My company has been in
operation for over 10 years, providing technical field services to a variety of
industries nationwide. As of February
29, 2020, we had a total of 31 employees, 27 of which live and work in the greater
Albuquerque/Rio Rancho, New Mexico region. The
company had grown significantly over the past three years from about $1 million
in annual revenue in 2017 to over $3.6 million in 2019. Early sales estimates for 2020 were projecting
another 50% growth. During this period of rapid growth the company had a
three-fold increase in the number of employees while maintaining a greater than
20% Net income.
Last year we
provided our employees over $800,000 in wages and began providing a health
insurance program where the premiums are fully paid for by the company. Since most of our revenue comes from out of state,
the economic
multiplier effect of these salaries should be considered to be a
significant addition to the local economy.
Beginning
March 11, 2020 I began discussions with local lenders regarding a line of
credit that would be needed to purchase additional inventory, pay for new
offices, furniture and computers as well as help with the larger than expected
tax burden from our 2019 success. At
this point, the coronavirus was just beginning to be discussed but there was
little understanding as to the scope of economic impact it would bring. By March 16th, my research for
funding turned towards SBA loans, especially those types of loans focused on
disaster relief due to the virus.
Applications were submitted as the changing economic climate worsened. Traditional loan requests were denied due to
a “downturn in business” and the Paycheck Protection Program (PPP) from the
CARES Act was being bogged down by a landslide of requests.
As revenues
began to drop in March and totally disappeared in April I took steps to lower
our monthly costs including laying-off nine employees and reducing hours for
the remaining team members to a 4-day work week. With these reductions and other cost-saving
implementations, my cash flow modeling tool indicated I had the ability to keep
the doors of the company open until mid-May. With the hope of a PPP lifeline of
funding it appeared we could add an additional eight weeks to that projection
taking us into July when, hopefully, revenues would be on the increase.
However, as
time goes by, the likelihood of receiving the PPP
loan is becoming less certain.
Even if I do receive this invaluable funding, it seems that thousands of small
businesses will be left out.
Beyond our
personal story, the point I want to make clear is the value small business brings
to our economy. Each week the new unemployment claims are reaching new highs.
These unemployed workers are the result of small businesses downsizing and closing.
The small business economic stimulus that our economy relies on is disappearing
and along with it the health benefits of thousands of workers. When the stay-at-home restrictions are lifted
there will not be a sudden resurgence of the economy because this missing sector
will not be around to contribute and the workers will have no place in which to
return for work. In this sense, there is no such thing as a non-essential business…
all businesses are essential to the economy on which we all depend.
If we are to
avoid a deep, long lasting depression, small businesses need immediate,
life-sustaining grants to help them keep their valued and skilled employees on
staff. The
CARES Act has not gone far
enough in this regard. It is limited in size and scope. The economic support must also be designed to
sustain all companies as long as restrictions remain in place in order to fight
the virus.
Second, everyone’s
health is of the utmost importance and I fully support New Mexico’s Governor Michelle Lujan
Grisham and the steps she has taken to insure our safety. I am sure she is fully aware of the impact
the stay-at-home, essential-services-only policy has on the economy of our
state. That being said, she and her
cabinet now need to use their creative juices that were so necessary during the
initial outbreak, to focus on steps that can be taken to safely reopen
businesses as soon as possible. As I
mentioned earlier, all businesses are essential so if she were to change the
mindset of there being essential and non-essential businesses to “every
business is essential”, then methodology for insuring the safety of workers in
each situation should be easily developed.
A blanket approach with all businesses being treated the same will not
work and a priority given to large stores over small is simply wrong. Deciding which company will survive should not
be the role of government. Instead, the
role of government is to provide equal opportunity and support to all
businesses.
For my
company since most of our work is performed out of state, little can be done to
change our effectiveness here in New Mexico.
All but two of our employees work from home and can continue to do so as
long as needed. However, I feel the Governor, through her strong leadership skills that
have been evident over the past few weeks in crisis, can set the standard for
developing a strong response to bringing business back to work, modeling for
the rest of the country on the how-to-do business in our new, virus-filled
world. The virus will not go away
quickly and the only way to survive it as a country is to develop and implement
safety guidelines that businesses can follow in order to keep their employees
safe while returning to the ‘normalization” of business so the economy can
recover. Yes, there is a killer virus
still out there but the economic death of our country is at stake as well and
steps need to be taken quickly in order to save it.
I know that
this letter does do little in providing answers to the challenges that lay
ahead. The goal was to re-impress the
importance of small business in our economy and bring it back to the top of the
list of priorities of everyone in our state so that we can avoid total economic
collapse.
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