2.) Stick to Your Original Goals
I'm going to jump from the exciting beginnings to the near ending of my business.
In 1992, 8 years after I bought the store, I was home watching a program about small business on PBS. A guy was fishing at a pond (my memory has it as Walden Pond, but I think that's an imagined embellishment.) The guy's business had just failed and he was giving a running commentary of how he was feeling and what he'd thought had gone wrong.
It scared the hell out of me. What I was hearing was an eerie echo of what I was feeling and thinking. I realized I was that close to quitting.
It really shocked me. My stores were going down and I was just letting it happen.
I got up off the couch, drove to the store, took out my price gun and started doubling the prices on most of my main product. As you might imagine, my sales started dropping.
I also stopped bleeding money.
Back to the exciting beginnings.When I was offered the chance to buy Pegasus Books, I went home and
did the math. I'd worked in the store for 4 years, managing it over the previous year. I saw where the absentee owner had sort of dropped the ball
and thought I could probably pick up business.
said that I needed to do about twice as well as the store was currently
doing. I had no doubt I could do that. I thought there was starved-up
But really, going in, I was hoping to earn maybe
minimum wage, at least be my own boss in a nice place to go to
every day. That's all I expected or hoped for and it was enough.
first years were exciting. To be able to make decisions without having
to ask permission, to see how the changes I was making were working. I'd
been trying to write fantasy novels in the previous 5 years, and while
I'd had three books published, it was an agonizingly slow process.
Suddenly, all my creative decisions were instantly rewarded.
The main products were books, games, and comics. Around 1985 I added sports cards. This was before the boom in cards really took off. I rode that rocket for the next six or seven years before it collapsed. (I no longer carry sports cards but I'll be talking about them a lot in this book, because I swear to God I learned every possible negative lesson I could from this one product.)
Sales started doubling and then doubling again. I was undergoing exponential growth.
Someone early on in my career mentioned that the only thing worse than failure was too much success. That didn't make a whole lot of sense to me at the time, but I learned the hard way that it was true. Weird but true.
If you are doubling your sales, you also aren't making any money because every cent you're making is going back into buying product. Cash flow is non-existent. A wiser man would slow down, take some profits, build slowly.
Then again, I saw the opportunity to build the business fast, and so I took it.
Again, most of the details of this growth I'm going to talk about later, but suffice it to say, I grew fast.
That's where I made the big mistake: I opened a second store in a neighboring town, and then a third store in another neighboring town, and than a fourth store in the local mall. Visions of empire danced in my head; my "young entrepreneur" phase began.
Turns out, I didn't really know how to be a manager. Not yet, anyway.
But the real point is, I didn't set out to be a "manager." I had seven employees but they were constantly quitting for no good reason. I had to let a couple people go. Suddenly all my preparations were meaningless. (I'd trained my first manager for six months, he quit after three months when I withdrew the "Incentive" he'd taken advantage of.)
My main job seemed to be running around and plugging holes. I'd turned into the little Dutch Boy, sticking my fingers in the dike.
Meanwhile, the competition in sports cards became suicidal; people selling cards for ridiculously low margins. I made the mistake of trying to compete with them. (When you compete with stupid people then you're equally stupid.)
I'd forgotten what I'd originally wanted from my business: A living wage, (I didn't need much), a pleasant place to work, and being my own boss.
Being a stressed out manager wasn't what I'd wanted to do, but somehow that's where I'd ended up.
It's the great American way that if you are successful, you grow. You expand, you open new locations, you take on staff, and so on.
Well, bullshit to that. At least for me, it wasn't really what I wanted.
You've all probably heard of the Peter Principle: An employee will be promoted to his level of incompetence. I believe the same thing hold true of business owners: He will expand to his level of incompetence.
I'd tried to leverage the success I'd had in my one store into other stores. But there was only one me, and the moment I wasn't around in my own store, it started to go down. I couldn't keep up the quality for any of the stores.
So I did something that was almost as hard as growing---I shrank. Over the next few years I sold or closed the other three stores and concentrated on my one store.
Now, that one store is doing better than all 4 stores used to do, even at their peak. And I'm happy, not as stressed, and feeling somewhat secure. (Knock wood.)
Somehow I'd lost sight of what I really wanted. It was only when I was on the verge of failure that I was reminded of my original goals.
I've tried to never lose sight of them again.
1 week ago