[Podcast] Chad Elkins, CPA, discussed bewildering and draconian ways people scrambled their finances during the pandemic. While many small business owners suffered losses and experienced great personal distress, others actually thrived and even doubled their incomes! Read the full blog post for episode #147 at safetyphd.com.
DIRECT LINK to MP3 of this Episode: https://tinyurl.com/SDP147-AUDIO
ABOUT CHAD ELKINS
Chad has over ten years of tax experience, including positions and engagements with the Internal Revenue Service, U.S. Tax Court, and U.S. Department of Justice Tax Division, and Co-Author of the Elkins’ Comprehensive Tax Guide. He’s the oracle of Chicago finance with a penchant for observing nuanced trends in how humans manage the fiscal aspects of their lives.
SOME PEOPLE BAILED OUT IMMEDIATELY
Chad noted that some of his clients, mainly hair stylists, quit paying rent, broker their leases, and liquidated their assets. They didn’t have enough reserve cash to ride out the economic collapse and succumbed to panic-driven decision making. Chad encouraged them to consider suspending their businesses or waiting a few weeks for the forthcoming government relief programs. Even businesses that were established for multiple years and that had been performing well prior to the pandemic were dissolving, to Chad’s disappointment, as owners simply wanted out of the churn of safer-at-home and essential business decrees.
TELEHEALTH-BASED THERAPISTS “ARE THRIVING BETTER THAN THEY EVER HAVE BEFORE”
Once limited by regulation, telehealth therapy was quickly advanced by regulatory agencies and Chad’s clients that provided mental health or other counseling services were experiencing a combination of factors that swelled their incomes. First, the demand for mental health and counseling services substantially increased due to pandemic-driven anxiety in the population. Second, therapists don’t need specialized, localized machines or equipment to do their jobs. When you go to the dentist, for example, the dentist’ office has hundreds of thousands of dollars of equipment that is not designed to be portable. There isn’t a “teledentistry” service to address your root canal. A mental health therapist, on the other hand, is easily location independent given a secure, private Internet connection. And, telehealth has built-in social distancing!
CAT’S OUT OF THE BAG – REMOTE WORK IS HERE TO STAY
Chad believes that the pandemic-driven rapid move to remote work, such as work from home, has set the precedence that traditional office-based work isn’t necessary to maintain continuity in businesses. This likely means there will be a massive purge of office space and business-dense metropolises, such as Chicago, will lose appeal for employers and employees.
PPP AND SBE LOANS WORKED – WITH CONSEQUENCES
The PPP was rolled out as a way to keep employees on payroll, even if they weren’t working – as long as owners proved that they used 80% of money for salaries. But, it caused problems as many employees were laid off and went onto unemployment – which was paying them $600 weekly ABOVE the unemployment payment they received from the state. For many people, they were now receiving as much or more money they were when they were employed. Hence, when asked to return to work – employees balked. As restrictions eased and businesses re-started, employers struggled to lure employees back to their jobs so had to recruit new employees.
REDLINE VIRTUAL REALITY LOUNGE – NOW RENTING OFFICE PODS
Opened and thriving for four months before the pandemic closures, Redline Virtual Reality Lounge in Chicago is an example of a small business that had to pivot several times in order to adjust to new market trends. Aaron, the owner of Redline, shared his lounge survived on carry out orders and renting VR equipment between April 18th and June 11th. When he re-opened at limited capacity, business was very slow – and very different. People showed up with laptops and asked to rent a 9’x9’ VR pod for the day to serve as a portable office. Some lived in hot apartments or had poor wifi. So, for $15 a day, they could rent a cool work area with excellent wifi and social distancing. Aaron noted that small groups of 3-4 people rented a pod to conduct in-person business for a few hours. David noted that Parkinson’s Law is the adage that people seek clear routines to start and end the work day. Perhaps going to the VR pod met that need?
This is episode #147 of The Safety Doc Podcast
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Chad Elkin’s website: https://www.elkinscpa.com/
Purchase Dr. Perrodin’s book: Schools of Errors – Rethinking School Safety in America