On today’s show we’re going to make an important distinction between two words that are often used interchangeably but have vastly different meanings.

The two words are “pain” and “damage”.

If you hit your thumb with a hammer by accident, you will experience pain. In fact, the pain will be so acute that you can think of little else for the next few minutes. Eventually the throbbing subsides and you can get on with your day.

I know the weekend handymen are cringing as I’m describing this. I know you can clearly visualize the last time this happened and the mere mention of it immediately takes you back to that moment when the hammer slid sideways off the nail and made contact with your thumb. No doubt you were in pain.

But if you hit it really hard and you actually break a bone, then the impact is much longer lasting. You might have done enough damage that the impact could be permanent.

The context of today’s discussion is not your thumb, but the economy. There’s no doubt that individuals and companies the world over are experiencing economic pain.

The bigger question is, where in the economy are we experiencing damage?

When Hertz Rent a Car has next to no clients for two months, they’re experiencing economic pain. When they’re forced to seek creditor protection using bankruptcy laws, they’re experiencing economic damage.

Some companies manage to convince a bankruptcy judge to restructure some debt and then re-emerge from bankruptcy as a viable business. This takes time. It results in a shrinking organization. In other cases, the bankruptcy judge will argue that the business is too far gone to ever recover and will be forced into liquidation. At that point, the damage is permanent.

Now you may not have the ability to singlehandedly save Hertz.

But companies don’t need to be over-leveraged like Hertz in order to experience damage.

I’m going to tell you the story of a restaurant named Stonefaced Dolly’s. This restaurant has been a fixture in little Italy for a few decades. It’s a family owned restaurant and multiple generations of the family are involved.

The problem is that the founder of the company is now 75 years of age. They have three locations. The owner is tired. He doesn’t have the energy to restart the business when the economy re-opens. He believes that re-opening is going to involve some heavy lifting and he simply doesn’t have the emotional fortitude to go through that at 75 years of age.

He is not alone. I’ve spoken with three restaurant owners in the past few weeks. All of them are thinking of throwing in the towel. They’re not bankrupt. They’re not in extreme pain. They’re just tired.

But when these businesses which have no succession plan, no sale plan, and no viable path to re-opening, they just die.

This folks is the very definition of a bargain. When a significant percentage of restaurants close because they can’t see a way back, those that remain will eventually have an incredible amount of business coming their way. That may not happen in a month, or maybe even six months.

Economic pain is becoming economic damage. That damage is occurring for a variety of reasons. In some cases, the businesses were carrying too much debt to survive the current market conditions. In some cases, their competitor got a bail-out check and they didn’t. But in some cases, the owner is just tired. The opportunities to find viable businesses for pennies on the dollar are becoming apparent even now in the early days of this pandemic.