So what can we expect from the world economy in 2021?
We have talked about this a bit in our previous posts and of course things are constantly changing in front our eyes month for month.
There are some real issues with our economies that we need to talk about and we need to come up with solutions that will help everybody not just the people that where well off when the Covid-19 pandemic started back in March 2020.
We have in America roughly 30 million small businesses and and 1/3 over 10 million of them is on the brink of closing for good!.
We do not think that governor Gavin Newsome out in California or governor Andrew Cuomo out in New York really understand what small business owners are going true on a daily basis.
More than 40% of the small business owners in the US where not able to pay their commercial rent in November and it is estimated that over 50% of the small business owners will not be able to pay rent in December.
As small business consultants we here and see this everyday in our line of work.
And for us it is more difficult than it has ever been to advise our clients on what step to take to save their small or even sometimes medium sized businesses.
Many around the world is hoping that this past year 2020 was a nightmare that we will wake up from in 2021.
The bad news is that even with different vaccines available on the open market in 2021, it will take at least 8-9 months to vaccinate more than 70% of the population who is willing to take the risk with a new vaccine type.
So we can forget travel for leisure and many business travelers will remain in front of their computers with ZOOM and similar virtual meeting options.
The only ones that will travel for business will be the companies that have to add a new supplier, or having to go and meet a new potential client, that has to be meet in person.
If we look at the numbers from the IRS, we can see that the numbers for withheld federal income tax is down by almost 20% and that is a lot.
This really tells us where the US economy is today, and where it is heading during next year 2021.
The sadness our clients feel this year is right out scary to us, even if we are very experienced business consultants who remember the 70s oil crisis and the 90s unemployment, not to mention the financial meltdown in 2008-2011.
What do you do when you can not make rent as a small business owner?.
You will have to look towards government support which is very hard to come by these days.
The reality is that many companies have kept their doors open by maxing out both corporate and private credit cards and also taken on very expensive business credits and loans.
So what will then happen in 2021 when all these business and private credits will come due?.
The very brutal reality is that we will see a tsunami of bankruptcies both on the commercial and on the private side.
Figuring out the solution to these financial problems is quite easy.
The solution is that governments around the world will have to go in and financially support small business owners with both PPE and PPP loan forgiveness but also setting up loan possibilities for the small business owners at a good rate for the borrower at maximum 5% interest per year.
Because the consequences of governments doing nothing is a nuclear financial meltdown never ever seen around the world before, starting in 2021.
So let us hope that we can together unite as one unit working towards a common goal, and get true 2021 together.
Take care out there.