Thursday, June 16, 2011

No credit, no cash, no terms.

I've been thinking a lot about that award-winning comic shop that recently went public with their troubles and asked for help.

I don't wish to kick them while they are down; thus, I won't use their name. Nevertheless, an object lesson is an object lesson.

Something was nagging me about the story, more than I had talked about before. This morning I realized what it was.

There seemed to be no awareness on the part of the owners that just getting back into the black -- into NOT losing money -- is only the first, and maybe the easiest step.

Paying back all the money owed -- the angel investors, to loans, to credit cards, and to suppliers -- that's the real bitch.

What bothered me in reading a description of their woes was that there seemed to be little concession toward austerity.

I'm not going to pretend I'm a paragon of thrift -- for one thing, there were hundreds of comic shops in the great collapse of comics in the mid-90's who went through the same sort of crisis.

But I do know that I had to cut back -- really cut back.

I had no credit, no cash, no terms. I was cash on delivery, and I had no margin for error. None.

A full 40% of my gross profit went toward debt for seven years. It was a long, slow, agonizing process.

But I went ahead and did it because I felt that the store itself could provide a living and that I had learned enough lessons that if I could just get through, it would pay in the end. It was a trial by fire.

I think results have proven I was right, though having the Great Recession come along just as I was crawling out of the hole wasn't helpful.

But what I remember was being extremely austere. Cutting every unnecessary expense. Working every day straight for seven years. And so on.

I see no evidence that the owners of the above mentioned shop are making the necessary austerity measures. They appear to want to continue to do business as usual.

My advice, painful as it might be for such a lionized shop, is to give up trying to be a 'model store' and try instead to be a simple, functional store.

Because it's going to take years and years and years to pay back the debt, to climb out of the hole they've dug for themselves.

If they aren't going to make true changes, then any money they beg for is just money down a rat hole.

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