T'aint nothin'

Having stayed home all day yesterday, watching F.B. (Missed the N.O. comeback over Wash.; turned too soon....) I thought the roads would be way worse this morning.

Come on, that t'ain't nothin'.

Reading all the news reports of crashes, I left ten minutes early -- and I got to work 10 minutes early.

Combined with my experience driving back from San Francisco awhile back, I'm fearful of other drivers. I mean, there was a few snow flurries, hardly anything on the road, and yet some nimrod had managed to go completely off the road.

What happens if --no, WHEN -- we have REAL snowfall?

This may be old foggieism; but I could swear we used to get a lot more snow than this, and often.

Small businesses aren't buying the hype.

A couple of very interesting articles about small business, which I've printed below, which combined with the Bulletin's article this morning (Index Reflects Region Still Reeling) ought to give anyone thinking about opening a business in Bend second thoughts.

Thing is, people don't open business based on economic conditions. They open businesses because they want to. Because it's their dream. Because they think they'll do better than everyone else.

How their businesses actually perform, on the other hand, has everything to to do with economic conditions. Which is why there can be such a disconnect between new businesses opening, and how existing businesses are actually performing.

Strange to say, I think we're still benefiting from the froth of the bubble. How long can froth exist without underlying strength? For a very long time indeed. Years. Because plans are made early, and people are reluctant to give up on their plans even when conditions change. Because having started a business, very few people throw in the towel without a fight. Because there is always hope things will turn around.

So the froth, the idea that Bend is a great place to live, that downtown is busy -- that can keep things churning and churning, and spin off yet more dream stores, and on and on.

But eventually, gravity will set in. Eventually coyote will notice there's no ground under his feet. Eventually the steady grind of stagnant or even falling sales will drain the willpower out even the most optimistic owner.

I've been through this before. I seen product lines drop in half, overnight, and yet watched an increase in competition. Made no sense, but the froth created these stores -- and reality eventually pulled them down.

I had to finally recognize that business was never going to return to previous levels. Instead of beating the dead camel trying to get to the next oasis, I'd abandon the poor critter and jump on a donkey instead.

In other words, I adjusted. And I accepted limitations. I accepted that it might take a good long time, and a whole lot of work and effort and stick-to-it-ness to get back to square one. And even more work and effort and hopefully hard won experience to go beyond that.

Read the two articles below, and realize that not only is Bend not better than that, but Bend is going to take much much longer to recover. Read the Bulletin article: "We feel into a very deep hole, and it's going to take a long time to pull out of that."

True enough. But exactly how are we going to do that?

1.) We need a solid replacement, or foundation, for future business.

2.) Even if we find that solid replacement, (by no means certain), it will take a very long time to develop; to fill the hole. (Personally, I think Central Oregon is stuck with tourism and retirement; minimum wage job generators....and I've positioned my store with that in mind.)

Believe me, I'm glad that so many people are willing to open new businesses downtown. It's good for my business. I hope I'm wrong, and they all have a long and prosperous future.

But I do sort of want to have a moment with them. Sit them down. Hand them a coffee to drink, look them in the eye and say, "Um. You realize business is slow right now, right?"

Just that.

Because I really wonder if they have fully thought it through.

November 2009

Economic Confidence Plunges; Low Expectations for the Holidays

November 2009

November Highlights:

• The mood of small business owners generally has soured in November for three straight years, as economic confidence dropped from October to November in 2007 and 2008. The November 2008 index of 67.5 is the low point for the Watch since it started in August 2006.
• 52 percent of owners say they have experienced cash flow issues in the past 90 days, up from 44 percent in October. Forty-one percent of owners say they have not experienced cash flow issues, which is the lowest response in this category since the Watch began. The remaining 6 percent said they weren't sure.
• 53 percent of small business owners see conditions getting worse in the next six months, up from 43 percent in October; while 19 percent report that conditions are improving, a sharp decline from 29 percent in October; 23 percent see conditions as the same, and 5 percent weren't sure.
• 62 percent of small business owners rate the economy as poor, an increase from 55 percent in October; 30 percent rate it as fair, and 8 percent say it is good or excellent.
• 53 percent of small business owners think the overall economy is getting worse, up from 44 percent in October but still significantly lower than the 69 percent of owners who felt that way in February 2009, the last time the Watch index was this low. For November; 28 percent say the economy is getting better, down from 35 percent in October; 16 percent see it staying the same, and 3 percent are not sure.

Only 11 percent of Small Businesses Expecting Increased Sales This Year

• Small business owners have a glum outlook on the holiday season: Only 11 percent expect to see more business this year over last, while 46 percent of them are expecting less business than last year, an increase over the 40 percent who said the same in November 2008; 39 percent anticipate 2009 sales will be about the same as last year, and 4 percent weren't sure.
• For many small business owners, the holiday season is not necessarily their busiest time. A majority of owners, 56 percent, say that the holiday season falls somewhere in between being their busiest and the slowest time of year, 29 percent say this is their slowest time, and 13 percent say it is the busiest.

Discount Department Stores Still Most Popular for Holiday Shopping

• This month the Watch also polled 3,000 consumers on issues important to small businesses. When asked to choose from a list of places where they expect to do most of their holiday shopping, they chose discount department stores, 30 percent; department stores, 18 percent; warehouse and club stores, 7 percent; small retail and specialty stores, 7 percent; electronics retailers, 5 percent; some other type of store, 9 percent; not sure, 23 percent. These shopping-preference percentages were little changed from what they were in 2008.
• When it comes to the Internet, 57 percent of consumers said that they will do at least some of their shopping online this year.

Squeeze on Credit

• 24 percent of small business owners say that they extend credit to customers, and 73 percent of those that extend credit say that they have customers who have delayed or asked to delay a payment in the last three months. This is largely unchanged from December 2008 when 25 percent said they were extending credit, and 72 percent said that they had customers who delayed or asked to delay a payment.
  

Helping Out the Little Guy

• What would you do if that convenient corner market or neighborhood hardware store near you suddenly closed? Did you ever consciously make a point to use a small business in the hope that your patronage would help keep it open? If so, you're in good company – 68 percent of consumers say that they have made purchases at a small business in an effort to keep it from closing.

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November 2009

NFIB Jobs Statement

Contact: Melissa Sharp 202-314-2068

Expect Coal in Small Business Stockings

WASHINGTON, December 3, 2009 — William C. Dunkelberg, chief economist for the National Federation of Independent Business, the nation’s leading small business organization, issued the following statement on November job numbers based on NFIB’s monthly economic survey that will be released on Tuesday, December 8. The survey was conducted through November 30 and reflects 825 small business owner respondents:

“It now looks unlikely that job creation will cross the ‘0’ line by the end of the year. Small business owners in November reported a decline in average employment per firm of 0.58 workers (seasonally adjusted) during the prior three months, about the same as October’s loss of .52 jobs but down from a loss of 1.26 workers per firm in May. Nine percent of the owners increased employment by an average of 2.3 workers per firm, but 21 percent reduced employment an average of 4.2 workers per firm (seasonally adjusted).

“The job generating machine is still in reverse as November’s report represents the 22nd consecutive month with more small business owners reporting employment declines than employment increases. Sales are not picking up, so survival requires continuous attention to costs – and labor costs loom large.

“Eight percent (seasonally adjusted) of owners reported unfilled job openings, unchanged since August. Over the next three months, 17 percent plan to reduce employment (up one point), and 7 percent plan to create new jobs (down two points), yielding a seasonally adjusted net negative 3 percent of owners planning to create new jobs, two points worse than October. Still more firms are planning to cut jobs than planning to add.

“The largest impediment to new hiring is weak sales. Since January 2008, more owners have reported lower sales (quarter over quarter) in every month, mostly by double digit margins. In November, 15 percent reported gains in sales, but 43 percent reported sales were still declining.

“The consumer is the key to job creation, when businesses have more customers, they will hire more workers. Workers must generate enough sales to pay their salaries, or the firm loses money. Owners won’t pay $30,000 to get a tax credit of, say, $3,000. But little has been done to stimulate the consumer and little is likely to be done, including mitigating the huge uncertainty consumers and owners face from the legislative ‘tax and tax’ agenda.”

News fodder.

Men of a certain age are probably not going to watch Men Of A Certain Age...

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Chris Telfer's "Untapped Millions," in the state budget. Hey, magic money is always good.

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You can't walk up Mt. Bachelor? I thought this was Forest Service land. Seems Unamerican. (Besides, you can't tell me it's that big a problem....)

I mean, god forbid people should get some exercise and save money.

But you know what? I think they've stumbled across the solution to the Bend Area Transit budget shortfall. If we ban all walking and bike riding, they would get all the ridership they need! And car dealerships would love it too!!!

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Hubble space photo's. They could hire a fantasy artist and get pretty much the same view. I mean, the color enhancement is pretty much fantasy...

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The Senator Baucus scandal. Pay back? A warning to other Blue Dog Democrats? I mean, the administration has seemed strangely confident when the numbers seem against them. Does Obama play hardball?

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Yes, sir. Destination resorts are the answer to all our problems. Except for bankrupt Tamarack, in Idaho. Or Moonlight Basin, in Montana. Or the Yellowstone Club. Or....?

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Really, Bulletin. You're starting to get a little out of control with your headlines again. I mean, today Mt. Bachelor not only got your editorial support, but you gave them top of the front page, to with a "Other people do it, too!" argument. As my Mom would say, "If other people were jumping off a cliff, you would too?" When every other news outlet reported that 13 people were indicted in a real estate scam, you headlined "10 locals". I think that's slicing your slant a little finely.

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The article on old surfboards reminds me of the last time I went skiing -- years and years ago, as it happens. But the only skiis I could rent were dinky little things, and I found myself going in circles because I learned to ski on much, much longer skis. Don't actually know if this is still true, or not. Besides, I do like my speed, and longer skiis are better for that.

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I can remember a time when there was a serious discussion whether Oregon and Oregon State should be dropped out of the Pac 10 for not being competitive. It was asserted that it was a downhill slide that couldn't be reversed, and the state schools needed to quit embarrassing themselves.

Hah!!!!!

Double Hah!!!!!!!!!!

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It looks like CACB has survived another week, despite falling 8.79% on Friday. I wonder how the money raising is going....?

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R. Crumb's Book of Genesis is the 1# bestselling graphic novel. And I haven't been able to order it for weeks....If it's unavailable, how can it be #1? Huh?

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Christmas Parade Downtown...sorta. I mean, it goes down Wall St. Not that I'm complaining....

'zine culture.

How many of you know what a 'zine is? Raise your hands? Yes? No?

Here's the Wiki definition:

"A zine (an abbreviation of the word fanzine, or magazine; pronounced "zeen") is most commonly a small circulation publication of original or appropriated texts and images. More broadly, the term encompasses any self-published work of minority interest usually reproduced via photocopier on a variety of colored paper stock.

A popular definition includes that circulation must be 5,000 or less, although in practice the significant majority are produced in editions of less than 100, and profit is not the primary intent of publication."

There is also a phenomenon known as 'mini-comics' which are pretty much the same thing. I've carried mini-comics for years, but Zine's I've always thought should be locally done, and for that locals need to do them. (Zines can be more of a catch-all, news and snark and stories and art all together; whereas I think of mini-comics as being story oriented.)

I've had only two young people over the years walk in the door and ask me if I carry Zines. I showed them my mini-comic selection, which was purchased from the last of the indy comic distributors (since defunct) and I told them I'd be glad to carry them, and even buy copies from them.

If comics are a hard sell, zine's are nearly impossible. And yet -- how can you not support such creativity and ingenuity?

O.K. I'm a 57 year old guy, and pretty staid. And yet I'm aware of zines and what they represent, and I pretty sure there is an active 'zine' culture in Portland revolving around art / comics / coffee.

But here in Bend? Mostly you get blank looks. The first girl who came in with a Zine, I told her she should go check out all the coffee shops around downtown, because I was convinced they would have them. She said no.

Still disbelieving, I called a couple of coffee places and got: "What's a Zine?"

A couple years ago, another young lady started coming in with Zines, and I'd give her a buck or two a piece and stick a buck or two price on them and put them with my mini-comics. Her name is Rachel Lee Carman and she's very creative. What's more, she's kept doing it.

I wondered if a Zine culture would startup in Bend.

So far....not so much.

However, Hayley at Between the Covers read one of Rachel's stories, and thought so much of it that she called the Bulletin; resulting in a story by Dave Jasper which is going to be published any day now. (I wish I'd thought of calling the Bulletin...)

I just finished reading two of Rachel's stories: the first is a 'Free' zine titled, KEEPERS OF THE GEMS, starring four young women who protect the gems "The Source of Creativity...." who decide they need to buy new sweaters for "Comic Book Day" (I like it) and leave the gems under the protection of guardian kittens in the Cave of Secrets.

But kittens being kittens and catnip being catnip and villains being villains the gems go astray....

I'm not very good at conveying the light touch and charm of the story.

The second Zine is called, V-D Zine and it's 'Valentine' to a variety of people, from Ira Glass to Oprah to Sean Hannity(!?) ("Dear Sean Hannity, Wow, it's been only a short time since we first met (a month). Remember when you were debunking global warming? I've really gotten to know since then: finding clips of youtube, googling your name and lingering on your squinty-eyed jaw-clenched mug." (Drawing of said-mug) "Already I've developd passionate feelings for you! Feelings I can only fantasize expressing with a knee to the groin."

With a Zine, anything goes -- the only limit is your imagination.

So I'm calling out all the zine-aphiles, and asking you to bring your stuff in. All you need is a xerox machine and a pen and paper and some inspiration...

Patience is hard.

I'd love to jump on the "recovery" bandwagon, but I just don't see it.

One thing is becoming ever more clear to me -- last year really, really sucked. The more time passes, the more perspective can be gained. When I see how weak business is right now, and realize that we're beating last year nevertheless, it gives me a bit of the willies.

It also is gratifying in a "survived a grizzly bear attack" sort of way. Not only didn't I lose money last year, it was one of my most profitable ever. Because I saw it coming, and I really prepared for it, and for once in my career, I stayed patient and disciplined in my spending.

Profits are great, and all. Profits are the real point. Still, sales took a hit and I don't like that and I'd much rather be making bigger profits from higher sales than in more efficient operations. (Or maybe I'd like to be making even bigger profits from higher sales AND more efficient operations.)

Those bad times were just what we were living, and while dealing with it, there isn't a whole lot of historical comparisons. Or the historical comparisons are meaningless while you are living them.

It's like looking back at an illness, and realizing just how sick you really were.

Anyway, the fever may have broken, but I'm still sweating.

It's possible business could get better; it much more probable that if it does get better it won't be noticeable at first.

Bottom line, there are plenty of dangers out there still to play out. So it seems prudent to me to expect at least one or two of them to happen. Not to mention, I've always felt it would take Bend a couple of extra years, so even if a sustained recovery is underway in the rest of the country, that doesn't mean it's happening here.

So as much as I'd love to jump on the bandwagon, I think I'll hunker down for another six months and then take another reading of the economic landscape. See what happens to the credit card industry, and what happens with commercial real estate.

Pegasus Books is in good shape. But I don't want to jump too far ahead of the real world. It can be hard to live within a constrained budget, but I can always -- always-- order more stuff if I see a real recovery.

November sales results.

This was unexpected.

When I actually did the numbers, we were up in every category; comics, cards, games, toys, books.

Except one. Magic cards.

We were down 75% from last year and from last month. -75%. That is a terrible number, and puts me in a quandary as to what to do with the next wave. Which is coming in the first of February, 2010, but for which orders are due now.

Are the sales to Magic just down overall?

Or is it just a statistical variation fluke?

Or has my competition so thoroughly trounced me?

Thing is, I'm not going to change things. I'm not going to start hosting tournaments, or providing playspace. I made one concession to the new circumstances; I opened many more packs this last time around to sell singles.

But if this is the result, I think I'll go back to the old way of doing things.

It isn't so much that I resent the lower sales, it's that I resent having diverted too much of my budget into a product line that isn't producing.

Since boardgames and books and comics continue to increase, I'd be better off putting my money into them.

The answer will be: I'll go back to the quantity of Magic cards I've been pre-ordering for the last 5 years or so, and let the so called "shortages" happen if they happen. I'm not going to respond the threat of shortages by over-ordering. My gamble didn't pay off.

I'll have boxes and packs for sale as always. But I'm going to stick to retail price which will save me from having to order too much, and sell at too low of margins. Sales may drop even further, but so be it....

Say, wha?

Contrast these two headlines.

1.) From National Real Estate Investor, 11/25/09.
To Buy or Not to Buy— Moody’s Weighs In on Real Estate Outlook.

Nov 25, 2009 10:29 AM, By Denise Kalette

Despite commercial property value declines of 42.9% from peak 2007 levels, the news is about to get even worse for owners, according to Moody’s Investors Service. In the coming months, Moody’s expects values to fall by as much as 55% from the peak before rebounding.

2.) Commercial Vacancy Rates Stabilizing in Bend -- a Positive Sign, some say. Bend Bulletin, 12/2/09.

Compass broker Darren Powderly, an author of the Compass Points report, said the stabilization is a good sign.

“We're not seeing the death spiral of dramatic increases in vacancies and lower rental rates ... (so) I think we're getting close to the bottom, if not the bottom,” Powderly said.


So maybe Bend is different?

If it's different, it's different in a way that isn't in our favor. First of all, the graph shows a flattening over the last two quarters, hardly a sign of longterm stabilizing. At least, I'd be unwilling to call it over because of one quarter.

The good news is that 39 businesses have opened in Downtown Bend since I started my Opening and Closing List; the bad news is 39 businesses have closed in Downtown Bend. Hardly a sign of stability, though it may be a sign of wishful thinking on the part of new business owners. As a general proposition, I suspect that any retail district is healthier with older, established businesses than with all new businesses.

I don't think we're out of the woods in any meaningful way.

Especially Bend. Too many factors working against us.

The first half of next year will tell the story.