What the New Year Means to Small Businesses

Hi. I trust everyone survived the holidays hiding from your relatives. I think some elites just didn’t want to discuss politics and religion at their holiday meal and found a new way not to invite those less desirable members of their extended family. Hiding behind the China flu might work this year but what will they think of next year. Well, if you live in New York, and the state Assembly gets their way, you can get your neighbor (or family member) locked-up indefinitely if you accuse them of spreading a communicable disease—like Covid or Christianity. Next, we’ll all be given gold stars? It worked in socialist Germany so why not here?

Anyway, to the topic at hand. Folks, to lift a phrase from the Lutheran Church, I’ve been in, under, and around small business for a number of years so please trust me on this, a tsunami of bankruptcies is coming in the next few months. People have gone thru their cash and when that ran out, thru the money that should be earmarked for state payroll taxes. They may have limped thru the Christmas season but who does better in January than December? Given a choice, small business will pay federal taxes before state because the federal government can seize your bank account and assets, something state revenue agents can only dream about. Also, January marks the highest payroll tax burden on employers because the bulk of unemployment tax revenue for the year is collected on employee wages in this quarter—January to March. As a result of cash flow problems, many businesses will be going under in the next few months.

In addition to tax revenue not making it to the state treasury, vendors will be stiffed on many of their receivables and the supply chain in many sectors will be sorely tested. Watch the aging category of 60 to 90 days and consider anything over the 90-day mark as lost revenue.

Many folks that didn’t see it coming will find themselves out of work and the economic disruption will be significant.

Look for whatever economic solutions that the federal government offers to make the situation even worse.

Joe Biden is threatening a nationwide shutdown like what has happened in England and Australia. If this happens, you can amp up my prediction 20 or 30-fold. What is coming will be the death knell of many more businesses. Also look for the feigned shock and surprise of the so-called experts when all this happens.

Many words may describe 2021 but “happy” is not going to be used much this year.