Why most small businesses don't survive.

This morning, I mentioned I was letting go of my list of downtown business Comings and Goings that I'd been keeping for the seven years of the Great Recession.

I mentioned that "most" small businesses don't survive, downtown or anywhere else.  I'll actually expand on that assertion and say, almost no small businesses survive.

Maybe my standards are too high, but I think a successful business is one where the owner makes a living for a career.  I'm aware that not everyone approaches business that way -- that some have limited time horizons.  But at least, as far as I can tell, very very few businesses last more than 10 years as a going concern.

Service businesses seem to do best.  Retail after that.  Restaurants have it the worse.

But my assumption is that business that is doing well for the owner (either monetarily or emotionally) usually doesn't close down.  No matter what anyone says.  (Except for burnout, and more about that below.  Just to say, working yourself to burnout is also a failure.)

I'm now in my 32nd year of managing or owning Pegasus Books in downtown Bend.  It's been in the same (expanded) location for the whole time. 

And I have some observations about small business that maybe somewhat reductive and simplistic, but I think get to the root of the matter.

First of all, to me it doesn't matter why you close down. You can maintain you had a "successful" business because you were making money -- but in my opinion if you close down you didn't have a "successful" business.  (The only exception to me is if you sell out or close down for retirement.  Or I suppose if you make a huge profit selling your business -- which is so rare as to be barely worth mentioning.)

I think there are two equally valid reasons businesses fail.

Lack of money, of course.

But equally important is burnout.

The two are related of course -- not making money leads to burnout, and burnout leads to not making money.

So here's the crux of it.  In order the making a living in a small business, you have to put in time, energy, and money.  You have to work hard.  You have to take on risk.  You can never settle, but constantly have to change things, add things, drop things, and grow.  It is a constant struggle.

If you don't do the above things, you will fail.  I guarantee it.  I've seen lots of businesses fail because they don't want to take on risk.  Or they don't want to change and adapt.  Or they want to hire managers rather than work the store themselves.  Or they take too much money out of the store and don't replace inventory, or fail to invest in the necessary upgrades.

But the Catch-22 of the matter is that if you do all the necessary things to make enough money to make a living, you constantly risk burning out. Constant change and risk and hard work and on and on takes a toll.  It ain't fun after awhile.

What I've noticed is that so called "successful" business that suddenly close up -- you know, because of "other" opportunities, are usually people who went too far in promising the customers everything in the world.  The more promoting and adding on and working you do, the more you risk burnout.

So there is a very fine line between Burnout and Success.

My way of handling this is to diminish anything that makes money but is unpleasant if I possibly can, and instead, to accentuate things that may not make as much money but are pleasant.

Obviously, this is a pretty fine line, but I recognized early -- because I was pressed up against the wall -- that hating my business was at least as dangerous as not making money.

I always want to tell the newer gung-ho businesses to be moderate.  Don't take too much money out of your business; work it as much as you need to, but don't overdo it.  Don't make tons of promises -- or offer too many extra services.  Stick to doing a good job on the basics. Ask yourself if you will still be comfortable offering such services five or ten years down the line when it no longer has a beneficial effect but is taken for granted. Take on risk, but not too much. 

In other words, don't underestimate the danger of burnout in your pursuit of money. 

If you own a business, you want to like your business. People will reward you if you like your business -- they'll pick up when you don't, or when you're being cynical, or when you are on your way out the door. 

So that's my simplistic answer as to why most businesses fail.  They either don't make money -- or they work so hard for the money, they give up.

Letting go of Comings and Goings list.

I've been keeping an accounting of downtown business's Comings and Goings for the last 7 years or so.

Since 2008.  It was a scary time. The economy was crashing.  I didn't know what to expect, and I realized that I could never quite remember when businesses arrived and when they left.

So I started keeping a simple list.  Non-judgmental and objective, without trying to explain why and wherefores -- just a list of who was moving in and who was moving out.

Well, it looks to me like the Great Recession is over.

What's interesting is that the downtown district never did have a very high vacancy rate.  Chuck Arnold from the Downtowners and others were concerned that my list wouldn't reflect well on downtown, but if anything it did the opposite.

The list showed the strength of downtown, not the weakness.  There were always more Comings than Goings.  Downtown showed a real resiliency that was somewhat unexpected.

Keeping what I'd hoped was an objective list only showed the truth, which was that downtown proved to be an attractive place even in the midst of a Great Recession.

There was a lot of turnover, but I'm not sure that the rate of turnover was that much worse than normal.

Normal turnover is probably more extreme than people think.  The list exposed at least that much.  Most small businesses really don't make it.  But that has always been true.

I'm glad I kept the list, if only for my own curiosity.

I've stepped back from the business these days, and I'm really not in touch with what's going on.

I've always been very very careful to list "Goings" only after a great deal of confirmation.  Telling people that a business is leaving if they aren't could be very destructive.

So because of that carefulness, I have to wait, and by the time it comes to pass, I'm on to something else.

There is another round of turnovers downtown, but I'll let you guys figure that out for yourself.

Time to move on, folks.  I hope you found it edifying.

Found two lost chapters!

I've been saying I've had two careers as a writer, but I've always been a writer, I guess.

My first career was from the late 1970's to the early 1980's when I had three books published, and three other books finished.  I also started at least two other books and got a fair way in before I quit.

Then...I started writing again about 3 years ago.

But just before I got serious, I'd also gotten a good start on two books which I had rather liked, but abandoned.  One book had five chapters, the other seven chapters.  One was missing the first chapter, and the other was missing the second chapter, which is pretty disheartening. 

I'd given up on them.

After spending most of the morning trying to find a way to recover lost files, I gave up and dug into my closet.

Now as most of you know, I have been writing a blog every day for 8 years now.  But before that I had been keeping notebook journals for probably 15 years before that.  I actually wrote more in those journals than I do on my blog.

I also found a couple of drawers full of random writings.

Once I started looking through my 'business journals' I discovered that there was quite a bit of fiction in there.  Just random things.  Some bad poems, some beginnings of stories.

But lots of it.  Some went 5 to 10 pages.

Thing is, I have absolutely no memory of writing most of them.  Some of them are pretty damn good starts.  Intriguing.

I also found a notebook which contained by some miracle the two missing chapters in the books I'd gotten a good start on -- they are in rough, hand written form, but they exist!  My subconscious must have realized this, because I really don't know why I started leafing through all the notebooks.

I think I can safely say I never really did stop writing -- I just didn't try very hard to finish anything.

Which is why it is such a rule of mine now.

I think I'm going to see if I can't recover some of this lost material on the side.  At least the two abandoned novels.  Why not?

Writer's group is invaluable to me.

Read chapters 4 through 6 of Tuskers II to writer's group, and they seemed to like it.  I had a time problem that I need to fix, but other than that...they especially seemed to like the little surprise I spring at the end of 6.

The new member, who was horrified by my horror tinged first chapter, "Liked this one much better.  You didn't kill anyone."  Heh.

Interesting to see what she was confused about, and how much I need to inform the uninitiated reader into the second book if they haven't read the first book.  However, I don't want to warp the book trying to do that, because I really doubt very many people are going to read a book entitled: Tuskers II without reading Tuskers I first.

The "problems" with this book, which come from rewriting, come later in the book, so I'll be interested to see if those chapters work as well.

Writer's group is invaluable to me as feedback.  Even just reading something aloud makes the whole thing clearer to me.

Sometimes as I'm reading, like last night, I'm thinking "Oh, my god, this is slow....." and so I wait for them to tell me that, but usually I'm harder on myself than they are.

When they are hard on me, I know I have a problem.  I've had several stories that I loved that they pretty much tore apart (in a nice way) and I knew they were right.

Unfortunately, I usually only get the writer's group help on the first half of my books because I can only read three chapters every two weeks and I write faster than that.  But better the help I'm getting then not, and the first chapters are awfully important.

But it's always been nice to get feedback of any kind every couple weeks or so.  Writing can be pretty lonely otherwise.

Gimmicks are a bad sign.

A friend pointed me in the direction of a new book venture which sounds interesting.

Basically, each accepted author writes a book, and then squares off with another author, with the winner moving on to the next round.

I can see how that might generate sales.

But...well, it's a flat out gimmick, and my experience with gimmicks in my business is that they are sign of failure.

Any product that depends on gimmicks to succeed is in trouble.  Gimmicks might work at first, but they quickly loose effectiveness, and then the ante needs to be increased, and so on and so forth until no one responds anymore.

That is, if the base product won't sell without gimmicks, it is probably doomed.  In fact, the gimmicks, while appearing to revive the product at first, eventually cause its downfall even faster.

I wonder if the book industry is in a race to the bottom.  Following the example of the music industry.

The music industry continues to decline.  None of the things that was supposed to save them has apparently worked.

Don't give me the exceptions.  Exceptions don't prove the rule.  There are always exceptions.

A healthy industry doesn't work if only the exceptions work.  A healthy industry is one in which the mid-level works effectively, and where even the lower levels provides enough incentive to keep trying.

Our hyper capitalistic environment has given success only to size -- the mega corporations. Or the exceptional -- smaller entrepreneurs who work harder and are smarter than the average bear.

So we've set up another industry to follow that example.  Not that book publishing was ever easy, but there was a time when mid-list books were a viable alternative.

I have no solutions.  I'm wondering if there is one.  

Every book is an experiment.

I've stuck to my 2000 words a day goal as much as I can.

Nobody's Killing Me has been a strange experience.  It may be the most complicated plot I've ever attempted, but I've probably done the least planning.

I'm winging it, letting my subconscious create the solutions and hoping that I can consolidate all the changes later.

Much of the plot is being deliniated by dialogue, which is also very unusual for me.  I'm waiting for characters to say things, to tell me what they're doing and thinking.

I don't have a sense of depth to this story, which is disappointing, but I'm going to finish it anyway.  If I ever try to publish it, I'll need to go back and fill it out.  It needs description and development.  I've got the barebones plot down, like I said, mostly with dialogue.

But I'm going to spend the next 2 weeks finishing the book.

Because 1.) It is important I finish, and it may still surprise me.

and 2.) it's a worthy experiment.  Every writing experience seems to bring out something new, and this one is no exception.

I know it's a cliche, but every book writing experience really is different.  I'd love to bottle what I did with Tuskers, (it emerged quickly and completely) but it doesn't seem to work that way.

If my writing career was my store.

If my writing career was my store, what would I be doing?

1.) Building content.  Getting as much as I can get online, developing each product line as best I can, but getting it done.  Having so much choice that the customer can't help but find something they like. Making the content different and quirky and idiosyncratic.  Doing it the best I can, but making it my own.  People find that kind of authenticity attractive.

2.) Diversifying.  Doing as many different types and genres as I can do.  At the same time, doing the biggest genres with the understanding that others will get the lion's share.  Add up enough sales in each category, and I'll have a viable business.

3.) Being patient.  It takes a long time to develop a following.  It doesn't happen overnight.  I'll have to be consistent and never give up and always keep up the quality.  The customer can tell if I'm not interested in what I'm doing, so I need to be sure I'm doing interesting things.

4.) Writing what the other guys aren't.  So everyone is writing fantasy and romance, but maybe not as many are doing westerns or horror or ... well, anything else the big boys aren't doing.   There are undoubtedly sub-genres that aren't being exploited.  Historical Horror?  Whatever.

5.) Making it simple.  Not doing all the extraneous things that everyone else says I should and must do.  Promotion and advertising are probably a waste of time and effort. I need to create the content and wait for people to stumble across my offerings, and hope they'll come back.  HOWEVER: I do need to find a platform where they will find me.  And that won't be easy.


It took many years for Pegasus Books to become truly viable.  I had many setbacks.  There were times when I wondered if I should continue, but I kept on going, and eventually I was established enough to earn a living. 

Obviously, this is a completely different venture, but the parallels are also pretty obvious.

I haven't done anything so far that detracts from any of the above, except perhaps to try the promotional route.  But I did that at the store too, until I realized that none of it was working.

I will have to find a way to get onto main street -- which has been my biggest advantage at Pegasus Books.

I need to find a place where people can find me and my quirky offerings. 

I just have to keep my eyes open and find where that is.