Easy answer, who knows? Not such an easy answer, who knows? The election (fortunately almost over) will set a course depending on which party wins. The pandemic will mark the other course. Regarding the election, perhaps the biggest immediate unknown is whether there will be some kind of immediate stimulus package that could include some kind of immediate cash payment like the latest package and/or renewed unemployment assistance. The economy grew at a record pace in the third quarter, but it is already running out of steam. A revamped stimulus package would help mitigate the effects of the new Covid restrictions now being implemented in some parts of the country. But there is a long time between the election results and the day of the inauguration. This “Who knows?” – what could happen between the election and the inauguration, would receive the treatment of capital letters.
Regarding the course of the pandemic, the situation of the economy tends to be less optimistic even when the GDP of the third quarter made a dramatic jump of 7.4%. But on the other side of that picture, layoffs in some industries are starting to pick up. Several states are already beginning to reimpose restrictions, and if infections and hospitalizations continue to spread (in 13 Midwestern states, average daily cases have increased 45% in the past two weeks), more may be in place. restrictions. How much of an effect could that have on holiday shopping? The most likely effect is that online shopping could increase further. That could mean fewer people going to stores, forcing layoffs again in the retail sector.
For a small business owner, if consumers start to rein in spending because the virus is taking a higher toll or more shutdowns are taking place, you need to be even more careful with your cash. Until workers and consumers feel safe and healthy, spending is likely to continue to be restrained. Do you have costs that can be reduced? Are there potential new sources of income? Could you reduce the variety of items you sell? Will you have enough cash to see you through the spring, when it will start to get more daylight and hopefully start giving yourself a vaccine in large numbers? If real improvements start to take hold in the spring, one scenario I could see (tongue firmly planted in my cheek) is that consumers will be desperate to go out and spend all that money they’ve been saving and come pour it out. from their houses waving their credit cards and tossing cash in the air in celebration as they run to the stores. Make sure you follow there to open the doors and get out of the way. Cash is king.
