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2023 Will Be the Year of the Earndown: What Every Colorado Small Business Owner Needs to Know 

Even with whispers of a possible recession on the rise, there continues to be high demand in the Denver metro and Front Range areas from buyers looking to buy all kinds of small businesses, at any price point. However, as we look ahead to 2023, small business owners in Colorado hoping to sell their business soon should know that we are about to enter a very interesting time in the transactional marketplace. I’ve coined 2023 “the year of the earndown.” So, what does that mean, and what do small business sellers and buyers need to watch out for?

READ — What Does a Recession Mean for Your Finances?

The Pandemic’s Impact on Small Business Revenues

It’s no secret that some businesses absolutely killed it during the pandemic. One example is businesses in the home renovation space.  During the pandemic, consumers found themselves stuck at home and unable to spend money on travel, dinners out, sporting events, cultural events, etc. The result? They plowed their money into improving their homes. As a result, many businesses in the home improvement space likely have three years of financials showing significantly better numbers than their previous three years. What will that mean when those businesses come to market in late 2022 and 2023?

Increased Pandemic Revenue – Is It Sustainable?

Every seller who had a great three years will want a sales price that reflects the business’s performance during this timeframe. But potential buyers looking at the company will likely have concerns. Will the business stay at 2020 – 2022 levels, or will it revert to pre-pandemic 2019 levels? Will the business decline due to the dual problems of inflation and recession? And, with higher interest rates increasing the cost of loans to pay for the business, how much purchase price are they able to offer? Each of these factors is likely to negatively affect the purchase price a buyer is willing to pay.

Doing the Deal – Earnouts vs. Earndowns

So, how does this relate to the term “earndown”? To explain, let me back up and tell you what an earnout is. An earnout is a provision in a transaction that provides that the purchase price will go up based on the performance of the business after closing. I coined the term “earndown” to refer to what happens when the purchase price is reduced after closing due to the performance of the business after closing.

For example, let’s imagine a business that the seller thinks is worth $5,000,000 based on its 2020–2022 performance. However, the buyer thinks it’s only worth $4,000,000 based on its 2019 performance, and the buyer is not willing to guaranty the seller $5,000,000 because the buyer is concerned that the 2020–2022 performance is not sustainable. What’s the solution?

Traditionally, the solution would be the inclusion of an earnout provision in the sales contract, which provides that the purchase price will be payable as follows: $4,000,000 at closing, and additional payments after closing, up to an additional $1,000,000, based on the performance of the business after closing. However, the fly in the ointment with earnout provisions and small business transactions is that many small business purchase and sale transactions are financed with SBA-guaranteed loans—and Small Business Association rules prohibit earnouts in deals financed by SBA-guaranteed loans. But, SBA rules permit earndowns.

So, what does an earndown provision look like? The buyer could offer the seller $5,000,000, but pay $4,000,000 at closing and $1,000,000 in a promissory note, with the promissory note having terms that could cause the amount paid under the note to be reduced to zero if the business’s post-closing performance does not exceed 2019 levels.

If you are thinking about buying or selling a small business soon, it’s essential to understand how these factors may impact the deal. As an expert in small business purchases and sales who has closed over 1,000 deals, I have seen earndowns used many times to bridge the gap between a buyer’s and a seller’s expectations.

READ — Exit Planning: New Study Shows Most Colorado Business Owners Are Not Ready to Sell Their Businesses

Still, both buyers and sellers need to be realistic about the valuation of a business being sold. While sellers will hope that buyers see their increased revenue as a sign of continued growth and pay top dollar for their business, buyers are likely to be more cautious due to concerns about whether or not the increased revenue is here to stay. A great potential solution is including an “earndown” provision in your purchase agreement to help address the concerns of both buyer and seller.

Julian IzbikyJulian Izbiky is an exceptionally experienced and well-respected mergers and acquisitions attorney. Throughout his career, he has closed more than 1,000 business purchases and sales, varying in size from several hundred thousand dollars to tens of millions of dollars.

Economic lessons learned at halftime of this pandemic

I try not to write about the same topic in this column and, given my professional role as a professor and applied economist, I am committed to presenting in a non-partisan manner.

With this column I am breaking both rules by discussing some lessons learned or insights gained to this point in the COVID-19 pandemic.

Unfortunately, the experience is not over as we move into the vaccine phase with the virus on a renewed rampage. It’s only halftime.

According to Google’s mobility trends, visitation to parks increased as much as 60% during the summer compared to prior periods. This desire for the outdoors was certainly noticeable in Colorado’s mountain communities last summer. The biggest decreases were travel to transit stations and workplaces–down 40%. This insight, combined with other research I’ve done in recent years, suggest parks, greenways, trails and open space are growing in importance to our perceived wellbeing.

The development of approved vaccines around the world in less than 10 months is phenomenal. Just like in war times, governments, working with the private sector and scientists, were able to impressively marshal and focus resources in order to innovate and problem-solve in the face of grave threats.

When the pandemic is over, the rate of death will be much lower than in 1918, although the total number may be comparable or greater in the U.S. This should remind us how much can be achieved in shortened time frames if we collectively have the will. Now we just need to diligently perform our individual duty to one another and get vaccinated.

As the new year began we were surpassing 80% of ICU bed capacity nationally, and 20% of hospitals were at more than 95% of capacity. I’m surprised it took so long to hit capacity during this once-in-a-century emergency. These numbers suggest there is a lot of capacity for crisis management in the system.

Based upon Colorado Gov. Jared Polis suggesting the need to possibly triple the number of ICU beds in Colorado after Thanksgiving and the scenes from around the world of temporary facilities being constructed in weeks, it’s apparent the biggest constraint to our health-care system is staffing. This triggers two thoughts.

First, as I’ve stated before, we need a medical staffing reserve similar to our military reserves. Second, if ICU space is that flexible, do we really need to spend well in excess of $1 million per new hospital bed during normal times to expand capacity?

Where are all the small business failures? This story has not been followed since the first COVID-19 wave. Anecdotally we know small businesses, especially in the restaurant and travel sectors, are hurting badly from substantial declines in tourism and workers not going to offices. But finding ongoing metrics like we see with unemployment statistics is difficult.

The number of small businesses closed (temporarily or permanently) improved before the second wave (from 44% to 29%) according to Economic Insights at Harvard University.

However, going into the pandemic, the average small business had cash less than one month’s worth of expenses, and one would assume they could not hold on this long. It will take a couple of years to know for sure, but if high-end “guestimates” by some national economists are close to accurate at a 20% permanent closure rate, 33,000 Colorado small businesses employing 207,000 people (6% of total private sector employment in the state) will be gone. Recovery could take three to five years.

The most important insight or lesson learned was about true leadership. Good leaders empathize, but do not pander to those they lead. Being revered is not leadership. They pursue important visions with clarity and motivate followers to move in the same direction. Good leaders remain open minded to minimize making poor decisions–humbly remembering that if they are the smartest person in the room then they are in the wrong room. When times are tough, they lead by example and console the anxiety we face while imploring us to be strong and move forward.

Ex-President Trump had many ardent supporters in his hand. Had he taken COVID-19 seriously, then he would have donned a mask and encouraged his loyalists to overcome their vanity for the sake of humanity. He would have demanded social distancing and not forced 50 governors to compete for critical supplies and equipment. In short, he would have established national purpose and both inspired and commanded compliance. Had he effectively led during our most trying time, I submit he would still be president despite his serious personality flaws.

Let’s see how we do under new leadership in the second half. Unfortunately, President Biden will not have the support of the least compliant.

How to retain workers and maintain quality care

Demand for healthcare workers, particularly nurses, skyrocketed in 2020 as hospitals and other facilities increased staff to keep pace with the pandemic. Fastaff Travel Nursing, which provides experienced nurses to the most urgent and crucial situations nationwide, saw a 156% increase in requests for travel nurses last year. In Colorado alone, demand for travel nurses jumped by more than 550%.

Although COVID-19 cases are declining, the need for skilled healthcare professionals remains strong. I continue to hear from hospital administrators who worry that a potential surge in COVID numbers is on the horizon, fueled by the proliferation of new variants, which have been shown to be more contagious than the strain commonly found in the U.S. Vaccination efforts are also moving more slowly than anticipated and that, coupled with the easing of lockdown restrictions, could cause COVID-19 cases to creep up.

Beyond the pandemic, hospitals are still working their way through a backlog of surgeries and other procedures that were postponed because of the virus. In addition, many patients were unable to schedule cancer screenings or standard care for chronic conditions during the peak of the pandemic, increasing the chances of patients now visiting hospitals with complications or worsening illnesses.

There’s also concern that patients who have recovered from COVID may have lingering health issues that could put additional strain on the healthcare system.

“We are still working to understand the long-term effects that COVID-19 has on the heart specifically. We have seen that it can damage the muscle in even the youngest and healthiest of patients, so the increased need for cardiovascular care will continue nationwide for some time,” said Dr. Lou Vadlamani, co-founder and Chief Medical Officer of CardioSolutions.

All of these factors indicate that demand for health care workers won’t subside anytime soon.

Here’s a look at how hospitals can stay ahead of staffing trends and retain critical workers this year.

Plan ahead. The pandemic revealed just how dangerous it is to be unprepared. Anticipating shortfalls and planning accordingly will be key. Right now, it looks like demand will be highest for critical care, operating room and medical surgical nurses between, so ramping up in those specialties will help hiring managers avoid scrambling later.

Maximize existing staff. This can be particularly important when occupancy levels rise and stay high for a sustained period of time as they did last year. We saw hospitals shut down specialty units when they became deluged with COVID patients. If faced with the same scenario, instead of furloughing specialty nurses in units that are underutilized, administrators should deploy them to help nurses in other areas with time-consuming tasks such as taking vital signs and assisting with patient self-care. It’s really about tapping that specialty nurse’s skill level to help another nurse who might be handling 10 patients.

Emphasize safety. Healthcare workers want to know they’re being protected. In addition to ensuring adequate PPE levels, continuing to provide training on best practices for infection prevention will be key. COVID-19 has also caused us to reexamine how we sanitize workplaces in general. I expect we’ll see hospitals looking more closely at infrastructure improvements to further improve safety.

Offer emotional support. The pandemic has taken a tremendous toll on healthcare workers. Ninety-three percent of healthcare workers surveyed by Mental Health America between June and September 2020 said they were stressed out and stretched too thin, while 75% reported exhaustion and burnout It’s important to encourage staff to use paid time off to recharge even when healthcare demands are high. Adding temporary nurses is one way to give existing staff a break without sacrificing quality care. Strengthening Employee Assistance Programs (EAP) offerings is also crucial, as is reminding nurses that those resources are available.

Keep an eye on labor negotiations. If you’re operating a unionized facility, a potential strike is always something to take into account. Even in the midst of the pandemic, Fastaff provided nurses on short notice to facilities experiencing strikes in Illinois and California. It’s always better to have a contingency plan than to be surprised by a walk-out, so consider how you would supplement staff if a strike occurred. Our sister company U.S. Nursing moved to virtual inductions during strikes in 2020 to minimize spread and risk to replacement workers, so there are many ways to plan ahead and keep people safe.

Explore partnerships. Last year, we saw a number of private and public entities join forces to deliver care faster. Certification agencies, for example, worked with facilities to ease credentialing requirements to get nurses into the field quickly. We also saw manufacturers shift gears to increase production of PPE. These types of efforts need to continue to ensure effective health care delivery. Getting your supply chains connected both in terms of equipment and people, will be vital.

Staffing effectively is always challenging, but the pandemic magnified the issues involved in the process. My hope is that hospital administrators will continue to share information and lessons learned, so we can plan better for the future.

Kathy Kohnke Kathy Kohnke is the Senior Vice President of Client Services at Fastaff working with hospitals toward the delivery of productive workforce management solutions that enhance patient care and improve the financial performance of her clients. She has extensive expertise in the areas of recruitment, staffing and workforce management with specialized knowledge in labor productivity and staffing technologies to aid hospitals in the management of labor costs.

Pandemic prompts small-business tweaks that may endure

From curbside pickup and senior shopping hours to dining in yurts and viewing menus via smart phones, small businesses and restaurants were forced to institute a wide range of customer safety and service steps in 2020. Business owners now are examining which of those experiments were so successful that they will stay around post-pandemic.

The pandemic pushed businesses to turn from what was easiest and best for their own internal operations to instead adapt to become more consumer centric, said Chris Romer, CEO at Vail Valley Partnership, a nonprofit dedicated to regional economic vitality.

“The businesses that thrive coming out of the pandemic are going to be 100% focused on the customer experience,” Romer said. “Things that make it easier for consumers are here to stay. The pandemic fast-tracked a lot of that.”

Changes that small-business experts expect to stick are those related to customer comforts and technological advances such as non-contact payments, scannable QR codes for digital menus, curbside pickup of retail and restaurant orders, enhanced to-go ordering apps and online platforms, and expanded delivery services.

With restaurants and bars suffering some of the toughest blows, look for the continuation of carry-out cocktails, dining in unique outdoor settings such as in retired gondola cars, seating expanded into public rights of way, and seasonal extensions of outdoor patio dining, said Sonia Riggs, CEO of the 3,500-member Colorado Restaurant Association. Riggs said food and beverage organizations will carry through with pandemic lessons learned that boost efficiency and cut costs since the profit margin of restaurants is low, averaging 5% to 7%.

The Town of Breckenridge instituted a Walkable Main Street for five blocks from July through September that was a popular and successful experiment, as it introduced more tables and chairs and more space to stroll through downtown, said Brian Waldes, town finance director. He said creating a pedestrian zone on Highway 9 had been discussed for many years, but the “pandemic was the tipping point to try it.”

“We had great visitation numbers over the summer,” Waldes said. “We really feel that it (Walkable Main) kept that level of economic activity.”

Expanded outdoor zones for public consumption of alcoholic beverages are popular with guests and are expected to survive post-pandemic. Last year leaders approved common consumption areas, for example, at ski base areas in Steamboat Springs, Vail, Telluride and Beaver Creek.

Many small businesses committed the time and funds in 2020 to improve online shopping options to serve customers remotely. In small towns such as Fruita and Palisade, chambers pivoted from organizing in-person events to expanding community-wide business websites. Kayla Brown, Fruita Area Chamber of Commerce executive director, said she saw “a huge need” to create a “shop local” directory called GrandValleyBusiness.com.

“We weren’t looking into building an online platform,” Brown said, “but we know the value in having a good online resource now more than ever because of the pandemic.”

Fitness clubs reopen with mask mandates, other measures

When fitness businesses reopened during the pandemic, they implemented COVID-19 safety measures such as limited capacity, frequent equipment cleaning, reservations and waitlists, and mask mandates. Many gyms, cycling studios and other establishments soon found that as they adapted their business models, customers adapted to new workouts.

“People have a renewed appreciation for fitness and its contribution to long-term physical and mental wellbeing, now more than ever,” says Jason Carter, regional vice president for 24 Hour Fitness. “We’ve been pleased that our club members are not only excited to return to the gym, they are also adhering to our health and safety protocols, wearing masks, practicing social distancing and more.”

Members that do not want to return to the gym can go online and buy virtual personal training, participate in group training, or download the 24GO Personalized Fitness App to access 1,500 workouts. People can also use the app for touch-free club check in. “We can monitor their access to and from the club so that we’re always within our club occupancy caps,” Carter says.

Technology plays a role at the wellness company Life Time, where members are encouraged but not required to download the CO Exposure Notifications app. Life Time updated its HVAC systems, and people get their temperature checked by standing a foot away from a screen. “Sometimes people don’t want to use it because they think we’re taking a picture,” says Duane Wishmeyer, general manager of Life Time Cherry Creek. “They are few far between. We also have handheld devices.”

One thing that has not caused problems is the mask mandate, as most people wear them as instructed. “Our members know that we’re trying to stay open for them,” Wishmeyer says. “We’re trying give them a safe space, and to build their immunity system.” Life Time even sells performance masks and comfort masks.

High Ride Cycle, with locations in Edgewater and Northglenn, adjusted its business model and operations due to limited capacity and social distancing regulations. “We used to have 38 bikes with about eight classes per day. Now we’re at 10% of capacity with 15 classes per day in order to allow more members the opportunity to ride,” co-owner Megan Hanson says. “We’ve also added an online option with our partner, Stryde, to allow riders to ride at home if they are not comfortable coming into the studio.” The business installed HEPA filters to remove aerosols and an exhaust system to replace air in the room, and increased its retail offerings to boost revenue.

While some customers froze their memberships when the mask mandates began, most people learned to accept the mask. “A lot of our riders and instructors were very nervous and anxious to ride and teach in a mask, but it is not as bad as we expected, and it is an added level of protection to keep everyone safe,” Hanson says. “It is an added challenge for sure that tests your limits, but we can overcome any challenge if we set our minds to it.”

6 tips for managing a vacation property during Covid-19

The coronavirus pandemic has radically impacted the economy—and ruined basically everyone’s summer vacation plans. With most countries still closed to holders of US passports, more and more Americans are rediscovering the getaways and amusements in their own country.

More often than not, these in-country vacations have taken the form of road trips to vacation homes or campsites—after all, a car is a sealed environment, and rentals and campsites don’t require passing through potentially hazardous common areas like hotel lobbies or airport terminals.

In the past couple months, there has been a huge increase in rental home reservations; Airbnb says it actually received more bookings in the early summer than it did over the same period in 2019. According to a survey by travel company Expedia, 85% of Americans anticipate taking at least one road trip this summer.

This trend has especially benefited Colorado. The Centennial State has long attracted tourists and investors alike, but in 2020, the state is currently the top road trip destination in the US, up from 10th last year. And it’s easy to see why—with low rates of coronavirus, amazing national parks, and endless opportunities for social-distancing-friendly activities such as hiking, rafting, or climbing, the state is an ideal destination for a pandemic vacation.

But that doesn’t mean everything is business as usual. Managing a vacation property during a pandemic has its own unique challenges, as hosts need to not only keep their guests comfortable but to keep them safe, too.

Let’s look at a few easy ways to make sure your Colorado vacation property is welcoming, reassuring, and safe.

Space Out Your Reservations

Doctors have noted that the coronavirus can live on surfaces for a day or two. For that reason, many experts recommend that travelers seek out accommodations that have been empty for at least two or three days to give any viral traces time to become non-viable. In fact, Airbnb is now offering a “buffer” feature, which ensures that your rental has been vacant for 72 hours before a guest’s arrival.

Colorado hosts should consider doing something similar. Although it might cut into your bottom line, leaving the rental empty for 72 hours between bookings can go a long way toward reassuring your guests.

Spacing out your reservations will also keep you safer if you don’t have to clean a unit immediately after it was vacated.

Provide Cleaning Supplies

Even if you provide a buffer period between stays, it’s a smart policy to provide your guests with plenty of cleaning supplies, as many travelers make a point of cleaning their surroundings upon arrival.

At minimum, you should provide sanitizing wipes for door handles, counters, and miscellaneous surfaces, hand sanitizer (with at least 60% alcohol, per the CDC’s recommendations) for general use, plenty of soap, and sterile, wrapped masks in case your guests want to go into town.

Consider Relaxing Your Cancellation Policy

One of the big draws of Colorado is its low rate of coronavirus infection, especially when compared to other popular vacation states such as Florida or California. But that can change, and guests know that. Even if guests fall in love with your property after viewing it online, they might worry about losing their deposit if an outbreak prevents them from traveling.

Adopting a more flexible cancellation/refund policy in the event of an uptick in statewide coronavirus cases — or if the guests themselves end up contracting the coronavirus and can’t safely make it to your rental — can make potential guests feel much more confident about making their reservation.

Adopt a No-Contact Check-In Policy

Many hosts were already conducting a no-contact check-in before the pandemic, with lockboxes, keypad locks, or other means, but this has become exponentially more important in the pandemic. Devise a secure way for your guests to acquire keys to the property so they don’t have to come into face-to-face contact with you. The technology for this already exists — many cutting-edge real estate companies were doing no-contact showings even before the pandemic.

And remember— this isn’t just for their protection, it’s for yours, too.

If you can’t avoid a brief physical meeting, make sure you stay six feet away from your guests as much as possible and to wear a face covering (and to ask them to wear a mask, too).

Remind Guests of New Policies

Many vacation rentals have gotten rid of some included items and extra amenities as a result of the pandemic. Experts suggest removing soft or hard-to-clean shared objects from your rental, such as blankets, throw pillows, and some floor coverings. The same goes for complimentary food or drink; the risk of contamination is just too high.

Guests will understand and appreciate these new safety policies, but make sure you remind them, ahead of their arrival, that you no longer provide these amenities, so they can bring their own supplies and furnishings.

Provide Socially Distanced Recommendations

Your guests might be coming from across the country, so it’s possible they won’t know the area. Along with your usual recommendations for dining and recreation, you should try and provide information about local possibilities for social distancing.

There are some great resources out there about Colorado social distancing — and a lot of the information is pretty counterintuitive. For example, a lot of rural areas and small towns may seem like they’d offer high degrees of social distance, but studies have found that their public spaces are actually very dense, with a moderate to high degree of risk for viral transmission.

And if you’re surprised by this information, it’s safe to say that a guest will be, too. Hosting and renting in a pandemic can seem very stressful, but it’s doable — if you just take the time to educate not only your guests but yourself, too.

Why 2020 is the year of the moose

2020 is now the year of the moose. Why the moose? Here’s the whole story.

The weather was beautiful as I rolled out of bed that morning; I had a busy day filled with several closings so wanted to ensure I got in a run before the day started.  It was around 5:30 in the morning as the sun was already up in northwest Colorado.  I grab my shoes and leash Luna (my Siberian husky), and we walk to the trail.

I run on this trail several times a week, it is wide and heavily used which makes it an easy quick run.  I was planning on a five-mile jog out and back. As I neared mile 1.5, I see the moose, in full charge, heading directly towards me. While I regularly see moose, bear and other wildlife, I knew instantly this was not a normal encounter. Typically, a moose will let you know they are present, and you can put distance between yourself and the moose and you are fine.  Today was radically different, I knew I was in trouble with the moose suddenly hot on my heels.

With the moose behind me, I immediately took off into a sprint as I heard the hoofs getting increasingly closer; I hear her snorting getting louder. This is not a false charge.  I glance back again to see the moose now just steps behind me.  I knew I had to drop the leash to allow Luna to get away, and hopefully distract the moose.

Fortunately, as I dropped the leash, the moose was momentarily distracted by Luna, giving me a few second head start to dive under a spruce tree for cover.  In any moose encounter, typically you get behind a tree or other object and the moose loses interest.  However, once again, today was different.

I was crouched under a large spruce tree that had tons of branches. I thought I was fine until a few seconds later, the moose turned and headed towards the tree at almost full charge. She saw me crouched in the tree well and began using her hoof to try to break the branches and get at me.  I tried talking calming, yelling and remaining silent, nothing seemed to work.

As Luna circled back to try and check on me, the moose tried to kick her and then quickly comes back to focus on me. This went on for several minutes until a car turns into the parking lot around 15-feet from where I had taken cover. I peeked my head out to see if this will give me a few minutes to run the other way.  Unfortunately, the moose charged the car, which then pealed out of the parking lot, and then quickly came back to me.

The moose got increasingly agitated as I became increasingly worried. She would have done anything for me to leave (I would have gladly obliged), but I was stuck with no way to exit without getting kicked and or trampled.  I didn’t have my phone with me, and my options were running out.

As each minute passed, the moose continued to use its hoofs to break the branches and get closer to me. It reminded me of a bull winding up before a charge.  I knew I had to act quickly if I was going to make it out alive.  I can now see the moose’s face a couple feet away. She was definitely angry, and her snorts were growing louder.  The moose pushed its head through the branches toward me. I knew I had to act, so I lunged back against the tree and gave the moose a swift kick in the nose.  The moose looked at me a bit startled and took a few steps back and then took off.

This was my chance to make a break for it.  I rolled out under the opposite side of the tree and took off the other direction; I’m home in a few minutes.

Before I arrived, my wife was startled out of bed as the doorbell motion sensor went off; she saw Luna running toward the backyard with her leash on, with me nowhere to be found.  She was freaking out when, a few minutes later, I came running down the hill with ripped clothes and blood streaming down my legs.

I called the division of wildlife to report the incident, and as I explained the story the officer asked if this was related to the dog running down the road being chased by the moose. Several people had called in after seeing Luna being chased down the road by the moose.  When I kicked the moose, it lost interest in me and went after Luna, chasing her all the way home.

Why was the moose so aggressive?

After my call, the officer went out and was able to locate the moose because she was still in the area.  He quickly discovered the moose had a brand-new baby calf with her.  It appears the moose had, within the last several hours, the calf, which is why she was acting so aggressive.  Even though I was scanning ahead and cognizant of my surroundings, I never saw the moose or calf before she was charging. The calf, unbeknownst to me, was likely not far from where I took cover, which is why the mom wanted me to leave so badly.

This was, unfortunately, a case of being in the wrong place at the wrong time for both me and Luna.

Why is 2020 the year of the moose?

As we are halfway through 2020, it is apparent that this year is not like any other year we have ever experienced.  Almost every economist missed the recent economic gyrations, because all the planning in the world was unable to predict what this year has had to offer. The virus has thrown the economy into a tailspin, with pieces falling out every day. Just like the moose, the virus has created many instances of wrong time/wrong place, creating a dangerous financial situation.  The huge amount of uncertainty has also made this year even more precarious.

Just as in the moose story, this year will have twists and turns and you cannot let your guard down.  We recently saw an amazing job report that has led to a historic run up in the stock market.  Don’t be fooled, unfortunately, the moose is just get started and there are sure to be surprises that you must prepare for.

4 tips to survive the year of the moose

The moose is indicative of 2020 and is a stark reminder that you must be ready to react to whatever is thrown your way.  The pandemic has been an unprecedented event and will create change that is nearly impossible to predict.  There are four key lessons that the moose taught me that will help everyone stay “alive” during these challenging times.

  • Prepare: Although there is no way to prepare for the test, per se, general preparation is critical. Now is the time to go through what if scenarios to, at the very least, mentally prepare for the challenges ahead.
  • Mindset: Having a moose running at you full force is an important reminder of how important your mindset is. You can have all tools in the world (or none), but at the end of the day, your most important tool is your mind. It is imperative to keep level-headed in order to make the right decisions.
  • Trust your instincts:In difficult situations you don’t always have time to think through all of your options. In my case, if I would have stopped running to evaluate the situation, there is no way I would have made it.  Many times, you will be forced to react, and you must trust your instincts.
  • Do or do not:I always tell my kids that some of the most important advice is from Yoda; Talk is cheap, either do or do not.  If you are going to do something, commit and do it. When my back was against the tree, I had a choice to survive, I went for it and fortunately it worked out.

Summary

The moose is a stark reminder of the challenges and uncertainty ahead. The year of the moose is just getting going and will not end without considerable uncertainty and pain. The pandemic and subsequent shutdowns have forced the economy into a crisis that will not be resolved as quickly as the markets are alluding.  There is no doubt that the year of the moose has plenty of energy left in the tank to wreak havoc.  Now is the time to ensure you prepare, have the right mindset, trust your instincts, and execute so this year does not kill you, and only becomes a pain in the rump with some scratches and bruises like it did for me.  Be safe in the year of the moose.