the turnaround they expected. Holding on is the primary goal for many, even as others look to what they believe to be an inevitable recovery.
This year “won’t be a stroll through the park, but I’m optimistic,” said Jimmy Etheredge, general manager, North America for Accenture, the strategy and consulting firm. “The eggs are in the vaccination basket.”
While anticipating a turnaround, Etheredge insisted that many of the changes brought about by the pandemic, such as remote working and businesses moving to cloud technology, will continue.
“Ten months of pandemic accelerated technological change by ten years,” he said. “We will never be the way it was before.”
In the meantime, it is clear that there will be winners and losers this year. Restaurateurs, leisure and hospitality businesses and the travel industry will continue to experience problems as a surge in Covid-19 cases leads to new lockdowns in many parts of the country. Few expect salvation to come.
The largest companies, on the other hand, position themselves for consumption spikes as the pandemic recedes. Technology, manufacturing, healthcare and some other industries are booming.
In fact, the contrast was evident last week when major stock indices hit new highs despite the Labor Department reporting that the economy lost 140,000 jobs in December. It was the first decline in months that the leisure and hospitality sectors alone lost half a million jobs when bans were lifted.
“There’s light at the end of the tunnel,” said Brian Moynihan, managing director of Bank of America. “But there is one side of the economy that is still in trouble. There is a group of Americans who want to go to work but cannot because the work is not open. “
Mr Moynihan said he was pleased that the $ 900 billion pandemic relief package was passed and incorporated into law after many seizures, and he was in favor of further incentives if needed. Around 19 million workers receive unemployment benefits and the employment picture remains bleak for many low-wage workers in the service economy.
President-elect Joseph R. Biden Jr. signaled Friday that trillions of dollars worth of new stimulus might be on the way, and the upcoming Senate Democratic scrutiny makes that much more likely.
As difficult as the next few months may be, the economy is in better shape than it was in the months after the first blow of Covid-19, when unemployment rose to 14.8 percent. The unemployment rate in December was 6.7 percent.
Bank of America customers’ vacation spend was 2.5 percent higher than last year, and account holders actually have more savings than they did before the pandemic. “There are a number of sectors that are doing very well in terms of earnings,” added Moynihan.
Even so, for many executives and business owners, these times remain in limbo, where the old rules no longer apply, but the post-pandemic reality has not yet materialized.
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Jan. 11, 2021, 4:00 p.m. ET
“The days of a permanent budget or a permanent plan are over for a while,” said Mercedes Abramo, general manager for North America at luxury goods retailer Cartier. “You have to get through this ambiguity.”
Customization is a strategy Ivan Kane, owner of a coffee shop and nightclub in Columbus, Ohio, knows by heart.
To meet the demands of social distancing, he reduced the capacity of the venue from 320 to 117 and filled the former dance floor with tables to create enough space between guests. To attract customers, he bought 15 hospital-grade UV disinfection lamps and recently acquired an igloo that allows guests to dine outside, protected from the elements.
In the months to come, Mr. Kane is hoping he will be able to break even, but he predicts it will be a year before he can initiate the amount necessary to make his business profitable .
“The edges are very thin,” he said. “It’s just about keeping the lights on.”
However, for other business owners, the vaccine arrived late. In September, Camilla Marcus closed her West-Bourne restaurant in New York’s SoHo neighborhood after she was unable to renegotiate her lease to reduce rental costs.
Ms. Marcus has made a ton of money selling packaged groceries on her company’s website and hosting virtual events. But she has no plans to open another restaurant.
“It’s going to get a lot worse before it gets better,” she said. “It’s going to be a long way.”
Others, like Roy Paulson, a factory owner in Temecula, California, feel more secure. Like many manufacturers, he had strong demand during the pandemic for industrial face shields and goggles that his company makes for welders and electricians.
The second stimulus
Answers to your questions about the stimulus calculation
Updated December 30, 2020
The economic aid package will issue payments of $ 600 and distribute federal unemployment benefits of $ 300 for a minimum of 10 weeks. Find out more about the measure and what’s in it for you. For more information on how to get help, please visit our hub.
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- Do I get another incentive payment? Individual adults with adjusted gross income on their 2019 tax return of up to $ 75,000 per year will receive a payment of $ 600, and a couple (or someone whose spouse died in 2020) who earns up to $ 150,000 per year receives twice this amount. There is also a payment of $ 600 for each child for families who meet these income requirements. Individuals filing taxes with head of household status and earning up to $ 112,500 will also receive $ 600 plus the additional amount for children. People with incomes just above this level will receive a partial payment that decreases by $ 5 for every $ 100 of income.
- When could my payment arrive? The finance department said on December 29 that it had started making direct deposits and would be mailing checks the next day. However, it will take a while for everyone to receive their money.
- Does the agreement concern unemployment insurance? Legislators agreed to extend the length of time people can receive unemployment benefits and restart an additional federal benefit that is on top of the usual state benefits. But instead of $ 600 a week it would be $ 300. That will last until March 14th.
- I am behind on my rent or expect to be soon. Do I get relief? The deal calls for $ 25 billion to be distributed by state and local governments to help backward tenants. In order to receive support, households must meet various conditions: the household income (for 2020) must not exceed 80 percent of the area median income; At least one household member must be at risk of homelessness or residential instability. and individuals must be eligible for unemployment benefits or face direct or indirect financial difficulties due to the pandemic. The agreement states that priority will be given to support for lower-income families who have been unemployed for three months or more.
There will be new models of signs coming out soon, originally slated to be released last year. Paulson hopes this will further increase sales. Last week, the Procurement Management Institute reported that its manufacturing index rose in December to its highest level since August 2018.
“Production in Southern California and the US is alive and well,” said Paulson. “I expect an excellent year.”
While the situation in restaurants varies widely, some are confident that the industry will recover.
“We believe we will be cornering in the not too distant future,” said Brian Niccol, managing director of Chipotle Mexican Grill. Looking to summer or early fall to get back to normal, he adds that “people want to eat and socialize and the restaurants are well positioned”.
Mr. Niccol has some great advantages over small business owners – his company is debt free with a strong cash position and a market capitalization of nearly $ 40 billion. However, some small business owners share his optimism.
Andy Rodriguez, co-founder and general manager of Salty Donut, an artisanal donut shop and coffee bar with locations in Texas and Florida, believes the pandemic will bolster his business in the long run.
After the virus hit, Mr. Rodriguez had to quickly change his company’s business model, which used to be heavily reliant on retail traffic and corporate catering. He made the full menu of the donut shop available on Uber Eats and increased his social media presence to encourage customers to place orders online.
Mr Rodriguez hopes the work the company has done building its digital sales platform will allow the company not only to recover but to thrive when the pandemic subsides.
“We will be in a far better position than ever before,” he said. “We’re going to shoot all cylinders.”
Audrey Hoyt, who co-owns Seattle-based collaborative venture Pioneer Collective with her husband, is also confident that there will be more demand for her company’s services in the coming year than ever before. She believes collaboration arrangements will be attractive to many companies looking for flexible office space during the transition to a post-pandemic world.
Ms. Hoyt said she hoped the Senate’s democratic scrutiny would pave the way for further incentive efforts.
“Providing more credit and assistance to help small businesses during this period is essential,” she said. “Now that the Democrats have more power, I am more hopeful that we get the help we need.”
Ms. Hoyt has been working to expand the company’s real estate holdings despite the pandemic halving business revenues. As commercial landlords seek to attract tenants, the company has had more leverage in negotiating favorable rental terms, Ms. Hoyt said. She plans to open a new building in downtown Seattle in April.
“It was a conscious choice: either we close all the way or we dig deeper and find a way to keep this out,” she said. “Hopefully we’ll come out stronger on the other side.”
Ben Casselman contributed to the coverage.