On March 11, 2020, the World Health Organization (WHO) declared COVID-19 a pandemic, and the economy rapidly changed for the worst. The impact on Berkshire County was larger than that of the nation. According to Moody’s, the gross metro product of Pittsfield was down 6 percent in 2020. That compares to a 3.5 percent decrease for the United States’ gross domestic product (GDP). On a relative basis, employment in the Berkshires fell more than the nation and has been recovering more slowly. Notably, payrolls in the vital tourism sector are down significantly. According to Google Community Mobility Reports, 2021 year-to-date…
Insights & Advice
Berkshire Business Roundtable
How the Berkshire economy emerges from the pandemic
On March 11, 2020, the World Health Organization (WHO) declared COVID-19 a pandemic, and the economy rapidly changed for the worse. The impact on Berkshire County was larger than that of the nation. According to Moody’s, the Gross Metro Product of Pittsfield was down 6% in 2020. That compares to a 3.5% decrease for the country’s Gross Domestic Product (GDP) as a whole. On a relative basis, employment in the Berkshires fell more than the nation and has been recovering more slowly. Notably, payrolls in the vital tourism sector are down significantly. According to Google Community Mobility Reports, 2021 year-to-date traffic is…
Loyalty shock: Customer behavior after COVID
Businesses need to understand how customers will behave after the population receives its COVID-19 vaccinations. Even after the memory of the pandemic fades, the effects on consumer behavior may persist. Understanding habit formation, process and technology adoption and behavioral economics can help you be ready for what happens next. History provides lessons in navigating a post-pandemic world. I tracked consumer behavior through and following recent pandemics (SARS in 2002, H1N1 in 2009) and epidemics (H7N9 in 2013) and, after World War II, the oil price shock of the 1970s and the 9/11 terrorist attacks. After the 9/11 terrorist attacks of…
Creating a Successful Business Succession Plan
An exit strategy helps business owners ensure the long-term success of their company A good succession plan creates a blueprint for ownership transfer as you exit your business. It helps you prepare for your retirement, ensuring you have the income you need. And setting a well-conceived plan into motion protects the people around you, including your heirs, employees, and customers by laying the groundwork for a smooth transition. Yet, despite these important benefits, many privately owned businesses don’t have a succession plan, leaving the business vulnerable to unforeseen circumstances. For instance, if the business owner dies or becomes incapacitated, there…
Purpose as a competitive advantage
Once upon a time, the sole purpose of a business was to make the owner rich. Today, it’s considered “mainstream” for a company to also have a more humane purpose. If done authentically, doing so will make the owner even more wealthy. Purpose is motivation, and motivation is a competitive advantage. A corporate purpose explains how its team makes a difference in the world. It also gives your employees meaning and gets them to dive into projects with more energy and enthusiasm. Purpose attracts and inspires employees. You can’t invent a corporate purpose. It already exists, and you need to…
Few businesses sell
The goal for many business owners is to sell their company and retire with confidence. If that wasn’t a consideration of yours last year, it might be today. According to a Baker Tilly survey, as a result of the pandemic, 31 percent of business owners will accelerate their sale to a nonfamily buyer, and 24 percent will accelerate ownership to the next generation. Some readers probably won’t quickly sell their company, because they have failed to take the critical steps necessary to make it transferable. Selling isn’t enough — you need to attain maximum value first. Surveys by the Exit…
Mind Your Business: Sell-and-stay
Do you want to get paid a bunch of money to sell your company but don’t want to stop working yet? A sell-and-stay strategy can help you monetize your lifelong work while allowing you to focus on the part of your job that you enjoy. A sell-and-stay strategy is a transaction that looks like a merger crossed with an outright transaction. It involves the seller getting paid upfront, instead of exercising a more conventional “earn-out,” which forces the seller to take on some payment risk. Instead of the owner walking away, she sticks around and gets paid as an employee…
Mind Your Business: Cut through that one obstacle
What is that one thing getting in the way of you doing bigger things? In 1914, a canal was opened to connect the Atlantic and Pacific oceans through the Isthmus of Panama. The 50-mile stretch of new waterway changed global trade, saving ships months of travel by avoiding piloting around Cape Horn. In addition to shortening the trip by 25,000 miles, ships were able to avoid the dangers of the Horn, where the Atlantic, Pacific and Antarctic oceans collide and cause nearly 100-foot waves, which caused at least 800 known shipwrecks. Julia Pimsleur, the author of “Million Dollar Women: The…
Businesses on the ropes
Your business may benefit from a cash cushion to help you get through the COVID-19 pandemic. More than 300 Berkshire County organizations received a Paycheck Protection Program loan. Per the National Federation of Independent Business, 71 percent of small businesses that received a PPP loan had spent it all by July 21. A July survey by CreditCard.com found that 35 percent of small-business owners, to stay afloat, needed to tap personal funds in the months since the pandemic began. Local business owners are running out of corporate cash, even after already having cut back dramatically. Paul (not his real name),…