I can't tell you how familiar, almost comfortable, this slowdown feels to me. It's like finding an old, worn coat and an old, comfortable pair of shoes in the closet. It makes me realize that, for most of my 28 years in business, this has been to normal, fall back position. Bear with me as I try to explain, because it will probably sound contradictory.
My first eight years saw tremendous growth -- which put a huge burden on my cash flow. I was always short of money, always short of product. Sales were exploding, almost doubling, but I was nearly always in debt to my ears. Having no reserves, no credit.
Then, it came crashing down, with a short uptick, and then crashing down again. Over the next 8 years or so, I survived on a series of fads, each of which were cashflow management problems, and I learned how to make the most of every dollar.
Finally, around 2000, things started to stabilize at a very low level, and I was able to build my business slowly and steadily, again watching every dollar. It was almost as if I was starting over, this time with a better beginning inventory and tons more experience, and even a bit of credit. Finally, over the last 4 years or so, I've had the backup cash and credit to really do the job right.
You'd think I'd make money when sales are good, but I always seem to find a reason to expand my selection.
I've often thought, the same syndrome that has kept me in the 'minimum wage' level of income is what has kept me in business.
At any rate, it's ironic that I often actually do better when sales are bad, because I'm watching my budget so much more. I'm not as tempted to try to add to my inventory, or to add new product lines. I'm not as tempted to dump all my profits into inventory.
Last January, I had a choice of maintaining my level of inventory and attempting to make a profit, but chose instead to add games and new books. Reduced competition was the spur, but I'd always wanted that as part of my product mix.
It pretty much nixed any chance I'd be able to turn a cash profit for another year. And we all know what happened in August. But I'm not all that sorry about it, because the extra product lines seem to have put me over the top as far as being stable. The revenue coming in covers the overhead comfortably.
The sales dropoff I've seen is almost exactly split, in my reckoning; about a third due to my not adding new product lines, a third due to a natural slowdown in the product lines I carry, and a third due to the economic slowdown. I could probably override any one of these alone, turn a small profit with any two of these, but with all three looking to get worse before they get better, my focus is just going to be on watching every dollar. If it turns into a profit, so much the better.
Still, I'm back to the strict budget maintenance, and if feels very, very comfortable to me. I think my personality thrives on crisis management -- so much so, that I probably put myself in that position. Fear of success? Don't know. Loving the underdog role? Possibly. It's something I'm constantly fighting.
I've managed not to do anything too stupid, lately. The risk of opening Linda's bookstore, the Bookmark, proved to be a great gamble, and I dodged a bullet by not opening a second store myself.
Once I let go of my disappointment in not making a big profit this years, it's on to the challenge of weathering the storm.
6 days ago