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May Day! Mayday! SOS! Save Our Business! Save Our Jobs!

Historically, May Day is a time to celebrate the change of the seasons, from Spring to Summer in the northern hemisphere. It takes the April showers and ushers in the May flowers according to the phrase I learned as a child, “April showers bring May Flowers.” Though, in Michigan, we never planted vegetables until Memorial Day as a freeze/frost was still likely. Not only is May Day a phrase to call out to wake up the flowers in the ground, but spelled a bit differently, it is the distress call created by Frederick Stanley Mockford at a London airport in 1923. SOS is short for Save Our Ship and is used because it was a very simple, easy to distinguish, and quick to tap out signal on a telegraph, with the “S” represented by three short taps (dots) and the “O” represented by three long taps (dashes). Today is also International Workers Day. In 1904 the International Socialist Conference called on everyone to demonstrate for workers and peace on this day. So, it seems appropriate that we should connect good business with jobs on this day.

This last week, my wife and I shopped several times at a locally owned franchise operation more than usual. Like many small businesses, it has sales less than $1 million and employs 10-49 people, some of whom are likely part time. I also presented a lunch & learn session this week on the 7 Forces affecting all businesses, with a special focus on the Risk of Disruption. After 5 long and difficult years, the business was making a go of it. Unfortunately, the economy has recovered and the landlord found a higher paying tenant to take over the space. Further, the landlord found some terms in the lease which allowed him to terminate the lease 4-6 months early. The business owner, was likely counting on the favorable renewable clause in the lease and looking forward to continuing to grow the business for another 5 years or more. The owner has tried finding another space, but as you would expect, all landlords (they are businesses too that must increase their revenue and decrease their expenses) are seeking higher rents. Alas, the economics are such that the business stopped operating yesterday.

Here it is May Day to celebrate turning the corner to summer and honoring the worker. Instead, the ship has sunk and people are out of jobs.

This is not the only business faced with the issue of leased space and costs going up. Another client had a successful business, but lost their lease for the restaurant on a prime corner downtown. Fortunately, they found another location just a couple blocks away in the middle of the block. A couple years in, and the costs of renovation, moving, and higher rent have the business struggling. Another favorite restaurant of ours had been in business for 40 years when the city decided they wanted to use the land to build a new court house. Nearly 100 jobs were at stake. The owner, now in his 70s, decided to exit the business. Fortunately, an investor chose to raise the restaurant like a Phoenix bird out of the rubble a few blocks away. Delays, weather issues, new equipment costs, high rent, and holidays were just a few of the disruptions to getting the new business off the ground and running smoothly. They are still in their first year and looking to turn their corner from the “spring of start up to the summer of success.”

This is National Small Business Week. Save Our Jobs! Save Our Small Businesses! SOS-B!