Pegasus Books in that stage of deep summer where anything I order will come due in September. Pretty much no matter what I do, I'll probably see a 20 to 25% drop from the current level of sales come Fall.
Whatever I spend right now will have to come out of the lower cash flow in few weeks, so if I want to earn an August profit instead of letting it get eaten up by a cash flow shortage, I have to cut back. So I have to wrench my thinking away from the summer phase and start thinking fall even though it's a 100 degrees outside.
Dog days of summer, pretty hard to get motivated.
I was going to write an entry called, 'In praise of inefficiency," about how letting things slide can actually work in my favor. I tend to make money by not spending it. Guessing actual sales, or seeing an actual cause and effect to spending, is just too difficult.
Besides, I can always see a million little things that could improve the looks of the store, and a million little things that I could add to the inventory. A million little ways to spend money.
It took me way too long to recognize that having the best possible store is not the same thing as having a profitable store. The goal should be to have the best possible store that still earns a profit.
I've always said, there are three things every store has to do: pay the overhead, keep up the inventory, and hopefully earn a profit.
As anyone who has been in my store can testify, I've always put inventory first. Too me, everything flows from that. Secondly, I make sure that my overhead is paid in full and in a timely manner, and I consider my basic wages (the minimum wage part) as overhead. Only then do I think about profit.
I think the fact that I'm still in business 25 years later testifies that this is the right priority for me. I've seen businesses spend way more on overhead than me -- the best of fixtures, heavy advertising, many employees. I've seen businesses that obviously put the emphasis on profits -- they don't last long. And I've seen businesses that go crazy on the inventory.
While I was gone on vacation, someone came in and bought all the Pokemon packs. I came in on Wednesday, and realized that if I didn't order more, I'd be out for a week. Which has probably never happened since Pokemon came along about 9 years ago. But I also realized that someone else had bought a bunch of the little Pokemon figures I bought too much of, and that we have a whole album of singles we could turn people too, and that selling either would be more profitable.
It's agony for me to not have a product in stock that I think will sell. The final clincher was that a "new" wave of Pokemon is coming out next week anyway, so if I'm going to spend the money it might as well be on the new stuff.
I think I have always been a little too quick on the spending trigger. A little too eager to get the newest thing, to make sure no gaps develop, to be the "go to" outlet.
But by being just a tad bit more slow -- inefficient if you will -- I can actually earn a bit more profit.
I know that isn't true, exactly. I'm probably just messing up the terminology. But I do know that being Johnny on the Spot hasn't always been the right decision. And being "Mr. I'll Get Around to It Soon," sometimes has been.
Don't tell anybody....
12 hours ago