Small businesses

or however that dang word is written! : ) Use this forum to discuss those things that are related to, directly, or indirectly, fly fishing, i.e., tackle, catalogs, single malt scotch, cigar preferences, pipes, camera gear, etc. This is sort of an off topic area but one related to bamboo and fly fishing.

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mer
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Re: Small businesses

#41

Post by mer »

Titelines wrote:LEAVE THE POLITICS OUT OF THE DISCUSSION.

Otherwise this thread will join the others.
:wave :titanic :flash

The most interesting thing to me is that Governments have no money. Period. Governments have tax revenue. Tax revenue is from individuals and corporations. Individuals don't have any income, there is no income tax revenue. Investments tank, there is no taxable gains on investments. Individuals have no income, they can't buy anything (goods or services) which means corporations have no taxable income.

Before "all this" Federal government spending was what, about $10billion/day? Go google up "net wealth of the top ten americans" (Gates, Buffet, Zuckerberg, etc), contemplate 100% confiscation and do the math. Last time I did it, top 5 at pre Covid spending levels gave roughly 2 or 3 WEEKS of spending.

If by confiscating 100% of the wealth of the top 5 gives you funding for 3 weeks of Federal government spending, is it an income problem or a spending problem?

Tying this back into "small business", my local brewery is doing home delivery of craft beers. Cost a bit more than I would like, but:
It's beer, good beer.
I don't have to go anywhere, so I am automatically social distancing.

For small businesses that are trying to get loans, I have no answers other than "Government is screwing everyone and I'm sorry but I'm not the king so I can't do anything about it".

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dshx
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Re: Small businesses

#42

Post by dshx »

I do appreciate the various perspectives but thanks for the reminder, Mark. I must say I thought it has been a relatively tame discussion given the political backdrop (and the fact that so many of us are cooped up at home and more cantankerous than otherwise - me, at least).

-Dwight

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creakycane
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Re: Small businesses

#43

Post by creakycane »

samsonboi wrote:Related, because both are meant to be pandemic assistance. Different, because one is a handout and the other a cheap loan. We had been trying to apply but kept getting hung up on and shunted through the phone system, then the money for the loan fund ran out.
While there is always some waste in any program, these small business "loans" (like one I have some tangential interest in, for a 30 year old Co. with 135 employees) can allow the Co. to go w/o layoffs through (hopefully) a very short period (ie, fingers crossed for a bounce-back and strong 3rd quarter). Based on the taxes paid, wealth generated and food put in peoples mouths, 401ks and retirement funds over the years, the few million is, given the circumstances, a pretty good bet with this Co.. The alternative being 40 people laid off. The company will survive either way, but the damage avoided to individuals is considerable with the loan in place..... Partners have already taken a good hit first.

One correction: the cheap"loan" may turn into the equivalent of a grant if used properly - ie, forgiven if used for salaries and rent at a certain percentage.

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Drossi
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Re: Small businesses

#44

Post by Drossi »

samsonboi wrote: Huge restaurant chains are not getting affected as much as long as they offer takeout, which many of them are.
Simply not true. Even offering takeout I'd be there sales are below the break even point over the balance of the shelter in place period. Even with take out they aren't selling their highest margin items which are beverages, food brings customers in, beverages (especially liquor is where they make the money).

perfesser
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Re: Small businesses

#45

Post by perfesser »

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Last edited by perfesser on 05/01/20 15:18, edited 1 time in total.

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Drossi
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Re: Small businesses

#46

Post by Drossi »

perfesser wrote:sometimes emotion and a sense of indignation can confuse an economic conversation. it is not my intent to gore anyone's ox or tell you that your beliefs or feelings are wrong. that said....

it really doesn't matter what any one of us wants or wishes were true. what 'is', is all that matters. so, what 'is'? this.

if you are an american, you are invested in the stock market. and you have a real, and personal, interest in fat cats getting fatter.

there are two kinds of retirement plans, defined benefit and self-funded. if you are a gov't employee, a school teacher, a fireman, a police officer, etc. your state has invested in the stock market to fund your retirement. if the market tanks, your state will not go insolvent to pay you each month in your golden years. your pension will be reduced.

sorry 'bout that.

if you work for a private business, you still have the same two choices, defined benefit, or self-funded. ibm's, delta's, and all other companies' pension plans are funded by investments made in the stock market. if the market tanks, your 'defined benefit' will be 'defined down'.

sorry 'bout that.

if you self-fund, as many young people (45 and under) have, you hold a 401K, 403B, and perhaps an IRA. what are these instrument's invested in? fairy dust and hopeful wishes? no. they are invested in the us and international stock markets, usually in a mutual fund type stock portfolio. when the market goes in the tank, the value of these investment assets is reduced. i will hazard a guess that beanie-weenies for dinner at age 65 is not the desired outcome of a life of investing, and there WERE hundreds of thousands of people planning to retire this year.

it does not matter whether you are a capitalist, a socialist, a communist, or any other 'ist'. in this country, the united states of america, when the market is up, everybody wins, some more than others, but everyone wins some. when the market is way down, everybody loses. little guys like us lose the most.

this is obviously an extremely simplified description that doesn't cover every contingency or condition, but is broadly correct, and is unlikely to change anytime in the near future.

so what does this have to do with small business, and bailouts, these emergency checks, sb loans, etc?

everything.

successful businesses pay employees and pay shareholders dividends, and their stock rises in the market, as does the value of the pooled assets that will pay your pension.

businesses shuttered for the past 2 months are in grave danger, and many will not survive. the hair salon down the street may be closed forever. as painful and as unfair as it seems, the loss of fifty under-capitalized small businesses is less negative to the economy, and everybody's retirement dreams, as those larger ones with hundreds of employees and millions in gross profit. this is why they are getting checks while some others might not be.

no one on this forum wishes this were so, and none of us can change the fact that it is.

let us pray this ends quickly, with minimal loss of life to illness and despair.

i have done my best to make this non political; moderators please delete words that offend.
Excellent assessment, much better articulated than I could.

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roycestearns
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Re: Small businesses

#47

Post by roycestearns »

Perfesser +1, excellent summary.

galt
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Re: Small businesses

#48

Post by galt »

perfesser,

Spot on. Clarity is everything when it comes to communication.

Galt
Know the reasons for your actions

galt
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Re: Small businesses

#49

Post by galt »

Big business, small business???
I am not sure I understand why so many favor small over big. It would seem that big businesses got that way because they provide that which many are seeking. Small companies offer only a potential. If limited 'monies' are to be expended on one or the other, wouldn't it make sense to go with a more proven track record? This may sound like seeking return on investment because it is. A large solvent company should be able to service more people than a small one. Oh, and for the record, I am only an advocate of general welfare, not specific welfare.

Galt
Know the reasons for your actions

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Loogie
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Re: Small businesses

#50

Post by Loogie »

I am grateful for the support big business has gotten. My company has over 128,000 employees, the effect of laying off half that workforce is pretty significant. And there are many companies similar to mine in scope that need the help. Perfesser elucidated that very well. Big business in this country have a lot of impact on socioeconomic well being, peoples quality of life revolves around these big business, not just small business. I get that I work for a big company, I do hope small business gets the help they need to get us all over the hump.

GRASSNGLASS
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Re: Small businesses

#51

Post by GRASSNGLASS »

Loogie,

Airlines have making record profits for last four or five years, yet they can't save enough money to get through a couple very tough months.

Also, how many damn times does the American taxpayer have to bail out the airlines?

Pan Am and Eastern were also Airlines that we just couldn't live without, still here we are.

Barry

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Re: Small businesses

#52

Post by GRASSNGLASS »

Yup, I think four was previous record.

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Loogie
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Re: Small businesses

#53

Post by Loogie »

GRASSNGLASS wrote:Loogie,

Airlines have making record profits for last four or five years, yet they can't save enough money to get through a couple very tough months.

Also, how many damn times does the American taxpayer have to bail out the airlines?

Pan Am and Eastern were also Airlines that we just couldn't live without, still here we are.

Barry
Many including myself ask that question, its a valid question. I dont have an answer how that happens from the company perspective. My opinion relates to what perfesser posted earlier, when big companies make huge profits they dont sit in cash, cash doesn't do much for them, you can see the stock buy backs by all not just my company to reinject that profit to the people that invested in the company, the better they do the better the folks running that company do. From a daily to monthly operations perspective, the airline is a very very cash heavy operation, cut that cash off and now you have the same problem. I dont think we will come out of this on the other side the way we started, all the major airlines have either retired folks or given temp leaves of absence. We have retired a whole fleet of aircraft, and we will have to rethink how international travel is going to get cranked up. Bottom line I dont have a good answer to your question, and it is critical to keep transportation capability from a wide perspective.

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