Sounds right. Running a restaurant is difficult and the operating margins are small. Combine that with a big drop in customers and I can see a very high failure rate.
My wife just told me that one of the BIG, nationwide-known* dance studios in DC is shutting down. (*Known nationwide for bellydance. It's not like anyone outside of that world would have ever heard of it.)
Fitness/yoga/dance places are getting hit hard, too.
It's not even the operating margins. Most businesses can't survive without customers for a month. It's hard to prepare for "your business will be completely closed, and bring in no income, but you'll still be on the hook for your costs" for a month.
Generally, the bigger the business, the bigger the costs. There's no business that is running such a profit that they can just eat two months of costs.
Even healthy businesses will be killed by this.
My wife's business will survive fine- because it's a home studio and she mostly does private lessons. She has (effectively) zero costs. But it still sucks. If she had rent to pay? She'd have been out of business after 3 months, TOPS. And then she'd also be effectively working for free to recoup those costs, for probably at least 3 months. (Likely longer.)
Can you go 6 months without a paycheck?
