Will things get better or keep going downhill? That’s the question on everyone’s mind and the future is looking bleak for some entrepreneurs, both big and small. With sales disseminated, and leases bloating expenses, many businesses are underperforming with the continued stresses of lockdown. It’s not just small businesses. It’s businesses all around you.
Here’s a list of the top 6 Covid-19 stressed businesses in Canada:
- Movie Theatres: All jobs related to the movie industry are suffering, not because they are not selling tickets to movies, but because movie theatres make their revenues from selling food and beverage. With no bums in seats, they are in trouble.
- Airlines and travel industry: With the collapse of demand for travel, the industry as a whole has devastated both the domestic and international travel industry. This affects travel agents, musicians, and artists who perform on ships or in theatres, service staff, engineer crews, airline personnel, restaurants, hotels, Airbnb’s, and so on. Unless billion-dollar loans come, they face hard times ahead.
- Retailers large and small are being crushed: Unless you’re Walmart or Home Depot, most brick and mortar retailers have been forced to re-evaluate their business models. If you’re a large retailer, you’ve watched your stock dropping. If you’re a small retailer, you’ve been looking at reinventing brands online. But, you are fighting against Amazon. And you can keep pouring money into buying your leads, but that online Giant is proving too big.
- Small family businesses: If you’re hanging in there, you’re wondering why you should keep pouring money in lease spaces when people can work from home. Your sales have been disseminated, you must keep people employed, foot traffic in offices is declining, and you have no idea if your online plans will pay off! There is hope though! If you can achieve better online sales, reduce your debt, rebuild your brand online you may be able to reinvent the family business!
- The live event industry has also been crushed: The wedding industry, event planners, all event, staffing, event furniture rentals, tent rentals, wedding gown retail shops, event venue rentals, and caterers…all have been badly wounded these past 8 months. Unless you had the ability to restructure your debt, use the Government funding, and repurpose your staff, this has been a crushing blow.
- Restaurants: Our hearts bleed for restaurant owners and family businesses who had to close their doors during this pandemic. Some have simply closed their doors and decide to sell their real estate holdings. Some will have to file bankruptcy. The chain of supply for restaurants have been harshly impacted, causing job losses for not only front of line staff, but for many suppliers in the supply chain.
As a result, and no fault of your own, you may be considering bankruptcy. And you may be wondering what are the pros and cons of declaring bankruptcy in Ontario.
What are the pros and cons to filing bankruptcy?
Eliminate your debt
Certain student loans
Stop Collection Calls
Stop Wage Garnishment
Debt Free in 9 months
Lose non-exempt assets – However, you do get to keep your personal belongings, such as inexpensive car, clothing, furniture and in most cases your RRSP’s
You’ll make one monthly payment based on your income
You have to make your payments – you can’t miss them
You must attend 2 credit counselling sessions
And send Monthly statements
There is a note on your credit report that will stay there for 7 years. You won’t be able to get any credit for that time. (You still can function with a prepaid credit card and a Visa/Debit card)
What do you do if you have assets you don’t want to lose?
In that case, you may be wiser to file a consumer proposal. This just basically means we make a deal with all the people you owe money to and work out a payment plan.
At the end of the day, both solutions offer financial freedom. Whatever the business losses, relationship breakdowns, medical issues, or unforeseen circumstances in a world of lockdown, the smartest thing to do may be to declare bankruptcy.