Coronavirus is hitting news headlines.
And I know as a business owner that things are changing due to the virus. The stock market is down. Travel spending is way down. People are changing.
And one of my key pieces of business – speaking – is changing too. Live events are being moved, postponed or cancelled.
There is even talk of playing NCAA Tournament basketball games in stadiums with no fans in attendance.
There are reports that Chinatowns in some cities are not seeing foot traffic and people are not buying Chinese food.
I have to imagine with all of the food and supply hoarding I’ve seen at the stores more people are probably eating at home.
And have you priced hand sanitizer on Amazon? Forget about it!
It doesn’t take much to connect the dots of the economic shock.
It Is Serious
For all the talk we know the economic shock is serious.
We know that government officials have lower interest rates, off schedule, trying to get ahead of the economic slowdown this could cause.
Many business leaders and officials are issuing “business as usual” statements and “don’t give into panic warnings.”
If people are getting out and telling you not to panic you know some people are panicking.
Behavior Is Changing
And with this panic behavior is changing. People are stockpiling supplies. People are changing their routines.
With so much of our economy being consumer driven those changes to behavior have massive ripple effects.
How does the waitress at the local Chinese restaurant pay rent or get her car serviced when she doesn’t have as many customers to serve?
What happens to the car dealer when someone becomes uncertain because their income is down?
I was recently in the service department of a car dealership where things were unusually slow and the service advisor quipped that this wasn’t good for keeping the lights on at home.
We are so connected to certain patterns of consumption that when things change it can definitely cause an economic slow-down. Even if consumption goes to other forms the time to shift and build new patterns (and move jobs, etc.) can cause a real ripple effect.
Events Are Being Cancelled
Closer to home, for me, I see events getting canceled. Some conferences just won’t happen.
I am planning to create and host or co-host events in 2020 and right now everything is on hold.
Between my conferences (small stuff) and bigger events that’s speakers not getting speaker fees, business leads not being created, airplanes, taxis, Ubers and hotel rooms not being used.
People go to business events for one main reason – they are good for business. And if they are unwilling, or unable, to go to these events the net will mean less business.
Less conferences and events means less economic activity. And less economic activity can lead to recession.
Will Business Be Changed Forever?
One looming question for the coming months is will business be changed forever?
Will COVID-19 come and go and we’ll get back to our old ways?
Or will the cancelling of events, the “homing” of leisure activities, and finding new ways to do things (such as virtual meetings) change how we behave into the future?
There are all open questions. And we won’t have the answers until we learn more about the virus and how people react.
That being said the slowing of activity or the changing or activities means a short-term slow-down in economic activity.
New normals will mean new economic activity but there is likely to be a slow-down to get there.
Big Actions Are Happening
When the fed lowers interest rates between it’s normal meetings big things are happening.
When the Louvre and tourist destinations in China shut-down big things are happening.
Enough of these big things and you can plan the seeds of recession. The Louvre being closed probably means a few, or more, trips to Paris being cancelled or postponed.
Each flight not taken means less meals at the airport and less airport parking. A few less hotel rooms used. A rental car sitting empty.
In economies as integrated as the modern world has it doesn’t take much to have big ripple impacts.
And our world leaders seem to know this based on their actions to keep everything moving along.
How Will It All Balance Out?
The hard part, of course, is we don’t know how things will balance out.
Sales of supplies for being at home are up. Some travel, dining and other activities are down.
Conferences are closing but people might be spending more time on Amazon buying things for home while they are stuck there.
The truth is we don’t know how things will “net out” at the end.
But disruptions mean change and it’s hard to predict that change.
What To Do Now
This is big stuff.
If you are a business owner and leader it’s worth your time to reflect on this.
You need to be in the know and think about how all of this impacts YOUR business.
If you are a speaker or connected to events and travel you feel it already. If you are down the line from it you may feel it soon.
We don’t know if we have a recession coming. But I know we each need to look at our businesses and what is right for us and act accordingly.
To pretend this isn’t happening is bad business.
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