The Paycheck Protection Program and its sister programs such as the EIDL were promoted to help keep businesses and their employees afloat for a few months while the Covid pandemic was brought under control.
Ironically, that PPP and other stimulus money may have done a lot more harm than good to our economy in the long run, as many businesses failed to set themselves up to make more money when the crisis is over.
Not only that, it required a boat-load of new cash to be printed by the Fed to the tune of about $6 trillion, depending on whose figures you trust. It’s not only from PPP: taxpayers are also on the hook for the Money Market Mutual Fund Liquidity Facility (MMLF), the Primary Market Corporate Credit Facility (PMCCF), the Main Street Lending Program, the Municipal Liquidity Facility (MLF) and so much more.
As even most schoolchildren are beginning to understand, money created out of thin air like this inevitably leads to inflation – and that is exactly what we are experiencing now. In fact, prices are rising faster than any time in the past 30 years. This has occurred in a relatively short time – but I and a few others predict the other shoe is about to drop.
House of Cards
The PPP funds artificially prolonged the life of many businesses which should have gone under but were rescued by the money – and I expect many will implode within the next year.
That’s because research we have done (and corroborated by our PE partners) shows a significant amount of companies out there are houses of cards who’ve only survived because they are propped up by VC funds, cheap loans, etc. but not real revenue. Its more than you think! You’d think they’d learned from the dot-com bust — that they need to make more money through SALES instead of gobbling up investor (or government) cash.
So, PPP stimulus just prolonged the agony and the time of reckoning is about to arrive.
PPP hid the underlying poor revenue models, but this doesn’t mean things cannot turn around for these businesses with some help.
The point is to act NOW to set up a proper revenue generating machine to make more money before inflation and a tight supply chain, not to mention an insanely difficult hiring market, tip things past the point of recovery.
The way Volohaus does it for customers is:
- Sort out the revenue PLAN first. Get it written up and known so people really know what the hell they are supposed to be doing and working towards. This sounds obvious, maybe, but it’s not. Few really do a good job at it!
- Speaking of PEOPLE, next is assessing the current team and plugging in any gaps in personnel and knowledge.
- The sales PROCESS itself is our next item of focus. We straighten out the kinks and make sure things are efficient through role play and training for all customer-facing people.
- Finally, we sort out the CRM/Sales tech stack PLATFORM to support all of the above and, again, train where needed.
The above is oversimplified and there’s all sorts of other parts we often add to it, such as Net Promoter surveys and secret shopping, but that’s the man gist of it. Four Ps: PLAN, PEOPLE, PROCESS, PLATFORM – all with the goal to make more money. Now THAT is what creates a real economy!
I know a few companies who have made a KILLNG during the pandemic and are set to kick ass in 2022 as well. If you don’t feel you are among this set, let’s talk.
Volohaus can help your business get stable and growing sustainably.
email@example.com or 760.815.4464.