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New entrepreneurs will open their little boutiques or coffee shops or whatever else in them
by ulfw 6y ago
New entrepreneurs will open their little boutiques or coffee shops or whatever else in them
- op00to 6y agoYou don’t think they will be replaced by huge chains that are able to weather the poor economy?
- trebligdivad 6y agoThe huge chains aren't doing much better at the moment; they're hunkering down and closing lots of shops.
- graeme 6y agoThere’s no magic in a huge chain. If locations don’t make money, they close them. Space tends to go to places with a profitable use.
- mc32 6y agoExactly. Witness Lord & Taylor or it’s parent company. Or Starbucks having to close down shops. A closed shop is a closed shop even if the parent co survives.
- dominotw 6y agocheesecake factory
- WillPostForFood 6y agoChains have many advantages over small businesses that give them more durability during downturns. They have deep pockets, and greater ability to borrow. The location today is unprofitable, but they can afford to look out a year and decide to eat losses, expecting to make it up. Small businesses, especially retail, are much more susceptible to cash flow disruption. They also have economies of scale that let them run at higher margins, so they often will be losing less during tough times because they are spending less. You can see it in action in almost any trendy neighborhood. Each downturn kills some small shops, and chains survive. A unique shopping district in 2007 now starts looking like an outdoor Westfield Shopping center. Is the Apple store in Brooklyn closing down because it isn't profitable today? They can sit on the lease for two years with zero revenue if they want. Meanwhile the boutique denim shop or tea house is already out of business 2 months ago.
- TheCoelacanth 6y agoChains also have the ability to leverage themselves much more than a small business can. We saw a lot of heavily leveraged chains going bankrupt within a month or two of the start of the lockdowns.
- tonyedgecombe 6y agoA lot of the big chains have been struggling in the UK. This started way before the thing came along.
- felipemnoa 6y agoThis is exactly what I'm seeing here in Brooklyn. Lots of businesses went out of business but new ones have already taken their place.
- hh3k0 6y agoClever way to entrepreneur yourself into bankruptcy, with a second COVID-19 wave likely following the first.
- steve_adams_86 6y agoYeah - wow, I can't tell if I admire the entrepreneurial spirit or pity these people for taking such a blatant risk. Numbers where I am are hitting record highs (though they were previously relatively low).
- vmception 6y agoThey service low interest debt and a lease price locked in for 10 years Distribution of failure probably won’t be worse than before for new entrepreneurs People with money or access to capital are in a different world than people without
- papito 6y agoThe difference is risk. If I take a risk like that, I end up living with my parents. They just fail and move on to the next failure, or a success.
- vmception 6y agoYep, there is a survivorship bias because they get to try multiple times in quick succession, compared to once every ten years, or just once, or never.
- doopy-loopy2 6y agoIt's over. There will also be no appetite for another lockdown.