Thursday, May 31, 2007

When I signed my latest lease, I made plans to push sales as hard as I could for 2 years, and then spend 3 years trying to turn a profit. I had a sales figure in mind, which I thought would be a stuggle to reach.

We blew past that figure in the first six months, and then kept going.

At the two year mark, I threw the plans out the window and added two more product lines, which I've been establishing over the last year. We are now a full 25% higher in sales than my original goal, and growing at the 15% a year rate.

So now we've hit the new revised, this is the future, crunch month. July 1 is the actual starting point, but I'm going to use June as a dress rehearsal.

It may be a purely selfish reaction, and possibly short-sighted, but I do believe that the consumer economy in Bend still has at least six months of strong life in it. People just don't seem to be getting the bearish message. Everyone I talk to is either not aware, doesn't believe it will affect them, or doesn't care. (Please don't tear me a new hole for saying this -- I totally believe the housing bubble is bursting and the effects will be dire. I'm talking about the consumers who buy MY product.)

Now I know this housing slowdown is going to hurt, but as long as the consumer is in denial, I'm going to still make sales. I'm pretty sure that even if the local economy tanks, that I will still see some good sales from the tourists over the next six months. It would be the first half of next year that I would feel it.

And what I sell makes a difference. I have a recession resistant product line --that is, historically, my sales have been good in down years, and not so good in boom years. (Indeed, what I'm hearing is that many downtown businesses are slow right now, when we're really doing better than expected.) Except where there was a huge recession in the 1980's, the macro-economy of the overall economy hasn't affected me as much as the micro-economics of the specific product lines.

Even when the micro-economics change, it takes time. When the sport card market started going down, it took a good 5 years before it became common knowledge to the consumer, when comics went down, it took a couple of years, and so on. What really pleases me is that we don't have a single product that I would call 'fad', nor have we for at least 5 years now. I never thought I would say it, but I think my store is better off without the Next Big Thing. (Of course, if one came along, I'd try to tap into it.)

It so happens that the very same preparations I need to make to survive a drastic downturn, are the very same preparations I need to make to turn a strong profit. I prefer the profit, but frankly wouldn't be totally surprised by the former. Disappointed, obviously, but I'm really fatalistic about it.

I'm feeling like I'm in a speeding car which is headed for a cliff, but which has run out of gas. It's a physics equation beyond me whether the car will stop many feet from the edge, roll to a stop inches from the edge, tip over the edge, or go roaring over it.

It's also interesting that some of my competition has fallen by the wayside in the last year or so.

Two years ago, I had four direct competitors to what I sell. I predicted in my business diary that at least half of them would be gone by summer of 07. Three of them are gone.

I'm not cheering their demise, though I'm surprised it is happening at a time when we are doing so well. But I do like confirmation that many of the decisions I've made over the last five years -- painful as they were at the time -- were obviously the correct ones. I like that our sales were increasing over the past couple of years in the very categories that my competitors were carrying. It's the satisfaction of the tortoise crossing the finishing line, if you will.

The second half of the year is always better than the first half for my store, no matter what, so I'm looking forward to it.

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