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my business is essential so we are operating. the week before this one, billing was about 10% down, im guessing this last week will be substantially more but hopefully not more than 20%. i wouldnt really expect much from our landlords unless there was actually a decision of negotiate or we close shop. that isnt likely to be the position we will be in.
on the positive side, this experience of working from home should help our company more quickly realize a goal i have had (and was already moving towards) of increasing the % of my workforce that works from home. i will likely need less office space in the coming years. i was actually in the process of switching phone service providers from an in house PBX to a VOIP provider (vonage) and that switch over was going to happen by May. would have been nice if i had that in place now. im working on that project now and can probably get it going in 1-2 weeks but it doesnt thrill me because its a big and important switch that i dont really like the idea of rushing.
Our lease Force Majeure clause specifies the qualifying conditions, and in this case the only one that could possibly be interpreted as applicable is "act of God." That, I suppose, would have to be determined in court. So far our legal team is not suggesting that.
Though we require many kinds of insurance, we don't require business interruption insurance, which could have helped some businesses.
BI does not cover pandemics, viruses, or other infectious diseases. Unless you have special coverage that cruise ships & hotels have which *may* help in this situation.
Our insurance broker said unless the US government ordered them to cover losses from this closure with BI we would be SOL.
I got an email from a relative with rented space in a Norcrosss,GA business park. They just received their April billing statement. In addition to the usual $2800 rent, the property owners have added a $2100 “adjustment” for “common area maintenance”. He is mad as hell about this huge fee and asked me (I owned a business for 30 years) what I would do. To be honest I’d never seen anything like that on rental statements and told him he should at least ask them to break it down to something more specific. My guess is the owners are just trying to get ahead of the curve and milk the cows while they still have them in the pasture.
I got an email from a relative with rented space in a Norcrosss,GA business park. They just received their April billing statement. In addition to the usual $2800 rent, the property owners have added a $2100 “adjustment” for “common area maintenance”. He is mad as hell about this huge fee and asked me (I owned a business for 30 years) what I would do. To be honest I’d never seen anything like that on rental statements and told him he should at least ask them to break it down to something more specific. My guess is the owners are just trying to get ahead of the curve and milk the cows while they still have them in the pasture.
No, that is a real thing. We get the CAM adjustment bill and a property tax bill every February. It's divided by the number of tenants and depends on your square feet. Sometimes we owe, sometimes they owe us. This year they owed me $1500, hooray.
It's in his lease. Part of his rent goes to pay for these things every month, but some years the actual costs are different than expected.
My landlord offered help 2-3 weeks ago but I hadn't suffered anything at that point. Plus, April rent was still weeks away. I said thanks but I'll pay my rent as scheduled. Sales have suffered since of course but I'm still going to pay the full amount, on time.
It's naive of tenants to think there won't be repercussions later for taking deferments now. If your lease is up this year and your landlord has to choose between renewing you or renting to a more stable "essential" business, what do you think will happen?
It's naive of tenants to think there won't be repercussions later for taking deferments now. If your lease is up this year and your landlord has to choose between renewing you or renting to a more stable "essential" business, what do you think will happen?
None of us wanted or expected our businesses to be ripped out from under us. And none of us know for sure how things will look in the future and when things will come back.
When I talked with our property manager, I brought up various future scenarios, renegotiating the rent, moving to a smaller space, etc. Who knows, maybe he has another possible tenant who will pay more for our current space, and they give us a good offer to move a couple doors down at a better price.
It's interesting that personal finance professionals recommend having 6-12 months of living expenses saved in an emergency fund in the event of loss of income but major businesses are on the brink of going out of business with just 2 weeks of lost revenue.
I had no idea so many businesses were so unsuccessful.
I had no idea so many businesses were so unsuccessful.
Are you just being snarky?
Most small businesses run on profit margins of 2-15%. Many are sole proprietors who have to pay taxes, payroll, rent and bills out of their savings when cash flow is slow. What do you think happens when cash flow is stopped altogether and the bills keep adding up?
The same question should be asked regarding landlords.
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