August was a real good news, bad news sort of month, but mostly good news.

It was probably the most profitable month in the history of my business. By a hefty margin.

But the bad news was that it the first decline in sales (aside from the 'renovation month' of June, 2006) since early 2004. But the decline came at the expense of further profits, instead of putting us in the red. (Though if I had gone ahead with the second store, a decline in sales would have really freaked me out.)

I guess I'd be concerned if the profits came at the expense of sales, but I'm pretty sure that isn't what happened.

We had a 40% drop off in sales in the last 7 days of the month.

Maddening, but unfortunately not unusual. It's the sort of drop off that happens on a regular basis for no discernible reason. These drop offs are why it is so damn hard to make money in a small business -- you're buying at a certain level of sales, and if sales drop below your buying levels, it costs you. They are counterbalanced by the occasional unexplainable surge in business, but you have to be smart enough to bank that money instead of spending it -- and I usually can't resist the urge to buy more stuff with the extra cash from a surge.

I trust my instincts on these things, and I think this was just one of those things. Nothing to do with how I was ordering, or with the housing slump, or any of that.

Some of my categories which I was emphasizing were up, some of my categories which I was letting slide were down. Comics have flattened over the last quarter after a pretty steady climb since 2000. It was inevitable. Sports cards last year in August were huge, but that was pretty much a fluke. The steadiest categories and the most profitable were up or at least even.

So overall, sales were probably where they should be. And I should be able to continue the profitability. I have all the categories fully stocked, and steady business, so I feel pretty good about our prospects to break even over the fall and have a good Christmas. I'm hoping to draw down debt to almost zero by the beginning of the year.

I do sort of expect the local economy to have an impact starting next spring, but I don't expect it to be dramatic.