Wednesday, November 28, 2007

You know that scene in the old timey movie western where the two gunfighters are walking down the street toward each other, and the bystanders are all standing there slack-jawed, and there's that one guy in the background who is edging for the exits?

That's me.

I swear, I pick up the paper each morning and another commercial development is announced.

In contrast, over the last three months, I have reversed course.

My focus is no longer on higher sales, but making sure all the bills are paid.

I'm ordering what I think the store needs, and not what I simply want.

I've changed the ordering from 60% pre-orders, 40% reorders to 40% pre-orders, 60% reorders.

I've set a strict budget and I'm sticking to it, whereas before I'd break the budget if I thought there was reason enough.

And so on.

Most importantly, it's a change of mind.

So far, any downturn in business has been for internal reasons. I don't really believe that the bubble pop has affected me, just yet. But I'm absolutely convinced, now, that next year will be a different story.

I'm very thankful now that the credit crunch occurred in that month I was waiting for that second lease. That, plus the lousy terms, were enough to make me change my mind. It would've been a disaster to open a second store now. As it is, I probably over-ordered by 6k in preparation, and it's going to take all the fourth quarter to bleed that out of the system.

I'd thought we'd have breathing room through Christmas, and I still do. People always spend money at Christmas, barring a complete disaster. But the drag has started, and I'm starting to feel it. So I'm getting a good head start on clearing the books.

I've never actually done it this way before. I've done all the cost-cutting measures before, many times, but always because I had no choice. I've never gone this way when I was still doing pretty good.

But I also told myself I wouldn't get caught flat-footed again.

And there is no real downside to cutting back. I can always pick up my spending, if sales stay strong. But it's nearly impossible to cut spending once I've committed. There is a minimum 4 month lag in the system.

Sales are actually going to be up this month, on a YtY basis, which is really encouraging. It means my maintenance budget is sufficient to keep sales at a high level.

This is that moment in the business cycle when it doesn't appear than anyone else is concerned, that they are going full speed ahead damn the torpedoes mode.

It takes some real confidence to go the opposite direction.

1 comment:

IHateToBurstYourBubble said...

It would've been a disaster to open a second store now.

I think this is a general truth around here. Unreal rents, flat to lower sales... so many will perish in the next year.

That little "7-11" convenience store in NWX has to make it's owners wonder "What happened to the "Bend Dream"? I've never seen a single soul in that entire complex... yet they continue to build commercial space over there. We're creating the high vacancy rates of the future.