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The Piñata Recovery - Exploding Dollars

Written by CMG News Contributor, Doug Carleton

Barring the total unforeseen, as of this writing, the checks in the upcoming stimulus bill are expected to be $1,400. There are also other very important items. One is the extension of unemployment benefits through the end of September scheduled to expire mid-March. After the first round of stimulus checks, spending increased and the economy began to grow at a stronger pace, even though a considerable amount was also put into savings or used to pay down debt. So, here we are now with that piñata hanging in front of us, so let's peek inside and see what we find.

  • The likely addition of $1,400 payouts

  • The personal savings rates for consumers at record levels. There is a tremendous amount of cash sitting in people's bank accounts.

  • Among the debts that have been paid down are credit card balances. Low credit card balances can make customers less hesitant to spend.

  • The Conference Board's Consumer Confidence Index is continuing to rise. Confidence in a sustained economic recovery is beginning to take hold, which could alleviate consumers' need to keep cash reserves for "just in case" scenarios.

Trumping everything is the increasing number of people receiving vaccinations against the Covid virus and the fact that a third vaccine is now approved and in production. Also, Pfizer and Moderna are substantially ramping up their production. Up to this point, one of the biggest problems has been the severe lack of vaccine supply. However, that is now improving daily.

The magic of herd immunity still exists, and the more people that get vaccinated, the closer that goal is reached. Surely, certain restrictions will begin to ease, and the masses will be out and about, eager to enjoy the things that they have been deprived of for over a year. A combination of large amounts of cash in peoples' pockets, lower credit card balances, and increasing confidence in the outlook for the future are now in the near future. Here are a couple of thoughts to consider:

  • Are you and/or will you be ready to take maximum advantage of a rapid and dramatic upswing in spending?

  • Are your website and e-commerce platforms (and m-commerce) and apps maximized? Are they easy for consumers to navigate, load quickly, and make the final purchase as simple as possible? Will the transactions be seamless across all of your platforms?

  • Do you have enough products should sales grow faster than expected? Can you easily access additional products/inventory?

  • If you have had to lay off employees, are you able to adequately re-staff if needed to meet the increase in activity?

These are just some of the considerations you need to be addressing to prepare for a rapid recovery. The piñata is hanging... don't miss the explosion when it happens.


This blog entry is a slightly edited excerpt from Doug Carleton's 'The Daily Life Of A Small Business Owner' series. Doug was a mentor with SCORE, Startup Virginia, and Lighthouse Labs, and has 25+ years of experience in small business finance including 12 years in SBA lending. To contact Doug directly, please email him at


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