Restaurant owners / Small business what is the survival strategy?

[Anonymous]

You smug posters who are criticizing small business owners have obviously never run one. Most make nominal profits after paying everyone.

[Anonymous]

Anonymous wrote:You smug posters who are criticizing small business owners have obviously never run one. Most make nominal profits after paying everyone.

Then why do you keep doing it? Out of a desire to serve humanity??

This is like Uber drivers all over the world that complain how Uber has reduced their income over the past several years but not one of them wants to quit!

[Anonymous]

Anonymous wrote:A Commercial landlord here. We are of course being flexible with our tenants because, for many of them, it's the right thing to do. But you'd be foolish to think that we are not taking notes on those that are being difficult right now just to take advantage of the situation - we know who you are. Depending on how your lease is structured, we are taking it back in future months or on renewal - with interest. In the end, the customer pays for everything.

I'm a commercial landlord also. Serious question for you: How many tenants do you think will even survive this? I estimate no more than 50%. I am starting to think that the commercial/retail landscape of this country will be changed forever in the next six months. Between most restaurants evaporating, half of other SMBs dying, and things like telemedicine and WFH becoming acceptable, I see a pretty dire future. Not to mention the system financing problems i.e. unhealthy leverage inherent to commercial real estate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:A Commercial landlord here. We are of course being flexible with our tenants because, for many of them, it's the right thing to do. But you'd be foolish to think that we are not taking notes on those that are being difficult right now just to take advantage of the situation - we know who you are. Depending on how your lease is structured, we are taking it back in future months or on renewal - with interest. In the end, the customer pays for everything.

I'm a commercial landlord also. Serious question for you: How many tenants do you think will even survive this? I estimate no more than 50%. I am starting to think that the commercial/retail landscape of this country will be changed forever in the next six months. Between most restaurants evaporating, half of other SMBs dying, and things like telemedicine and WFH becoming acceptable, I see a pretty dire future. Not to mention the system financing problems i.e. unhealthy leverage inherent to commercial real estate.

I would say there will be turnover, but the resulting vacancies will be filled. The businesses that were here served real demand. I don't think there will be long-lasting consumer behavior change from a 1-3 month interruption in our lifestyle. People have short memories in the grand scheme of things. The cultural backdrop of American society is one of optimism and adventure. Sorry to say, most small retail storefronts are operating on very low profit to the point that they really can't survive an interruption like this. But replacement businesses will come back.

To hit on some specifics. Telemedicine will be very limited, IMO. Most patient visits are not just a consultation but involve an examination. There is no way to do this effectively and reliably without in-person contact. Teleworking is very difficult to implement for small businesses because they lack the resources to properly manage a remotely working staff. The office environment provides a degree of assured isolation, a sense of formality that serves to improve the efficiency of workers.

As to financing/leveraging, every landlord's situation is different. Hopefully, you don't have too much exposure of the wrong kind and can work with your lenders to smooth out short term ripples. Best of luck.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You smug posters who are criticizing small business owners have obviously never run one. Most make nominal profits after paying everyone.

Then why do you keep doing it? Out of a desire to serve humanity??

This is like Uber drivers all over the world that complain how Uber has reduced their income over the past several years but not one of them wants to quit!

They make a small profit after paying the owner (who works there) a salary! They do it to support their families and pay their mortgages. You seriously need to get a clue.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A Commercial landlord here. We are of course being flexible with our tenants because, for many of them, it's the right thing to do. But you'd be foolish to think that we are not taking notes on those that are being difficult right now just to take advantage of the situation - we know who you are. Depending on how your lease is structured, we are taking it back in future months or on renewal - with interest. In the end, the customer pays for everything.

I'm a commercial landlord also. Serious question for you: How many tenants do you think will even survive this? I estimate no more than 50%. I am starting to think that the commercial/retail landscape of this country will be changed forever in the next six months. Between most restaurants evaporating, half of other SMBs dying, and things like telemedicine and WFH becoming acceptable, I see a pretty dire future. Not to mention the system financing problems i.e. unhealthy leverage inherent to commercial real estate.

I would say there will be turnover, but the resulting vacancies will be filled. The businesses that were here served real demand. I don't think there will be long-lasting consumer behavior change from a 1-3 month interruption in our lifestyle. People have short memories in the grand scheme of things. The cultural backdrop of American society is one of optimism and adventure. Sorry to say, most small retail storefronts are operating on very low profit to the point that they really can't survive an interruption like this. But replacement businesses will come back.

To hit on some specifics. Telemedicine will be very limited, IMO. Most patient visits are not just a consultation but involve an examination. There is no way to do this effectively and reliably without in-person contact. Teleworking is very difficult to implement for small businesses because they lack the resources to properly manage a remotely working staff. The office environment provides a degree of assured isolation, a sense of formality that serves to improve the efficiency of workers.

As to financing/leveraging, every landlord's situation is different. Hopefully, you don't have too much exposure of the wrong kind and can work with your lenders to smooth out short term ripples. Best of luck.

PP here. I admire your optimism, but unfortunately I don't share it. A few anecdotes just from my own extended family.

My spouse is a primary care physician. She has always maintained that about 50% of her clinic visits could be done via telehealth. The problem was burdensome regulations. Well, all those are gone now. RX refills in particular.

A relative of mine works for a large commercial bank. He says they have been trying to move away from retail to online banking for years (but consumer adoption is slow). He thinks the retail banks will use this as an opportunity to move everyone to online services and estimates 50% of retail locations will never re-open. Obviously most won't default on their rent, but it's reduced demand.

Delivery-only restaurants take up 1/4th of the space of dine-in restaurants. I think we'll see a permanent contraction in the number of dine-in restaurants.

If the shut down is 3 months, most of the retail SMBs I know probably won't survive. They were headed out of business anyway. When the dust settles we may see Amazon, Walmart, Costco, and a handful of very niche hobby stores.

On the financing side, I have never carried any leverage or debt. But most of my peers are heavily leveraged and I've already seen margin calls start to come in. It turns into a downward spiral pretty fast.

Hope for the best, prepare for the worst!

[Anonymous]

Anonymous wrote:

Anonymous wrote:BI insurance is going to boom after this

Business income coverage won’t step in to cover these claims.

Yup. https://www.denverpost.com/2020/03/21/business-insurance-not-cover-coronavirus-losses/amp/?__twitter_impression=true

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A Commercial landlord here. We are of course being flexible with our tenants because, for many of them, it's the right thing to do. But you'd be foolish to think that we are not taking notes on those that are being difficult right now just to take advantage of the situation - we know who you are. Depending on how your lease is structured, we are taking it back in future months or on renewal - with interest. In the end, the customer pays for everything.

I'm a commercial landlord also. Serious question for you: How many tenants do you think will even survive this? I estimate no more than 50%. I am starting to think that the commercial/retail landscape of this country will be changed forever in the next six months. Between most restaurants evaporating, half of other SMBs dying, and things like telemedicine and WFH becoming acceptable, I see a pretty dire future. Not to mention the system financing problems i.e. unhealthy leverage inherent to commercial real estate.

I would say there will be turnover, but the resulting vacancies will be filled. The businesses that were here served real demand. I don't think there will be long-lasting consumer behavior change from a 1-3 month interruption in our lifestyle. People have short memories in the grand scheme of things. The cultural backdrop of American society is one of optimism and adventure. Sorry to say, most small retail storefronts are operating on very low profit to the point that they really can't survive an interruption like this. But replacement businesses will come back.

To hit on some specifics. Telemedicine will be very limited, IMO. Most patient visits are not just a consultation but involve an examination. There is no way to do this effectively and reliably without in-person contact. Teleworking is very difficult to implement for small businesses because they lack the resources to properly manage a remotely working staff. The office environment provides a degree of assured isolation, a sense of formality that serves to improve the efficiency of workers.

As to financing/leveraging, every landlord's situation is different. Hopefully, you don't have too much exposure of the wrong kind and can work with your lenders to smooth out short term ripples. Best of luck.

PP here. I admire your optimism, but unfortunately I don't share it. A few anecdotes just from my own extended family.

My spouse is a primary care physician. She has always maintained that about 50% of her clinic visits could be done via telehealth. The problem was burdensome regulations. Well, all those are gone now. RX refills in particular.

A relative of mine works for a large commercial bank. He says they have been trying to move away from retail to online banking for years (but consumer adoption is slow). He thinks the retail banks will use this as an opportunity to move everyone to online services and estimates 50% of retail locations will never re-open. Obviously most won't default on their rent, but it's reduced demand.

Delivery-only restaurants take up 1/4th of the space of dine-in restaurants. I think we'll see a permanent contraction in the number of dine-in restaurants.

If the shut down is 3 months, most of the retail SMBs I know probably won't survive. They were headed out of business anyway. When the dust settles we may see Amazon, Walmart, Costco, and a handful of very niche hobby stores.

On the financing side, I have never carried any leverage or debt. But most of my peers are heavily leveraged and I've already seen margin calls start to come in. It turns into a downward spiral pretty fast.

Hope for the best, prepare for the worst!

I agree with some of this.

But I don’t think restaurants will fundamentally change. In fact I think people will see the value of socializing at an actual restaurant.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A Commercial landlord here. We are of course being flexible with our tenants because, for many of them, it's the right thing to do. But you'd be foolish to think that we are not taking notes on those that are being difficult right now just to take advantage of the situation - we know who you are. Depending on how your lease is structured, we are taking it back in future months or on renewal - with interest. In the end, the customer pays for everything.

I'm a commercial landlord also. Serious question for you: How many tenants do you think will even survive this? I estimate no more than 50%. I am starting to think that the commercial/retail landscape of this country will be changed forever in the next six months. Between most restaurants evaporating, half of other SMBs dying, and things like telemedicine and WFH becoming acceptable, I see a pretty dire future. Not to mention the system financing problems i.e. unhealthy leverage inherent to commercial real estate.

I would say there will be turnover, but the resulting vacancies will be filled. The businesses that were here served real demand. I don't think there will be long-lasting consumer behavior change from a 1-3 month interruption in our lifestyle. People have short memories in the grand scheme of things. The cultural backdrop of American society is one of optimism and adventure. Sorry to say, most small retail storefronts are operating on very low profit to the point that they really can't survive an interruption like this. But replacement businesses will come back.

To hit on some specifics. Telemedicine will be very limited, IMO. Most patient visits are not just a consultation but involve an examination. There is no way to do this effectively and reliably without in-person contact. Teleworking is very difficult to implement for small businesses because they lack the resources to properly manage a remotely working staff. The office environment provides a degree of assured isolation, a sense of formality that serves to improve the efficiency of workers.

As to financing/leveraging, every landlord's situation is different. Hopefully, you don't have too much exposure of the wrong kind and can work with your lenders to smooth out short term ripples. Best of luck.

PP here. I admire your optimism, but unfortunately I don't share it. A few anecdotes just from my own extended family.

My spouse is a primary care physician. She has always maintained that about 50% of her clinic visits could be done via telehealth. The problem was burdensome regulations. Well, all those are gone now. RX refills in particular.

A relative of mine works for a large commercial bank. He says they have been trying to move away from retail to online banking for years (but consumer adoption is slow). He thinks the retail banks will use this as an opportunity to move everyone to online services and estimates 50% of retail locations will never re-open. Obviously most won't default on their rent, but it's reduced demand.

Delivery-only restaurants take up 1/4th of the space of dine-in restaurants. I think we'll see a permanent contraction in the number of dine-in restaurants.

If the shut down is 3 months, most of the retail SMBs I know probably won't survive. They were headed out of business anyway. When the dust settles we may see Amazon, Walmart, Costco, and a handful of very niche hobby stores.

On the financing side, I have never carried any leverage or debt. But most of my peers are heavily leveraged and I've already seen margin calls start to come in. It turns into a downward spiral pretty fast.

Hope for the best, prepare for the worst!

PP here. Thanks for sharing your experience. While there is generally caution against anecdotes, I do value informed anecdotes!

[Anonymous]

Nail Salons, Barbers, Dry Cleaners, Shoe Makers, Dog Walkers, Maids, Child Care, Mechanics, Home Improvement, Gyms all impacted.

Any business that involves contact, or coming inside house, or stuff folks hired as too busy at work, like doggie day care and child care all toast.

[Anonymous]

Dont forget bitcoin, they let you margin 4x to 10x and it is crashing bad too

[Anonymous]

Can’t you use some floor space and open a small grocery store then keep selling food?

[Anonymous]

Where is all the food that normally supplies DC restaurants going?

[Anonymous]

TBH there are lots of small businesses in my area that sold over priced goods and food that weren’t going to survive anyways. And I don’t feel bad for them.

There are also just too many of the same type of businesses and if some close it won’t be a big deal either.

Lastly it would be nice if this was a wake up call to some of the local retail landlords to stop pricing out established small businesses with massive rent increases.

[Anonymous]

Anonymous wrote:So the small businesses plan to take down the bigger businesses

Small business to Land lord:
I have no money for rent

Land lord to the bank :
I can’t pay my mortgage

Bank to Government:
We will have bank failure,
the economy is going to collapse.

Government print $$$ gives to Bank.
Bank CEO report the biggest profit
and retirees with the biggest pay.