
Small Businesses Are Dying by the Thousands – and No One Is Tracking the Carnage - behrlich95
https://www.bloomberg.com/news/articles/2020-08-11/small-firms-die-quietly-leaving-thousands-of-failures-uncounted
======
lockdownornot
Guess who bought up real estate post-2009 crisis, when prices were at rock
bottom? Wealthy individuals and corporations that had enough assets to
withstand the storm and capitalize on a down market.

Guess who will grab more market share post-COVID? Better yet, guess who _wasn
't_ affected by forced lockdowns and benefited during the worst of COVID?

I find it very distressing that this massive transfer of wealth from small
businesses to megacorps isn't being discussed more.

~~~
mensetmanusman
A good discussion of pros and cons of consolidation should be included. E.g.
economies of scale are almost always more energy / environmentally friendly
(efficient).

Lack of diversity, bad. Increased monopoly power, bad. Increased consolidation
for following regulations, good.

~~~
Hokusai
> E.g. economies of scale are almost always more energy / environmentally
> friendly (efficient).

This is just an argument for communism, and that does not work so well.
Planning all the economy in a centralized way, private or public, is a bad
idea.

Capitalism is build in the idea of many producers trying to get to many
consumers. When you only have one or a few producers it stops being
capitalism.

~~~
Nasrudith
Technically the distinction is between how the dominant position is
maintained. Is it a defacto crime to try to compete or is it just impossible
until you can do much better? There is a big difference in dynamics between
trying to build from the start for the max size or an emergent system from
growth.

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catsarebetter
In the Bay Area, a lot of stores are closing down, not 50% but probably around
30%-50% range depending on which part. Places with less traffic are getting
hit harder (obv).

The thing that you have to understand is that the smbs were competing with
other local smbs. So your favorite local coffeeshop only had 4 other
competitors (not in SF lol). Ppl who used to type in "yoga classes near me"
will be typing in "yoga classes online". Now they're competing against
everyone on the internet. Against everyone who has a 5 year lead on them with
SEO and marketing. There's just no way an SMB can take them, nor is there
enough incentive for digital agencies to help b/c it's such a long shot that
they can produce result for the smbs.

Unless there's some search engine that ranks based on locale rather than
standard SEO, but that's just not happening.

~~~
gregoriol
Some local shops around my place have done great online reaches: some food
shops did online order/pickup, some drinks (bottles) did online
order/delivery, ...

Most have reinforced their followers on social networks.

There are some reasons to be optimistic for those who make the move!

~~~
catsarebetter
For sure, that's great to hear

------
dharma1
Anecdote - I had a small amount of money invested in SME lending through an
online p2p lending platform since last year (UK). Not super high interest
rates, about 6-8%, all "AAA" rated businesses. Before covid, default rates
were a couple of percent.

Right now 25% of the businesses in the loan book are late with repayments, I
expect many of them will default and stop trading. And this is while
government subsidies are still going - the subsidies will soon stop.

Covid has been devastating for small businesses which don't operate online and
unfortunately I think the fallout will continue up to a year, until we get
mass vaccination.

~~~
bdcravens
> until we get mass vaccination

FUD is already spreading among the gullible about the coming vaccines, and I
wish I was confident that it'll be a negligible percentage who believe the
fake news

[https://www.cnbc.com/2020/07/22/bill-gates-denies-
conspiracy...](https://www.cnbc.com/2020/07/22/bill-gates-denies-conspiracy-
theories-that-say-he-wants-to-use-coronavirus-vaccines-to-implant-tracking-
devices.html)

~~~
01100011
I love the work Bill Gates is doing, I'm pro vaccine, and there's no way in
hell I'm getting the COVID vaccine before sometime late 2021. I want to see
long-term results before I take my chances with a fast-tracked vaccine. I
suspect that there are lots of other folks with the same mindset.

~~~
pintxo
It's a very understandable mindset and I tend to sympathize with it. On the
other hand, fast-tracked does not necessarily mean less safe.

As far as my understanding for clinical trials goes, we can still have the
exact same tests with the exact same criteria and quality but still speed up
the overall process. Simply by eliminating the default waterfall and accepting
higher financial risk. (Also higher medical risk, but only within the trials,
not for the end-product).

Usually, one would run the various trials strictly in order:

    
    
        trial_stage = 0;
        while (trial_stage < 4)
           execute(trial_stage)
           if (evaluate(trial_stage) == success)
             trial_stage++
        do
    

Under pressure, we can start the next stage while the previous one is not
finished yet. This means higher financial risk, as you are investing already
into stage II even if you do not know if stage I will in the end be
successful. This also implies higher medical risk for stage II but this risk
stays within the trials.

~~~
01100011
My main worry is that there may be longer term effects which are not apparent
for a year or more. There doesn't seem to be a way to ensure long term effects
are absent besides conducting a long term test. I'll happily get my flu shot
this year though, so perhaps I'm being a bit hypocritical.

~~~
tsomctl
Well, I'm sitting here with long term effects from covid itself (difficulty
breathing from smoke from the forest fires.) If I was to live my life over
again, I'd take the risk from the vaccine.

~~~
01100011
Well sure, but I'd rather just not get covid in the first place. Given that
I'll be WFH until at least January, that seems like an attainable goal. Front-
line/essential workers have a more complicated calculus to ponder.

------
mac01021
When 47% of the things you're classifying are "miscellaneous", you've got some
more categories to come up with.

------
ChrisMarshallNY
In my area, I'd say about 50% of the storefronts in any shopping area are
brown-papered.

The other side of this, is that larger business are taking advantage of the
small business' desperation, to buy them at rapacious prices, or coerce them
into really bad deals.

Meaning that some of the small businesses that "survive" this downturn, have
just postponed death.

------
mortenjorck
This article omits the other half of the one-two punch many small businesses
have endured this summer, losses from civil unrest.

I'd recommend this piece: [https://medium.com/@mtracey/two-months-since-the-
riots-and-s...](https://medium.com/@mtracey/two-months-since-the-riots-and-
still-no-national-conversation-12a7e3e4e006) It's a somewhat long-winded bit
of reporting, and has a certain media-cynic slant to it, but gives an on-the-
ground perspective into how businesses in less-populous areas affected by the
unrest in late May have been coping.

------
nathanyz
This is the undercurrent of the pandemic's impacts. Businesses are
disappearing by the tens of thousands and they are not necessarily represented
in the normal metrics of bankruptcies.

Unemployment and GDP are impacted by these closures, but without showing up as
their own segment, not much is being done to counteract it.

Retail & shopping centers are looking like ghost towns, and that is not good
for overall economic health once we get to the other side.

------
tibbydudeza
A friend of ours made a good living making wedding and prom dresses employing
about 6 people ... she shut shop this month as weddings are limited to only 50
people and most churches, hosting venues and schools are all shut.

Folks have more pressing worries on their plate than weddings or proms.

------
erikw
For small businesses that are able to move online, there is no shortage of
revenue available. In the article they mention a yoga studio owner closing up
her shop. I agree that a yoga studio is pretty tough to move online. They also
mention a jewellery brand, and that is exactly the type of boutique business
that can be successful right now with the right marketing and ecommerce
solution. My partner does online sales and marking consulting, and every one
of her clients has at least doubled revenue within one month of onboarding.
Most of them now have problems maintaining stock, not making sales. I don't
know if these healthy sales will last, but for now I'm not seeing any ceiling
for small businesses who make something or sell a service that works online.
My guess is that a lot of SME owners just aren't aware of how to approach
online sales.

~~~
nathanyz
Funny you mention Yoga studios, as we are actually seeing a big influx from
this market for video hosting. Many are starting to productize their lessons
which will likely be bigger wins, versus selling their time as instructors.

I think it's similar to what your partner is seeing. For many of these
businesses, there is a viable online path. But that assumes that they have the
skills and desire to operate an online business.

Some of these small businesses are operated by folks who may know how to
operate in a local market, and have very little interest in e-marketing and
shipping products.

~~~
spanhandler
The world's 50,000th best yoga instructor can probably make a living running a
yoga studio.

I'm not sure the world's 50,000th best yoga instructor can make a living
selling online yoga classes.

~~~
zarkov99
I am not sure that is necessarily that bleak. With the right two-way camera
system it seems like the Yoga instructor could provide a comparable experience
whether remote or local. Seems like we just need better hardware and software.

~~~
jlbnjmn
Remote coaching could be huge. The demand for human interaction has never been
higher.

------
Animats
It's tracked in the Census of Business and Industries. That's mostly annual,
not real-time.

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RileyJames
It’s probably more relevant for Australian businesses (and uk & nz, based on
subscribers) but Xero does have a project that releases statistics about
overall business health and the economy from a SMB perspective.

[https://www.xero.com/small-business-insights/](https://www.xero.com/small-
business-insights/)

Again, it’s likely to undercount low / no-tech businesses and over count those
that were already looking towards technology as a differentiator (having
decided to move their accounting to the cloud)

~~~
apihealth
Is there any such website specific to UK sub regions that you're aware of?

------
jansan
Who the hell killed the comment on the booming patio business? Here, pools
have become all the rage. People cannot go on holiday, but enough people still
have money. So what do they do? They try to make their home to resemble their
holiday dream as much as possible, with decks, pools and outdoor furniture.

~~~
mistrial9
expensive home additions seem to be booming in the SF Bay Area, along with
sudden residential vacancies, right next to them

~~~
jansan
That's the thing with disruptions. One man's crisis is another man's
opportunity. Unfortunately, with corona the crises far outnumber the chances,
but chances do exist.

------
rkagerer
_Bankruptcy cannot create more revenue_

Tell that to Hertz

~~~
selimthegrim
The SEC certainly did.

------
klipt
Isn't this tracked to some degree in unemployment stats? Is being laid off
from a small business that different from being laid off from a large
business?

~~~
ksdale
It probably does show up, but a huge number of small business are basically
just the owner and some independent contractors (or just people they pay cash
under the table to occasionally). Often the owners aren't even employees, and
if they are, in some states they don't qualify for certain benefits by virtue
of having been the owner.

~~~
dboreham
Correct, business owners aren't required to pay themselves via W2 income; and
typically aren't required to register for unemployment or workers comp
insurance. These would be the main data sources for "number of employed
people", I imagine.

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tipsysquid
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