Many Businesses Did Not Survive Judgement Day in 2020
Why Many Businesses and Franchises Have Closed Down Over the Last few Years
For awhile the competition has been between large retailers and smaller shops. It’s much easier to get most of what you need from 1 store, rather than having to make more than one stop. Especially if you’re also able to save money. This meant that small shops would have to work a bit harder to establish more personal relationships with their customers. But now competitive business concerns have changed.
Since 2020, many businesses have been closing; mostly due to delusional expectations and funding, as well as higher technology taking over outdated business structures. For years now, we have been use to stores, restaurants and retail occupying a street or highway more than once. Meaning that we may find a McDonald’s within a 2 mile radius from another one. We have been use to seeing a CVS across the street from a Walgreens or a Rite Aid. Now it seems like these competitive stores are needing to merge rather than be competitive. Especially since the pandemic started, many structures to businesses have changed. Although online businesses cannot replace traditional business structures, it does seem like online retail has became favorable over the last couple of years. Businesses have been changing because our society and economy is transitioning in order to accomodate with modern expectations.
Over expectations and Over funding
It’s easy for businesses to have high expectations, because there is so much capital available, but since there are so many other businesses, companies and people in the world, the distribution of funds outweighs the reality of what’s actually available. Before opening any business or franchise, there’s usually is a start up plan and start up funding that is necessary. The expectation of profit vs. loss is challenged. A lot of companies and stores are able to continue running despite losses for a variety of reasons, such as investing and other financial alternatives. Although the pandemic threatened our economy, it also opened financial opportunities to many small businesses, large retailers, etc. Since business funding during the pandemic was easy to receive, there may have been over funding and misusage. I wouldn’t be surprised if many businesses were already in need of funding right before the pandemic relief programs started. As a result, many businesses suffered from misunderstanding the use of funds. Loans may have been used for inventory or other purposes, instead of abrupt changes and requirements needed for the store or business at the time. It’s easier to manipulate people when they are in panic, so although money was giving out for business purposes, who knows how it was actually being spent. Before you know it, what seemed to be a large sum of money was suddenly not enough. This is why it’s important to keep receipts and documentation for your spending habits.
2020 and Judgement day
Over the last decade, retail stores, banks and other businesses and franchises have slowly been incorporating new technology and services. However, when the pandemic started in 2020, many of these stores were pushed to act more quickly. They were tested in their ability to adapt to sudden upheavals and change, and many stores and restaurants closed both temporarily and permanently as a result of the pandemic. Although many businesses were funded from the variety of loan opportunities that were available, most of the funding probably went towards paying employees and health and safety protocols. While other retailers, businesses and stores used funds to make up for profit loss during the pandemic shut down. Unfortunately, many retail stores and restaurants could not survive after losing so much money. Our economy was being tested at this time and we are still facing the shadows from all of this. It is not all negative or bad news however, if it is to strengthen our economy in the long run.
Perhaps we are being pampered in a new way, since many of us have been use to having our favorite stores, banks and restaurants all within a few miles from one another. We feel that it is our right to have unlimited or at least many options. So we feel most secure when there’s a backup plan or an alternative option. If we passed Burger King, there’s a Mcdonalds or Wendy’s down the block. If we can’t make it to that Walmart, there’s a Target across the street, or another Walmart closer to home. It seems like we usually have another chance to go shopping or to stop at a restaurant. So, especially starting year 2020 when the pandemic began, all of these stores, retailers and restaurants needed to stand out and be more competitive. Many were funded with governmental assistant loans, but it was to prepare these businesses for survival and the fittest.
The Great Resignation and Lack of employees
Over the last couple of years many people quit their jobs to work a higher paying job. It seems that people are more confident in finding another job, probably because there are so many hiring signs displayed inside and outside of stores. Many of these stores are even displaying their starting hiring rate, easily allowing potential employees to compare their current salary or wages to other stores. Regardless, most large retail companies and small businesses need a team of employees to maintain organization and fulfill duties and expectations. Many stores and restaurants have to cut their hours because they do not have enough people to work. If these stores and restaurants actually have business during the hours that were cut, they are now suffering a loss from not having enough employees.
Many of these stores and organizations started hiring more employees before accommodating their current workers. This is a poor management and HR strategy because hiring more employees as a back up plan only provides temporary security. It is better to build a reliable group of team members to work for any company, organization or business.
Online Retail and higher technology taking over outdated business structures
Branch Consolidation
Many banks have been closing because we don’t need to be serviced by people anymore. The ATM machine, our phones and electronic transactions seem to enough. Most people are using their credit and debit cards to make purchases today. You can get cash back from many of the stores that you shop at. We can transfer money using Cash app, Zelle and Venmo. The need for a physical bank is becoming less necessary as society favors the swiftness of digital transactions.
People are spending less time at the store
Usually if people spend less time, they also spend less money. So, online shopping has been a benefit for consumers because shopping can limit the possibility of buying more than what you need. More often when we shop in store, we get distracted and manipulated into buying something we didn’t originally intend to. Now we can order almost anything online, including groceries, and pick it up already bagged or have it delivered to our home. Regardless, businesses still attract more customers from having online shopping available, but stores can also be losing money from this as well.
Delivery services like DoorDash have contracts with many stores and restaurants to accommodate with consumer preferences and expectations. I’m sure that a lack of business with delivery services can lead to challenges in the growth and success of stores and restaurants.
Online retail could be taking over physical stores
Large eCommerce stores such as Amazon continue to thrive in online sales, allowing freedom from a physical store. Other similar stores like Walmart are trying to follow this retail and business structure. If so many people are shopping online, there’s less of a need to have so many stores for people to shop at. There’s more of a need for warehouses to store and ship out orders.
Maybe our society is changing for our best interest
The closing of many businesses may have had a negative impact on many people and their families, but for many of us, this is only temporary as our society and economy transitions from outdated retail and business structures. Many of which may appear to be bad news could be supported with innovative intentions. Much of what we have been use to is changing and our egos and intuition is being tested. Although we always have a choice and we always have options, it can be challenging to oppose modern society or what’s considered mainstream. As our economy continues to develop and improve, we have to consider both the good and the bad. Understand the significance of the greater good, and take advantage in the blessing of resilience.
