Peter Morales and his wife, Rachel, were the owners of Tumbleweed Signs, a sign manufacturing business in Fort Sumner, New Mexico. Peter had operated the 11,000 square foot small business for over forty years, and it had a strong reputation among government, commercial, and individual customers. The business remained stable until the COVID-19 pandemic, when it experienced a drop in consumer demand coupled with an increase in supply chain costs. Tumbleweed Signs received support in the form of fiscal policy from Congress as well as monetary policy from the Federal Reserve. However, fifteen months into the pandemic, in June 2021, the business was at its lowest point. Peter and Rachel cut the staff from sixteen to eight, and they were uncertain whether the business could survive.
Peter and Rachel talked about several options. The first option was to keep the business going, which would likely involve assuming more risk by taking on additional loans. The second option was to shift the focus of the business to a new market segment, namely online sales, but such a change would also present some risk. The third option was to shut down the business temporarily, but there was no guarantee that they’d be able to reopen at some future point when the economy would sufficiently recover. The fourth option was to sell the business to an investor who had expressed interest in buying it; while this could provide Peter and Rachel with income to move on from a business with an uncertain future, Peter had devoted his entire life to the business and he was not fully prepared to give it up.