Friday, January 18, 2008

So, is there like a slowdown, or what?

(P.S. I ended up posting the other 6 rules for my bookstore on yesterday's date. Oops.)

Hey, it's only been 2 1/2 weeks! Like reading chicken entrails.....

For me, January is especially difficult to gauge. It's going to feel slower than Christmas, no matter what. I'm left with trying to remember what last January felt like.

Secondly, there are normal statistical variances. The smaller the store, the bigger the normal swings can be; Wal-Mart has so many stores, that variances are evened out. So, a 10% swing could just be happenstance.

Third, for my store especially, sales are often predicated on the product I carry. There have been many the time when sales in my store were going great when the rest of the country sucked, and vice versa.

I could give you sales figures, which are within the 10% variance I talked about above. I could tell you we're down about that much, but frankly, because I've been careful in my buying and because I knew that some of the product I was carrying was cooling, this is pretty much what I expected.

So it's really difficult to weigh all the factors. I also have Linda's store to compare, and the BookMark is doing great, which casts doubts on my 'feelings.'


So with all those caveats out of the way.

Are we seeing a slowdown?

My feeling, and it's completely anecdotal and unreliable is.....yes. I think things are slowing down.

I suppose what I'm really wondering is this: how many of the downtown business, heck Bend businesses, were over-estimations of demand in the first place? That is, I think even if the business climate was going swimmingly, many of these businesses were in for a bit of a surprise.

With a downturn, even a small one, I think they're in for a shock.

Something along the line of: they were expected 1000.00 a day in sales, which was never in the cards. If the business climate was positive, they might still have managed to sell, say, in the 600.00 to 700.00 range. Disappointing, but probably not out of the rationalizing range.

But if sales actually come in at say 500.00, that is going to really hurt. I've been totally surprised by how many businesses have opened in January or so late in December not to do them much good. Wow. Even in normal times, they have six months of slow business to look forward to...

I've always said though, that downtown Bend businesses are tenacious.

It's a slow process. Ask me in a couple of years.

6 comments:

Anonymous said...

Let's define a slow-down, given that you will not.

I have seen a 'slow-down' my businesses six months ago, ... but my stuff leads.

Let's take your min-wage line literally, and assume that you make $8/hr, and do 8/hr's a day, and then let's do a 2X for the hell of it to count your help. So, we're talking $160/day, in gross reciepts assuming that everything is paid for, then lets toss in $2k/mo for rent, and call that $60/day, so now we're talking $220/day, and I didnt' count essentials ( utility's, ... ) so let's say $300/day is your gross receipt pain point.

I suspect when & if your consistently doing less than $300/day gross, then you'll tell us things are getting bad.

Of course some day, you have got to restock, but lets assume now the inventory is paid, and your just selling stuff off the shelves. Then let's assume your average purchase is $5, that's still 60 transactions/day, which ain't happening, ... Ok, so then let's say your doing 30 $20/trans per day,... Maybe on the weekend you get all the biz??

Not to be picking on you dunc, just keeping you honest.

From day-one I called you Ned Flanders, and the reason is-was your as dripping rose colored glasses liberal dribble as dear Ned.

Your one of the few retail bellwethers we have,... So I do find it interesting. Your fear of competition will never allow you to tell the truth, fearful that if things were good someone would take it away, and fearful if things were bad, others would quit spending their money, knowing the party is over.


For me I see the restaurants, I see the boredom in peoples eyes. I know who is doing well and who isn't.

We're still in the high peak of the winter shoulder, let's have this discussion again in a month.

Perhaps there is 20 guys a day, everyday of the month that treat themselves to a comic-book in Bend, on a daily basis, sort of an addiction,... I find that hard to swallow.

Duncan McGeary said...

My dear boy,

This is nothing. If you had walked up to me on the sidewalk in 1992 and blown in my face I would've fallen over.

15 years ago, I was operating with no assets, huge debt, and sales dropping in half. Half, I tell you! It was a near business death experience, which it seemed I fought my way back from one inch at a time.

Not to mention the wasteland that was downtown Bend from 1982 - 1987.

Or the second time sales dropped in half from 1995-1997.

No. This is like having been on the Russian front for a few years, and coming back to the National Guard for storm duty.

I'm only worried that I won't make the profits I was hoping for. Profits that would make me feel much more secure about my next lease negotiation.

But, hell, my sales are up by double over the last few years, while my expenses are up, maybe 20%. (Of which, probably only 10% is unshrinkable.) I literally have a third of my sales, or more, to give back, if it should happen.

But who the hell wants to do that?

Not to mention, all elements of the store are currently working. Having 8 product lines produce sales has really stabilized things.
Turns out, adding books and games was just the right thing to do.

Still, I'm 55 years old, and I'd really, really like to make some excess (if you call savings and retirement, excess) profits one of these days. The only thing I've really been able to do, besides paying my bills and keeping my debt down, is make double mortgage payments for the last 2 years.

I pushed my sales a year too long. I'm afraid I didn't time it right, and have reached for the profits just as they recede. Your not too far off on the 'gross receipt pain point' but you underestimate our sales level by quite a bit.

Sigh.

I have to change my free-spending ways. If I don't, I could have problems. But that's up to me.

Many of these stores in downtown Bend have never seen a real downturn. It will be interesting to see how they react.

Much as I want to bask in the schadenfreude of it all, I'd rather business stayed good.

Unfortunately, I'm suspecting that won't happen.

Duncan McGeary said...

I guess what I'm trying to say; I've been through this before, more than once, and much worse than this is likely to be, and with much less warning and experience, and with way more debt and much less assets.

BUT: Who the hell wants to go through this fucking thing again??!!

Shit.

Duncan McGeary said...

Bilbo, you talk about business dropping in half. You have no idea what that would do to Bend, unless you were around in 1983.

A drop in half would absolutely devastate this town. A drop of 25% would be horrible. People just couldn't survive it.

But because of the 'bubble' nature of my product, I've had half drops in my business three different times.

I hated it. There was no way to come out ahead. You can only survive.

The real problem I'm confronting is that I think business is going to go down slowly over the next couple of years, that it will be hidden as much as possible, so that the fucking perception of Bend as a boom town won't change enough.

Leases are still going up? WTF?

So...that's my concern. The worst of all worlds: slow business, but the perception by landlords that business is booming.

By the way. Commercial real estate is even worse than houses in prices. It's going to be half a decade before we see them drop. I'll be near retirement by then.

So I'm a renter.

Anonymous said...

A drop is a drop. In most of the businesses I still run, I have been taking cash out of long-term financing to pay the bills since summer.

I have seen these recessions many times, I usually let things go 2-3 years until I kill a biz.

Commercial property is a real bitch now, you can't sell it and you can't rent it. Trouble is if you drop the price to zero to sell, its fucking stupid.

Not to be mean to you Dunc, I just want you to tell the truth.

I have various businesses all over the State. I started seeing stuff drop to nil back in May of 2007. Its the biggest drop I have seen since 911. My stuff will always come back first, because it goes south first. I'll be the first to tell you when I start seeing the corporate purchase order's streaming in again.

It's NOT yet as bad as the 1992 recession, and not yet anything like the 1983 recession, but the 1983 was regional, and the 1992 was national. Today its international.

You survived for 27 years so you say, you obviously have been through tough times, the deal this time is cash to hold you through.

I still say you'll not be able to afford your help. Just my guess, employee taxes, and withholding is the hardest part of a small business.


Good luck, I wish you well, I want to see you survive. It's just that you I also want you to tell the truth.

It's going to take more than Twisted-Little-Shrub (baby-bush) giving everyone $300 to fix this mess. It's going to take time.

I think money will become more dear, the biggest problem is the HELOC is gone. This means all the RV shops will close along I97, ...big ticket items will hose.

I love bookstores, and I think your wifes shop is a great service to Bend. I hope you survive another 27 years.

Duncan McGeary said...

The whole point of this blog is to be candid. If I can't do that, I'll just quit. I don't think I'm any smarter than anyone else, but I am willing to talk about what's happening.

Anyway, hindsight is 20/20. Trouble with predicting disaster is that you'll almost always be wrong in the short run, but always right in the long run.