Monday, December 31, 2007

Even the USA Today does it. "Existing Home Sales Edge Up .04%."

How could that even be within a margin of error?

Guess what folks, my sales in December were higher than November. Always will be. No matter what. I guarantee it.

The point being, comparing consecutive months is meaningless, but the media continues to do so. It is very misleading to the casual reader who only sees the headline.

The line just below the headline?


I repeat.


Strangely, reading some of the national housing blogs, there are still a number of nitwits who say something along the lines of: "Well, prices couldn't go up forever. This just makes things more affordable."

Which means the optimists have their bases covered. "Prices go up. Quick, buy, before you can't afford it!"

Prices go down. "Quick, buy, houses are affordable. Buy before they go up again!"

But I think, as Paul-doh point out on Bendbubble2, prices are a bit of a red herring. It's whether houses are selling at all, at any price.

This last week at the store sales were pretty crappy. Which surprised me, because up until Christmas day, we were actually ahead of last year. But just a horrible week after. Because we had done so well the week before Christmas, we are going to come in at almost exactly my original estimate, so I'm not too upset.

The cold I had for a week suddenly turned into the Ebola Virus, so I've been at home for several days trying to get over it.

Sunday, December 30, 2007

Arghhh. I did it again. Another long entry that, because I started it late last night ended up on Saturday's date.

Go there.

Saturday, December 29, 2007

This is probably going to sound strange, coming from me, but the mass market isn't all bad. It has created opportunities for a few of us stores who are trying to adjust to new realities.

From Slate online:

Don't Fear Starbucks
Why the franchise actually helps mom and pop coffeehouses.

By Taylor Clark
Posted Friday, Dec. 28, 2007, at 7:35 AM ET

"How could momma and poppa coffee hope to survive? But Hyman didn't misspeak—and neither did the dozens of other coffeehouse owners I've interviewed. Strange as it sounds, the best way to boost sales at your independently owned coffeehouse may just be to have Starbucks move in next-door."

I'm pretty sure much the same thing has happened to the bookstore that Linda and I own, The Bookmark. I don't believe the mass market has hurt us. Indeed, I think our store runs on the fuel that Costgo, Walmart and Barnes and Noble produces.

We don't have to go out and find books, searching for the rare and unusual. (Like we would've 20 or even 10 years ago.) We just wait for them to come to us. Because readers read everything, we need to be open to everything. They bring in loads of Costgo and B & Noble books, and other more unusual books come in along with them.

I see us as taking some of the overflow of these massive operations, collecting them in a congenial atmosphere, at a competitive price (used v.s. new) mixing them with older and more unusual selections.

But I think that we are just another rung in the ladder. We are a reflection of what is selling on the mass market level.

The reason that used bookstores are having such trouble is that they haven't adjusted to the sheer volume of books that are coming down, haven't adjusted the way they trade and sell, haven't been open to the extras or duplicates, and so on. They still think books are a rare item, and are being buried on one side by the Internet, which does the rare and unusual better, and on the other side by the mass market, which does the best sellers better.

But instead of fighting it, make use of it! Take those best-sellers from six months ago, which still have a buzz about them, and put them where people can find them. Take those multiple copies of the new best-seller and cluster them with previous novels by the same author. That kind of thing.

Don't fight it.

But I usually get a really blank look from other used bookstore owners when I talk this way. They are operating from a model that has existed for centuries for hardcover and decades for paperback, but which is now, except for rare exceptions, completely outmoded. They are fighting a losing battle. It hard for them to see past what they've always done. And most people opening bookstores today are simply following the old model, as well.

There are things we do, that I'm so sure work, but I'm going to keep that knowledge to myself. Because, I'm convinced that this is a new way. I'm normally very open, but what makes this system work is both in the overall concept, but especially, the difference is in the details.

Linda and I had a unique amount of parallel retail experience to bring to first time used bookstore owners. We spent a lot of time examining and thinking about it in advance. And we got lucky in that the model we came up with fit very well with the new realities, with a few quick adjustments.

But it really makes me wonder how many other businesses need exactly the same kind of rethinking, including mine. I haven't come up with anything dramatic in my business, maybe because I'm constantly tinkering already. But I've been known to make big changes that turn out to be the same kind of changes that other stores end up making.

I have some ideas about how I would do a new bookstore, too. Because I think they need a complete re-examination.

Problem is, the very image of bookstores might also be the root of their problems. Bookstores have an image that is very, very attractive. Most people opening bookstores want to do them pretty much like the bookstores they like, or the one they have always imagined. When, in fact, the model might just be out of date.

If or when I get serious about doing a new bookstore type model, I would put it through the same process I put the used bookstore through. Because doing it the same old way; or conversely, trying too hard to compete head on with the new ways (eBay, Amazon, etc.) or against Barnes and Noble and Borders, I think is a doomed effort for all but a few exceptional stores.

I have too much energy, sometimes. I want to try new things in business. I want to experiment. It must drive my wife crazy. I don't think I'm overly ambitious, I don't think I'm a workaholic. I just like to see if my ideas work. Most of the time, I come to my senses and just explore the ideas without jumping off the cliff.

But, if there was no risk, and I didn't have to work 80 hours a week, and there was no stress, it would be fun to try. Of course, everyone else would too.

ONE STRONG CAVEAT: It very possible I'm mistaking our success with luck and opportunity. Certainly, the location was super important, and the fact that another used bookstore was just leaving. I've mistaken circumstance for skill before......
One of the cool things about a blog is that I can check my predictions against what really happens. My estimates and guesses are down in black and white, with a date. For instance, my new bugaboo is that Bend is tremendously over-retailed, and that we have an enormous commercial bubble.

No one else around here seems to be talking about it. It seems totally obvious to me, just comparing population statistics and how many stores have been built.

But I have no way of proving it. It's not really my job, you know. My job is selling books.

So I'll just lay that prediction out there, and figure that sometime in the next year it will either become obvious to everyone else, in which case I'll pop up with a copy of this entry and say, "told you so!" Or a big news article will come out saying we have, oh, twice as much retail footage as average, or something.

I'll let you guys catch me all the times I'm wrong.

No, not really. If I'm obviously wrong, I intend to admit it.

The lead article in the business section of the Bulletin today is:

"HOW GOOD A DEAL COULD YOU FIND ON BLACK FRIDAY? Probably nothing special, one analysis finds."

Which is what I said last year around this time, and I think I said it this year around Thanksgiving. I can't find the entries, offhand, so they may have been in the comments section...

Still, just looking at the ads through the season and you can see that, if anything, prices are actually cheaper the week before Christmas and the week after Christmas than they are on Black Friday, and if you keep your eye open for deals, even cheaper by spring.

Just saying.

Friday, December 28, 2007

Luck is not a business strategy.

Remember growing up, and being told that if you studied hard and worked hard, you could 'do anything?' Remember your mother telling you, 'nothing is for free' and 'you get what you pay for?' Common sense things like that?

All my reading about gambling (I have been working on a book set in Las Vegas for several years now) make it very clear that no gambler stays ahead forever. They always end up losing what they won. If you came across them when they're on a winning streak and flush with funds, well, that life would look pretty attractive. But the same behavior that brought them money -- risky behavior -- will almost always mean they'll lose it in the end.

To me, buying homes for any other purpose than to live in them, is speculation. (I suppose buying them for investment/rental purposes could also be a business decision, using historical standards.)

Here's the thing I always tell myself. You can make money by working hard, being in a profession that pays well, by saving diligently and investing wisely, by inventing a better mousetrap.

But no matter how you try to make money, you should never forget the risk/reward ratio. The higher the possible payoff --- the higher the risk of failure.

So to take the above examples: working hard? The risk is burnout, losing a fresh perspective, making mistakes. Being in a profession that pays well? The risk is an expensive and time-consuming education. Saving diligently and investing wisely? The millionaire next door route, that might pretty much take your entire work life to get there, if nothing goes wrong.

Inventing a better mousetrap? Most people are incapable of thinking for themselves, much less inventing a better mousetrap. Almost every single person I've seen go into business follows the same exact path as everyone else in that industry; so the only thing they have to distinguish their efforts is, work or luck (getting a great employee, finding a hot product, snagging a good location.) (I hate to bring it up, but there is another route -- cheating and scheming and screwing the other guy, but for most of us, I'd like to believe, the personal and spiritual cost is too high.)

I think it's only once in a blue moon a person comes along with a truly radical and innovative idea, and then everyone else piles on and a whole new thing is created.

I get asked all the time: "WHY DON'T YOU........."

And the answer is, I can't escape the risk/reward ratio. Everything has a cost, in labor, or money, or space, or time, or energy, and so on. Nothing is free.

What brought all this to mind, is the article in the Bulletin about the home owners from California who's property management company did a Houdini. Well, there you go, the risk of being an absentee owner, of owning more than one home. You just always have to take that risk into account.

Thursday, December 27, 2007

This is starting to feel like a good old-fashioned Bend winter. Like the kind of winters I remember growing up in Bend; not like these weird dry winters we've had for the last decade or so.

Anyway, I'm good with that.

Except driving home tonight, I realized I'm at the mercy of maniacs in S.U.V.'s. The bigger the pickup or SUV, the bigger the maniac.

Do you know that if I have to make a sudden stop in my little Toyota, I'll probably stop sooner and avoid danger better than your big four wheel drive goliath?

You know, tailgating is a bad idea at any time, but in this kind of weather you're asking for trouble, and you might just drag me into it.

Look, going 5 or 10 miles over the speed limit makes sense when the sun is out, but going the speed limit or even slightly below makes much more sense when the roads are icey.

The weird part is that in Downtown or on Greenwood, where the cars are packed together, where someone could pull out in front of you at any time, people are driving as if there isn't any snow. But then they get out on the highway, which are mostly bare, with two lanes, with much less likelihood that someone will pull out in front of you without an escape, and here they go slow, 10 or 20 miles below the speed limit.

I don't think they have a clue.

Don't accelerate too fast, slow down too fast, make sudden jerky movements, do everything at a nice, steady pace and we'll all be safe. Meanwhile, I'm going to be leaving 10 feet minimum when I come to a stop as I watch you barrel down on top of me in case you can't stop.

Biggest thing to know, damn you, is a big car and four wheels WON'T KEEP YOU FROM SLIDING! You're HEAVY and MOMENTUM will make it hard to stop! Just frakken take it easy so my little Toyota and I don't get crushed!

Two items caught me in today's Bulletin. (I'm not sure this blog could exist without the Bulletin blogfodder.)

The first, of course, was that Erickson's Thriftway is closing after half a century.

Probably a good time to mention....and oh, by the way.... the mass market is winning, has won, is a giant anaconda squeezing the life out small town business.

But wait, you might say, aren't you an example of a survivor?

I direct you to the first five words in the title of my blog. Go on, read them...

The second thing that caught my attention was the two women buying 800.00 worth of clothing at the Old Mill. (Banana Republic). This is above my daily sales average, folks. We are small potatoes. We are a mouse skittering between the cracks, hoping the snake will go after the rabbit, instead.

What I find amusing is that Walmart spends most of the article about Erickson's denying they have anything to do with it.

Yeah, and Blockbuster had nothing to do with almost all the indy video stores disappearing.

Yeah, and Barnes and Noble had nothing to do with 3 out of 4 existing indy bookstores closing.

Yeah, and Best Buy had nothing to do with Boomtown closing.

This is where the mass market defenders jump up and say, yeah, but what about the internet, what about Netflix, what about downlowding, what about Amazon? Major factors, I don't deny. But without the Mass Market, they still would have had a chance.

My wife and I skipped Christmas this year, for the first time. We make these kinds of vows every year, but then I catch her buying something anyway and I go out and get something and she goes out and gets something.

We got a single, not overly expensive item for each of our family members here in town. That was it.

I, personally, just don't need anything, and if I need anything, I'll go buy it.

Anyway, back to Ericksons.

There is a kind of feeling floating around that those of us who are anti-Walmart, anti-big-corporate store come to town and crush the competition, have a do-gooder political agenda that defies the facts.

I submit to you that it is the opposite. The Walmart defenders are denying the facts. The facts are, mega-stores crush the competition.

There are hard-working locals losing their jobs, why do you deny it? Sure Walmart may have created 30 jobs to take the place of the 30 lost jobs at Ericksons. But the money at the top is going to Arkansas, folks. And the two owners of the Gibbs Bakery are also self-employed. So the grandfather and grandmother Gibbs lose their bakery -- so what, I can get my cottage cheese .50 cheaper at Walmart?

Almost everyone's doing it. No, has done it. Because I really believe the battle is over, it's just mopping up operations.

Like I said, Walmart spends almost the entire article denying it is their fault, but I'll let the people at Erickson's have the last word:

Manager Adam White...."saw the writing on the wall when the 217,896 square-foot Wal-Mart Supercenter opened Sept. 19 and his sales started to slip.

"It's taken enough that we're not going broke,but we're not making any money," White said. (Italics, mine.) "It's amazing what Walmart does to a town."

Wednesday, December 26, 2007

My cat Panga has let me know, in no uncertain terms, that either my new sweater goes or she does. She stared at me with her eyes showing white, and sniffed as if I was a bomb. Then she ran away and hid under the futon.

It's a nice sweater too. I'm going to miss it.
I'm pretty much pulling the following thoughts out of my head. I mean, I have no proof I'm right. It's only instinct. But it's the same instinct I use to plan my store. It's the same instinct that told me two years ago that my five major competitors would probably be gone within two years, that made me think when Best Buy opened that only one record store would still be around. That the Mountain View Mall was toast. And so on. I feel like my instincts are pretty good.

So here goes.

First lets try to establish how much retail there is. Now, I wish a Bulletin reporter would go out and establish that. How much retail sq. ft. was there in 1990 and how much retail footage is there in 2008? Should be possible to find out. I'm more than willing to admit I'm wrong if shown reliable figures.

But, since I don't know, I'll use a little thought experiment.

Think of all these retail stores as cardboard boxes. In 1990 there was a big box over the Mt.View Mall, a big box over the Bend River Mall, and a big box over downtown. There were the strip malls on 3rd St. and a smattering of retail on Greenwood, Division, and Franklin. A tiny bit of retail on the east, west, north and south.

So, lets say, one big long thin box over 3rd St., and all the four corners add up to one more box.

Compare that to today. All the strip malls are still here. Downtown Bend is fuller and expanded, but lets say it's equal. The Bend River Mall footage hasn't decreased. The Mountain View Mall has been replaced by Cascade Village, which is at least as big.

Then start adding up the new. Factory outlet mall, Fred Meyer Center, Forum, Target, Walmart, Shopko, Lowes, Home Depot, Albertson mall, and on and on. Northwest Crossing, the west side, the east side across from the Forum and on and on. And smaller retail in every nook and cranny. Piles and piles of boxes.

My count of boxes is at least five times bigger, (very conservative) and I'll be willing to bet, 10 times bigger. Maybe more. (As crazy as it sounds, I wouldn't be surprised by 20 times bigger.) I think once the size grows out of proportion, there is no real limit. There was only so much gold in the minefields of Alaska and California, but that didn't keep people from coming and coming.

Meanwhile, the population, to error on the side of caution, is maybe 2 and a half times bigger.

To me, it just doesn't compute.

And the kicker, to me, is that neither mall was healthy at the time, 1990, as has been proven out over the intervening years, and neither -- believe it or not -- was downtown Bend. The strip malls on 3rd St. were already looking run down.

Nothing explains this to me. I'll concede that everyone in Bend in 1990 was broke, there being no real industry. (unlike today....oh, wait.....)So maybe, the retail market was under performing by, say, half. But the size of the population vs the commercial footage is still extraordinary. Nothing fully explains this to me. Tourism, demographics (richer folk), nothing.....

I think that there is at least -- at least -- twice as much retail in Bend as is healthy. I'm going to make up some stats for experiment sake. Let's say in a normal town that half of all stores are healthy; paying bills, fixing up the place, maybe even expanding. A quarter of all stores are functional. They can do the bare minimums, but if a better opportunity comes along, they'll take it. If their lease goes up, they're more likely to quit. And a quarter of the stores are just hanging on, or slowly bleeding, and hoping that things will turn around. Any shock at all, and they're gone. A certain number will close on a regular basis.

In Bend, my feeling is that -- especially without the housing boom of the last five years -- only a quarter of the existing stores are healthy, either because they've done a good job, or they are well established, or they lucked out and stake a part of the business world where the competition isn't crazy. That leaves a quarter of the stores to be functional. And that leaves fully half of all stores are shaky. (Or in the case of Bend, too new to know they're in trouble.)

O.K. Let's throw the housing bust into the mix. We've got all those mortgage, bankers, real estate, builders, housing supply, paint stores, home decor stores, plumbers, electricians, construction, and on an on, to work through.

That's bad enough. Everyone in Bend just got a cold, or if it is as dire as some think, maybe even pneumonia. Some have strong immune systems and will shake it right off, others will suffer but stay will rest and drink plenty of fluids, and they'll be fine. Other will start to get a chronic cough, but survive. Others will be weakened beyond repair. Some opportunistic disease will kill them (embezzling employee, a break-in, a fire or flood, a health issue, etc.)

Here's the other kicker. Any kind of shock, and we'll see just how weak everyone is. A recession, a terrorist strike (imagine 9/11 happening on 12/11 instead), any major world event.

A couple of years ago, I thought there was a 5% chance that Bend would have an 80's style recession. I mean, you have to have been there. It was a disaster. Think Burns.

Everyone else came out of the recession in time to reelect Reagan in 1984; I remember thinking we weren't out of it until late 1988 or 1089, so a full four to five years after anyone else.

I'm raising my estimate of that kind of disaster to 20%. Still an 80% chance that it won't happen. After all, I've had 27 years of Christmases in a row where the unthinkable hasn't happened, so it's a black swan event. Unusual and unlikely.

I think the odds of having enough of a crunch to notice, though, has gone up to 80% or more. It will depend on national events, among other factors.

But what concerns me now isn't the housing bust. I think that is going to happen. No, HAS HAPPENED. But the possible ramifications of a commercial bust, too. In both cases, Bend is an extreme example of a national trend. I wonder though, even though we were considered the 'most overpriced' housing market in America by CNN/Money if we aren't even worse when it comes to retail.

I'd be willing to bet if we aren't the most over-retailed area in America, we're right near the top. And this is something that isn't being talked about.

I also think that we've got at least through 2008 and 2009 to get through, and probably a couple of years after that, for the housing bust to wear off. Which would be a pretty normal time line, so I think maybe even further for Bend.

And the commercial bubble is still building up steam! Tons of commercial is coming on line, tons are in the works. So that may extend the damage out even further.

And if there is an unexpected shock, it will happen faster and worse.

I'm certain that a large percent of the retailers and professionals think I'm exaggerating. I'm totally certain that the real estate people probably think I'm a whack job. Thing about instincts, you remember the times you were right, and not the times you're wrong. And I am leaving that 20% possibility that we'll somehow blithely tip toe through the tulips. (mania.)

The thing I'll most be looking for is the psychology. As long as most people don't believe such a scenario, I'll have time to prepare. People muddle through, there's that 20% that psychology will simply overwhelm the reality. So every one of you that thinks I'm overstating the case....thank you. I'm really, really hoping you're right and I'm wrong. Keep thinking that. I'll be forever mystified by it, but I'm mystified by much of what I see. (Alvin and Chipmunks makes 45 mill., the Golden Compass 19 mill. Mystifying! People actually watch IDOL! Mystifying. People actually thought the DA VINCI CODE was a good book! Mystifying!)

But if the psychology changes. Oh, oh. Watch out.
In the reports on Christmas sales, it was mentioned several times that certain big box stores had stronger sales than others of the same kind, and the stores that had stronger sales also had bigger discounts.

Walmart, good sales. Target, bad.

Barnes and Nobles, good sales. Borders, bad.

Best Buy, good sales. Circuit City, bad.

So using those three comparable types of stores, I'll be very, very interested to see what kinds of fourth quarter profits they each had. Keep an eye. And remember, even if The Good Sale stores do turn more profit, they took more risk, and cycled through more product (thus stressing their employees, and systems) with all the hidden costs.

Sometimes, you're better off selling less, for more.

Despite the ninnys on the stock market, I don't believe it's cut and dried. The reaction, before knowing the profits, is just game playing.

I'm going to keep my eye out.

Meanwhile, it looks as though Kid's World at the Forum is going out. Just as umpteen new kid's stores on coming into town. So here you have an established store saying there wasn't enough business to stay, and at least half a dozen new stores saying they can make it work.

So I ask you. Knowing nothing else about the strengths and weaknesses.

Which is the more reliable indicator?

Tuesday, December 25, 2007

Merry Christmas!

Thanks for the books, Ariel and Jason (they look good), and the brewski Paul, and the cookies Matt!

We are ahead of last year in sales this month! I truly am surprised.

Had a bunch of sport card boxes walk off on their own legs yesterday; 600.00 worth I could see, and probably more. This happened a couple of years ago, and I was taping them together. But we'd had no problems for all this time, so I quit taping. So....back to trying to protect them. Since our margins really suck on cards, this pretty much represents the profits for the entire season on cards. (Merry Christmas, motherfuckering methheads.)

I have a miserable cold, and normally would skip the family dinner, but apparently my niece Matty from Chicago came home sick, too. I'll just try to keep my distance.

My jaw is aching all the time. I even went to the dentist, thinking I had a cavity. But it's just the clenching. I never catch myself doing it. Tried to self fix myself yesterday, stuck a toothpick under my tongue, which really worked to relax my jaw. Except it's kind of hard to talk, to eat, to sleep that way....

It's happening during the day, apparently, because I wake up O.K. I never catch myself doing it. I've asked friends and family, and they don't catch me doing it.

But yesterday, I had taken the toothpick out to say something to Linda in the car, and I caught myself! So, yep. I just really clamp down, for some reason. I never can figure how the stress in my daily life and the symptoms match. Often, when you'd think I'd be stressed out of my mind, nothing happens. Other times, like right now, things are going really well, and my subconscious apparently decides it's time to wreck my teeth.

So if you see me with a toothpick in my mouth, I'm trying to self medicate.

Only thing I gave myself this year from the store is a Charles Stross S.F. series that was recommended by John of Chugnutt. Oh, yeah, and the now traditional Olivia Pin-up calendar.

Hope you all have a relaxing and fulfilling holiday.

Monday, December 24, 2007

From today's USA TODAY:

".....Retailers who failed to discount — such as Macy's, Circuit City and Borders — were the season's worst performers, the survey found.

"Penney's was super-aggressive. They were advertising 40% to 50%, 60% off all season and Macy's didn't do it," Britt said....."

Actually, I don't think analysts know much of anything, nor do the stores really know how it's going to come out. It's all fun with numbers. They could've had huge sales number, but given away the store.

At what cost profit?

Bah, a pox on all their houses.

What I sold this Christmas, I sold because someone wanted it enough and valued it enough to pay retail. And it's looking like enough customers like a downtown full of individual shops and a shop full of individual items for us to have had a good Christmas.

The rest can go to Walmart for all I care....I'll never win them over. Anyone who will walk away from a new book, that they want, for 10.00, and fight the Christmas traffic to save a couple of bucks, is beyond my ken.

"...Barnes & Noble's discount program — which offers members who pay a $25 fee as much as 40% off on hardcover best-selling books — managed to entice enough shoppers to effectively drive "a dagger through the heart" of rival bookseller Borders, Beemer said.

Borders counters with Borders Bucks, which gives members a $5 coupon every time they spend $150.

Shoppers "went out and bought every deal they could," Beemer said. "When there were no deals, there weren't many buyers...."

And then later in the same article, this:

"...Still, overall holiday sales gains could come at a cost for retailers, says Sherif Mityas, partner and central region leader at consultancy A.T. Kearney, noting that stores discounted heavily at the expense of margins. He believes that apparel merchants will see their fourth-quarter profits most hurt..."

Sunday, December 23, 2007

Wasn't able to get on the Untrained Profession with OCD blog tonight, without a password, so I'm going to assume that she was just getting too much flak locally from the Baker City folk.

That's too bad. She wasn't really saying anything out of line.

But I'm sympathetic. I think I've hurt a few people feelings here, which isn't my intent. But I don't know how you can write a local blog under your own name without saying the occasional out of line thing. I mean, there is a line I'm trying to walk here, saying what I think without getting offensive, but I know that I'll tip too far one direction or another.

I figure, hey, I'm just a opinionated slob, and what do the hell do I know? The only difference is, I'm not anonymous.

I've also decided to ask people to realize that even though I write about my job, this is not an official mouthpiece for Pegasus. I always used to tell my wife, that I have to go make sacrifice to the great god Pegasus. And I really do think of it as a separate entity.

Do you buy that?

Anyway, for anyone I've insulted, just remember I probably make more of a fool of myself than I'm making of you. Take what I say for what it worth, why don't ya?

Read another book on poker, POKER NATION, by Andy Bellin, as a break from my Dark Tower readings. (I just finished the fifth book, and it was jarring when Stephen King inserted himself into the proceedings. I have a feeling he's about to go all meta on me, which just pulls me straight out of the 'fictional dream.')

Anyway, it confirms I don't want to play poker, even as it fascinates me. I wonder if I have the skills, but there are too many pitfalls. Golf is another game that interests me for no reason whatsoever. I've never played, nor will I ever play. My Dad is glued to the Golf Channel, which even though he was a doctor, I don't remember him ever playing.

I probably raced in several dozen ski races over the years, and got pretty good, but even when I was active the sport bored me on T.V. Even then it was full of yahoos. The one team sport I played but was lousy at (too small, but also just not good at it) was the sport I watched and still watch. Football.

Anyway, back to golf and poker.

Maybe it's the strategy and the personalities. Tiger Woods helps; and so do all the colorful folk at the WS of Poker.

I don't know why I read so many books about subjects that will never enter my life. Just curious, I guess.
As of now, we are even in sales with last year, at this point in the month. Which is a big surprise. If you had asked me at the beginning of the month, or even halfway through the month, I would've said, no way. I'm even beginning to relax a bit. Christmas wasn't canceled, nothing disastrous happened, all is well.

There's still a week to go in the year, but I can already tell that I'm going to end almost exactly where I started the year in terms of profits and debt. Maybe a bit more going toward home mortgage, and a little less toward inventory.

Which is also a surprise, because it seems to me that I had completely different tactics and strategies this year. So to end up in the same place makes me wonder if it's all just preordained somehow and all my planning is for naught.

It's very gratifying, too, that we ended the year with two up months. After years of growth, we had three months in a row that were down, Year over Year. (Aug. Sept. Oct.) So I had resigned myself to perhaps a few years of declines. I'd already cut back on my spending, but I'd hoped for the money I was saving to be profits, and instead it looked as though they would go toward just breaking even.

I'm even wondering, now, if those three down months were due to all the bad news in the economy, but that news hasn't relented and we've rebounded. It is nice that we've rebounded despite not overspending. It's nice that I stuck to regular margins, unlike what I'm hearing about most retail stores, and still managed decent sales.

I'm sure I'm a sore disappointment to the Bubble Busters, Paul-doh and Bilbo and all, but that was inevitable. Despite all my tough talk, I'm mostly an optimist. I always think it's going to get better. I see dangers everywhere, maybe, but I also always think I'll figure a way around them. I'm also just pretty much an observer, and not terribly interested in getting engaged outside my own business.

I have found, over the years, that cheering for a decline is just self-destructive. Good guys and bad guys alike get hurt. For example, if there was a slowdown that didn't affect me directly, but instead affected my favorite distributer, then it will end up affecting me indirectly.

Yes, I do believe Bend is way, way over-retailed, but I'm hoping we can weather the storm. I won't stop pointing out that the square footage of office space and retail space and that weasel word 'flex' space is completely crazy. I just don't see how it can end well. But if it does collapse, I'll just try to survive again. Survival will be success.

The Housing Bubble is over. Stick a fork in it. But I see a commercial bubble that is just as big in Bend, if not bigger, and it may be even more destructive to the local economy. And it hasn't even peaked yet, they're still announcing huge projects, so it's going to play out for the next few years.

We tried a few extra hours this Christmas, nothing too over the top, and they seemed to work. I haven't tried them in years past, because there was no point. But this year, (and probably last year if I had thought of it) seemed more like a mall with all the people walking around.

I have to admit that I was somewhat impressed by the Downtowner's ad campaign in the Bulletin. I liked the consistency, the look, and the frequency of the ads.

The Downtowner's would have had some right to tell the Bulletin to take a hike, after the glowing article they did on the wonderful downtown shopping IN PORTLAND. I mean, almost all the things they said about it could just as easily be said about downtown Bend. I do believe the Bulletin has an inferiority complex sometimes.

I'll be really interested to see how everyone else did. Though the truth may not come out for a couple of months. That motels are seeing only 60 to 70% occupancy rates really surprised me, because I hadn't been paying attention and because it wasn't much more than ten years ago when every motel and hotel would be full this time of year. A concrete example of overbuilding?

When I was leafing through Cascade Business News, I was just adding the square footage of every building on every page, and it went beyond any rational scope. Hell, ten years ago two malls were going out of business because they weren't fully occupied. Now, we've probably increased the square footage by 10 times as much, and added the extra burden of higher rents. Yes, there are more people, but the dollar can be split only so many ways.

The westside, to me, is the most out of control. There is the neighborhood concept, but I think Bend is just too damn small, even now, for that to work. Portland has neighborhoods, and they also have freeways and rivers and history separating them. Why would a Bend store limit it's appeal to an already too small population?

I'm home with a cold today. So way too much time to blather. Fortunately I was at the store for the first half of the day. Our Visa machine went belly-up, stopped printing, on a Sunday, two day's before Christmas. Murphy letting me know he's thinking about me.

I've kept my old over-the-phone account, but had planned on dropping it. Now, I'm glad I didn't. I'm just using that old-fashioned hand machine, which seemed to completely confuse Patrick. What is this generation going to do if a computer virus destroys all electronics, roll over and die?
For a retailer, this time of year can necessarily become a bit of a horse race. Merry Christmas and all that, but how are you doin'? Even the customers sometimes seem to get caught up in it.

"Coming around the turn, Pegasus07 is ahead by a nose! Here comes a surge by Pegasus06, he's pulled ahead by a length. Pegasus05 is being left in the dust!"

I looked at the 22nd of December from last year, and thought, no way.

But we came within a few hundred, so it's at least conceivable that we could beat last year. Not likely, but possible. Even coming close is a bit of a moral victory, because I spent so much less on new inventory this year.

Not that I don't have inventory. I'm always amazed when the cash register says I sold thousands of dollars worth of stuff, and I look around the store and it still seems full.

I used to stock up for summer and Christmas, let the inventory slide in the slow months. Besides creating a self-fulfilling dynamic, I finally decided that for a long tail store, it made no sense. The minimal tax savings I might make by having less inventory in January, for instance, was probably more than wiped out by not making sales.

So I strive for a fully stocked store, all year. With exceptions, of course. I brought in way more board games, for instance, than I normally carry. And I'm a bit more willing to take a chance on product, if the bill comes due in December.

The last couple of years have been an awkward schedule for Christmas with the kids getting out only a few days before, instead of a whole week. I get a bonus 3 or 4 days of tourists in January, but obviously, it would've been better to get them for an extra 3 or 4 days running up to Christmas.

I've already looked at next year, and Christmas falls on a Thursday, so the awkwardness is starting to fade.

We're open Today and Christmas Eve, regular 11:00 to 6:00 hours, so if you need a last minute gift....

Saturday, December 22, 2007

Still walking the line at the store.

Sales are so outsized this time of year, and because sales are almost as big for us on the week after Christmas, I won't know until Jan. 1, how I really did. Two or three really big days, or two or three really low days, could mean the difference between a good Xmas and a bad Xmas.

My second Christmas taught me a valuable lesson. I'd done very well my first Christmas, so I cheerfully stocked up for my second Christmas. It came, and average month. As if someone had thrown a big, wet woolen blanket over the season. This was 1985, in the depths of Bend's mini-depression.

What I hadn't realized was, I was rewarded that first Christmas by my regulars, but by my second Christmas I was already old news. It was probably my worst moment, (competing with that one summer where it seemed like every sport card customer was yelling at me for overcharging, at the same time I was bleeding red...)

There are also the random really horrible weeks, as if negative ions float through the air. (Which are compensated by the random really great weeks.)

Got my week after Christmas invoice, and as usual there are a bunch of things I REALLY could've used the week before Xmas. Such as a Nightmare Before Christmas boxed set (hallo!!! Christmas?). Got my reorder of League of Extraordinary Gentlemen, and I am getting a case of Big Lebowski toys!.

I think I guesstimated pretty well on the boardgames. I even had someone come in who had been sent by Barnes and Noble (thankee!) to pick up a Settlers of Catan because they sold out. Unfortunately, they probably won't make the same mistake next year.

I swore I wouldn't do any more additions to inventory, but I'm thinking about creating a shelf of mainstream games, not everything, (I must have been asked for a couple of dozen random games this Christmas), but a good sampling. Maybe I can just do it so slowly, it won't impact on my normal budget...

I wonder how long we're going to go without a game store in town. I don't want to stock up, and then get blindsided. Unless I intend to do a full service game store myself...

Friday, December 21, 2007

I've quit listening to the radio, pretty much. Even in the car. For years now. Except for NPR, at the store, occasionally.

It has occurred to me that I do this every decade or so. Right at the end of the sixties, after the Beatles and Led Zeppelin, nothing interested me until Elvis Costello and the Clash. Then after that faded, nothing interested me until....Nirvana.

I was reminded of that because of the MTV Best Videos of the Nineties show, (hey, it's the holidays, all repeats.) Most of the songs, the boy bands, the girl bands, the others left me kind of cold -- though, I must admit, Baby, Hit Me One More Time sounds and looks better to me now than it did at the time. I mean, catchy pop tunes and all that.

But then they got to the final songs: Close to the top, Losing My Religion, by REM, a great song. Then, coming in at number 2, the song One, by U2, which reminded me how great the album Achtung Baby was. And then, drum roll, number one song:

Smells Like Teen Spirit, which literally sent shivers down my spine by how good it is. 17 years later, and it is still chilling how good that song is.

Now, I was in my forties when these three songs came out, and yet, I remember watching the Teen Spirit video the first time and my mouth dropping open and thinking music was saved....for a few more years.

So....I think I'm just waiting for the next great song, the next great band. There are some great artists still, Neil Young, for instance, and I've gone through a phase of listening to a lot of old time country music, and alt rock and alt country. I can like and appreciate Arcade Fire, and have a fondness for Dixie Chicks, but ... the next great song just hasn't hit for me. I'm beginning to hope that even in my fifties and sixties, I'll at least recognize greatness...I hope.

And it will be safe to listen to the radio again.

Unless rap music is it, which means I've totally lost it.
The Edward Gorey incidents.

Twice this year I've had customers specifically asking for Edward Gorey books. "Why yes," I say, proudly, since I've always been partial to Gorey illustrations. "We've got a bunch of them."

"You don't have the one I want."

O.K. One Edward Gorey book is pretty much like the next. Really.

They look some more, and then the inevitable, "Is this all you got?"

"Well, we've tried to carry what's available," I say.

What I really want to say is, "Oh, you're looking for the Edward Gorey Store!"

After this last lady left, I counted my books. I had nine books, down from twelve.

So here's a challenge. Find a bookstore. ANYWHERE in America, Barnes and Nobles, even Powells, and tell me they have 12 or even 9 Edward Gorey books in stock.

I'm serious. This is cutting things mighty fine.
I'm just you guys know how hard it is to run a successful comic store? I've now had a used bookstore for 5 years, and I can tell you on a scale of one to ten, it has been a two in difficulty. Comics, after 25 years, are still a nine.

I've now experimented enough with other product lines, and have those 25 years experience to apply, and I'm convinced that I could start a toy or a game or -- despite all the gnashing of teeth of independent bookstores -- a new bookstore that would equal my sales in comics within a couple of years or so, and be easier to do at that.

I have a fully functional store, and comics are more than half the mix, and there is no reason to go away from that. I'm able to experiment in new books and boardgames, for instance, without putting my store at risk.

But I'm limited in space.

Move? I've been praying for the kind of foot traffic I'm now getting for most of my career. A booming, hot downtown, which has morphed around me to the point where -- instead of being on the edges, I'm smack dab in the middle.

But I feel like I'm in a straightjacket, with no wiggle room. I can do small changes, take this out, move this over, but mostly I've done that.

This may sound arrogant, especially the game guys, but I'd love to be able to apply 25 years of experience to a more meaty part of the population instead of the expending it all on 1%.

Or maybe I just like throwing my work life into turmoil ever few years.

I would love to try all my ideas on a new space, but I'm wondering if I should risk what I've got.
Foreclosures up? No worries.

Unemployment up? No worries.

Christmas sales down? No worries.

Thetherow wants an extension. No...wait. We worry.

Let me get this straight, they want an extension of the original seven years because the plan wasn't complete? (Well, after 2001 they had a hard time getting financing, but forget they said that.)

"We want to add a toilet to unit 42B, so give us another seven years...."

Still, it does seem like they tried to buy off the city and county with the 12 million dollars upfront, and a deal is a deal.

They bought us, fair and square. Right?

No worries.

Thursday, December 20, 2007

Speaking of googling one's own name, whenever I google mine, up pops a myriad of sites peddling the three books I wrote 30 years ago. SNOWCASTLES seems to be all over the place, ICETOWERS is much less frequent (which might be frustrating, since it is the sequel to SNOWCASTLES) and STAR AXE, the first book, seems to be in a plethora of places, also.

My sister Susan, who is geophysicist and was traveling all over the world at the time, found my books in places like England, New Zealand, and the outermost island of the Aleutian Islands.

The English editions of SNOWCASTLES, published by a different publisher apparently, seem to be ubiquitous. Interesting, I only ever received the advances on these books and I've always wondered if royalties from England were exempt. Not that I think it probably sold will enough to get royalties....

Comments and reviews are pretty disparaging, which used to bother me but doesn't seem to anymore. Sword and Sorcery isn't the most esteemed of genres, even among nerds. Besides, I feel as though I got to be a much better writer later on, but by the time I wrote my sixth and seventh novels, the publishers didn't seem much interested in what I was writing, and I couldn't see my way to not writing the novels the way I wanted.

Besides, by then the glamour of writing had worn off. The marketing aspects of the business became too much. And when I bought Pegasus, my creative energy was just out and out diverted.

But I'm beginning to realize that these books are going to be floating around maybe a hundred years from now, little tidbits of cultural flotsam. They have a couple of nice covers by an artist named Romas, and a not so nice cover to the third book by a more famous artist named Carl Lundgren. (I think they were gearing up for a real push on ICETOWERS. They sent me samples of an embossed cover, hired a name artist. But by the time the book was published, they apparently backed off.)

It doesn't even matter if they are good or bad, just that they were published, that they exist. Without the internet, they would probably be lost. But the internet has probably stirred up all kinds of dusty backrooms of used bookstores and given new life to out-of-print titles.
Read Cascade Business News last night, and it blew my mind. Then I read Cascade Discovery, and my brain shut down.

Do they hand out bottles of bleach blond hair dye and teeth whiteners when you get your real estate license?

I think Cascade Discovery supposed to be the 'spiritual' side of the Cascade empire.

Real spiritual and deep.

So what article does Pamela Hulse Andrews (publisher) write? "SHOPPING -- A SPORT. ADDICTIVE. AN OBSESSION. UNDENIABLY APPEALING.

Perfect pitch. Written on a first grade level.

You know, I've been in business for 27 years in downtown Bend. My wife is in her fifth year of running the Bookmark. And I don't believe either of our enterprises have ever even been mentioned in those publications. Of course, I've never advertised in them, either. I'm sure that's just a coincidence.

I've always said I like the Bulletin, and I like the Source. I think it's safe to say that their advertising and their editorial decisions aren't joined at the hip. I believe that they really are about the news and entertainment.

Cascade Business News seems more like a self-glorified nickel ads rag. But I don't suppose that Cascade Business News makes any pretense of being the 'Newspaper of Record.'

But what they do document is the mentality of the real estate, promoters and developers, and such. Their little wine parties where they pat themselves on the back for erecting uninspiring monstrosities of buildings, and peddle loopy business ideas.

I feel like I'm back at high school. I'm the Jeanne Garofolo character making snide remarks from the sideline.

Wednesday, December 19, 2007

"Ready when you are, C.B.!"

Customers have been asking if I'm having a prosperous Christmas. Strange as it sounds, I still don't know. As of yesterday, there was just a hair's breadth of difference between this year, last year, and the year before. Thing is, last year was a full 4000.00 better than the year before at the end. So, it all hangs in the balance, still.

As hard as this is for me, I can't imagine what it must be like for the manager of a local Gap store, or a Fred Meyer store, for instance. Totally at mercy of the whims of the consumer, foggy airports, snowy passes, random terrorist attacks, major news of any type, negative press, etc.

From The New Yorker Magazine, December 24, 2007 edition:

"The Christmas shopping season can account for as much as forty per cent of a retail store’s annual revenue and as much as three-quarters of its annual profit."

I've kind of always thought these stats were an urban myth. I mean, unless you're selling Christmas Tree lights or something equally holiday oriented, it seems hard to imagine.

Even at our Best Christmas levels, we only do maybe 35% better than our worst month of the year, and profit wise, it probably only accounts for, I don't know, something like 12 to 18%. But it is an extremely important month for us in that we need to pay off as many debts as possible before the desert months of Jan. to June, where the rubber band stretches and stretches and you're waiting for summer relief.

For us, the week after Christmas is almost as important as the week before. While we no longer really cater to the kid crowd, we certainly cater to the tourists and families who aren't sprung loose until the kids get out of school. I can't remember if the kids got out of school so late last year, but I can remember when they used to get out a week early. Now, the extra week will fall on New Year's. Not exactly a trade I would make on purpose.

Still, people come into our store that week. So, when I say it all comes down to ten days, the ten days haven't happened.

The chain stores have trained everyone to wait for the last moment. The big sale is just around the corner. 20 years ago, there was pretty steady business from Thanksgiving Week on. Now, there is a full week to ten days lull when everyone takes a breather.

I'm hoping to do somewhere between 2005 and 2006 in sales. My usual, right in the middle muddle through fall back position...

Tuesday, December 18, 2007

Forget this housing bubble crap, there's some REAL news out there, though the media has inexplicably buried it.

Peter Jackson has agreed to film THE HOBBIT, and sequel (?!), to come out in 2010 and 2011. I'm assuming a two parter, rather than a sequel (!?),

Nerd heaven.
Got my smile back.

I grind my teeth. Broke off one of my front teeth, ground the another front tooth down about half an inch from the crown on the matching tooth. Makes me all snaggletooth.

Had the broken tooth fixed today, and the other teeth evened out. So my smile looks normal -- coffee brown, but normal.

Sitting in the dentists office, glanced through People Mag. Which is apparently now completely content free.

Went to see No Country For Old Men, yesterday morning. I had held off seeing it for a couple of weeks, because I knew it would be just brutal.

Linda and I were the only people there, beside on quiet guy, so don't know if all our laughing was inappropriate. Funny gallows humor.

Existential ending caught me off guard, though after reading The Road, it shouldn't have.

Time to see Walk Hard, or some other comedy.

Monday, December 17, 2007

Today's Oregonian.

"141 homes sell for a total of $65 million at real estate auction
Housing - With 96 percent of the houses going for below the reserve price, "we lost money," says the builder"

Buena Vista.

O.K. I guess I don't understand the term 'reserve price.' Did they sell, or didn't they? Did only 4% sell in reality, or 2.35% of the homes available?

Is this a bait and switch? How about: "Hi, thanks for bidding on our homes. Unfortunately, you did not meet the reserve price. However, you are only 10,000.00 from meeting the reserve price, and with our easy payment plans you could have this home easily!"

The kicker: "None of the 29 Bend homes sold..."

Even at a loss?

Does that mean no bids at all?

Sunday, December 16, 2007

Countrywide has an ad on the Tiger golf tournament, talking about how 'ethical' they are. The tag line is, "That was our story then, and that is our story now."

And in the back of my mind I hear, "And we're sticking to it."

Sort of like when someone says, "Trust me," watch out, someone telling you how ethical they are means theres a question.

More to the point, both honest and dishonest alike will insist they are honest and ethical. So it's a moot phrase.

When Linda and I were in credit counseling years ago, Capital One was the only card that wouldn't make any compromise or concession. The same company that has those ads with Pirates and Barbarians and such.

I know it doesn't need to be said, but advertising is meaningless.
I grew up at the end of Roanoke Ave. in the lower west hills. I could go out the front door, over the fence, and follow a line of vacant lots and gullies all the way to the top of the west hills and have to cross only two roads. From there I could pretty much go east, south or north without running into anybody.

It was my stomping grounds with my friends. We were free to roam. When I was 13 or so, my Dad and I built a motorbike, and my friend Steve Davies had his little bike, and we would zip all over the place, as far as Shevlin Park. No houses, of course. But more to the point, no one hassled us, even the police. It was fine as long as we didn't do any harm.

Pedro's comments in my last blog about being hassled by 'security guards' in black near Tetherow reminded me of an incident years back that was one of the first sign to me that things had really fundamentally changed in Bend.

I was showing Linda some of my old childhood paths, driving some back roads in the west hills (when there were still some back roads), and we came across two women and dogs waving at us frantically. We stopped.

"This is a walking trail!" one woman said, with her eyes glinting in anger.

"I'm sorry! We came through a back way and apparently there were no signs."

"Of course there were signs. This is 'private' property."

Now, I was horribly embarrassed, but it was an honest mistake. But what I most remember is the cold look in both womens' eyes that seemed to be saying to me:

You don't belong here.....

All that roaming territory is gone now. Covered by subdivisions.

When I lived in the student ghetto in Eugene, I had to get in my car and drive a minimum of 40 minutes to reach a place that was neither private property or a public park. I really felt hemmed in.

Here in Bend, I'm only ten minutes by car away from public lands. But it used to be, I could walk out my front door and not worry about getting on anyone's nerves.

The price of progress, I suppose.

Saturday, December 15, 2007

Tried watching It's a Wonderful Life on T.V. the other day, and in the left bottom corner there was a little red, white and blue promo for 'Clash of the Choirs' during THE WHOLE FRIGGEN MOVIE! Did they forget it was a black and white movie?

Saw the Golden Compass. Thought it was great. I thought the books were too heavy with philosophy for my taste, and the movie winnowed it down the essentials. Set design, specials effects and acting were great. Personally, I thought the plot and pace was perfect. I hope they make the next movie.

By the way, if you had never heard anything about controversy, religious or otherwise, you'd have never known it by watching the actual movie. Fighting polar bears and cute little animal companions and cool hot air balloons are what you'll remember.

Read the third League of Extraordinary Gentleman by my favorite all time comic writer, Alan Moore (he of Watchmen, V for Vendetta, From Hell, John Constantine fame). It wasn't an easy read. Both he and Frank Miller seem to delight in defying the expectations of the fan boys. Ended up admiring it more than enjoying it. I still think it's a tragedy they didn't film the actual first LOEG, because it would have been great (politically incorrect, but great.)

Meanwhile, you can just tell that they're filming the Watchmen the way I hoped. Filmed by the director of the 300. The way you could tell Peter Jackson was going to treat LOTR's with respect. It may still be a botch, but this may be the movie that really wakes the public up to the potential of the graphic novel form. But I'm not holding my breath.

It also sounds like they once again botched the I Am Legend story, for the third time. Sounds like typical, give the guy a romance happy ending Hollywood dumbing down. I absolutely loved the book. It had a positive message, too, but a much more subtle and deep one. I'll go see the Will Smith movie for its post-apocalyptic and vampire adventure, but not expect anything else from it.

Patrick tells me I've lost all credibility as a movie reviewer because I like everything.

Well, I hated Armegeddon, and the sequel to 101 Dalmations. So there.

Friday, December 14, 2007

So why are so many specialty stores suddenly opening in Bend?

Why is it, for instance, that it seems as though a dozen children's clothing stores, new and used, have all of a sudden opened?

I think I may know one of the answers.

I'm going to throw out some figures that are absolute guesses, that are meant to be representational, and to illustrate my points.

Let say that 5000 people have moved to Bend in the last couple of years. Let's say that 5% of them open retail stores. 250 people look around and based on their own interests and knowledge, they are going to look for likely stores to open.

Perhaps some of them are interested in games? Or pop-culture toys and statues? Or sports cards? Or anime and manga? Newcomers are going to look around and see no one doing it.

Will they wonder why? Or will they simply assume that the stores that vacated these specialty niches didn't do it right. Will they come to Pegasus and think, he's got it covered? Or will they think, nah, he's treating them as a sideline and I can do better.

One of the surprising things to me, over the years, is how many times people have opened stores in competition to me, without even knowing I existed. American Sports and Anime Mt. never really looked at my store, and I think Brad moved his gaming store downtown a few blocks from me without even considering the impact.

Because, as specialty stores, they will believe they are doing it right. And at first they will be rewarded by the fans. A specialty store will almost always do better than a general store in the short run.

But they are putting all their eggs in one basket. Because every specialty has it's ups and downs.

I think I've done it right. I think after 27 years and watching dozens of competitors come and go, making the same mistakes, that my configuration has proven to be more durable.

For instance, let's take each competitor and my guess as to how much more material they were selling than me at their peak, and at the end.

Gambit Games -- Probably 10 times, at the end probably 5 times.

American Sports -- Probably 5 times, at the end, probably 3 times.

Anime Mt. -- Probably 3 times, at the end, 1.5 times.

Fun and Games -- Probably 5 times, at the end, probably 1.5 times.

Add them up, and I'm halfway to a viable store. Add in comics and books and I'm a viable store.

So what happens? Someone moves to town who loves games, looks around and doesn't see a game store, and decides to fill the niche.

Zero is a more dangerous number for competition than 1 or 2. Zero invites new competition, any of them who could be 'Crazy Eddies' and or people with more money than sense.

So two years ago, a dozen people -- who love kids -- looked around and thought, the kid's clothing stores in town aren't carrying the brands I want, so I'll do it. At the same time, without knowing about each other.

I've had quite a few clothing store wannabe's come in the store, and when I point out that there are dozens of such stores downtown, they always say the same thing: "They don't have the brands I would carry."

Well, that seems to be slicing the salami a little thin, so thin there aren't enough nutrients to keep them alive.

Over the last three years as housing prices exploded, and downtown filled up, and more and more people looked around for a business to open, there was the incubation period for what's currently happening. I'd bet almost all these folk came from somewhere there were multiple examples of the stores they want to open, and instead of questioning why Bend didn't have such store, they are going to show us how to do it.

Some will be right. Some will make mid-course corrections. But a lot of them will have opened 'specialty' stores that are a little too special for the population and demographics.

Bend is different. 25% retiree? (Notorious for not spending money.) Tourist employees? (Mostly minimum wage) We are an Hour Glass economy, rich at the top, pretty thin in the middle, thick at the bottom.

If I had to put it in a nutshell, it would be this: Almost everyone overestimates the population and prosperity of Bend. Almost everyone misinterprets the demographics. Almost everyone overestimate the demand.

As a whole. I mean all of Bend, not just the rich enclaves, because I'm still convinced that to succeed in Bend, most businesses need to appeal to as wide demographic as possible, long timers, newcomers, red necks, rich folk; and even then, they need tourists to really do well.

Over the last three years the top of the hour glass has kept many specialty stores that wouldn't have succeeded in the past, in business. It seems pretty clear to me that there almost has to be a domino effect to the housing slowdown. Every store is going to see a bit of a decline.

Just as umpteen new stores are opening.
A visit to the competition.

I've always avoided this. It's uncomfortable and awkward. I never did go into Gambit Games, I used to visit American Sports and chat with the owner until I realized that I was the only one giving out information, I visited Fun and Games a few times, and tried to figure out why the owner was buying so many statues, and so on. I visited my former store in the Mt. View mall a few times.

Yes, there are things to be learned. I discovered through visiting Third Millennium that I was totally underestimating the Goth element of the hobby. But it always seemed to me that the owners of the other stores were treating me like a spy, and intruder. Besides, I just try to tend to my own knitting.

I had never visited Anime Mountain. I had kind of heard that Charlie, the owner, didn't like me, but didn't know why.

So Linda and I were getting hamburgers at Dandy's last night, and I popped out of the car and walked across the street. About halfway over, I realized that I intended to go in.

I walked in the door, and I could tell from the look on Charlie's face that he knew who I was. Not a happy look. He seemed vaguely familiar to me, but I introduced myself just to be sure.

After a couple of moments, he told me he was closing at the end of the month.

Oh, oh. I thought. He probably thinks I knew that and was here to pick his bones and gloat.

I'm sorry to hear that, I said. And I am. I've learned I gain absolutely nothing from the demise of other stores, and I can always put myself in their place.

Yeah, I said. I heard that they were downloading six million anime's a month? was it?

Every week. He said grimly.

Anyway, I could tell he Really, Really didn't like me. That he was forcing himself to be civil. So I finally asked if he had been in my store.


Uh, I take it you didn't have a good experience?

You treated me like shit, man.


Here's a little secret. I'm constantly fighting the battle of patience. I'm still learning how to deal with difficult people. I know, I know. It's hard to believe. I need to be patient with every customer.

Over the years, I've had a few bad stretches where if the customer said the wrong thing, I was all over them. Questioning my honesty and ethics wasn't a good idea. Usually in times of stress. One of the reasons I have an employee with regular hours is to give customers who can't hack me another chance to come in. I get along with the vast majority of customers. I've almost never had an incident over comics, or over books, very few over toys, the most over sports cards, and apparently at least one incident over anime.

I usually managed to corral those feelings, pull them back, I HAVE gotten better over the years. It's very, very rare that there are overt bad feelings these days. But go back 15 years ago as my sports cards are falling through the floor, I'm bleeding red ink, and I'm being accused of being 'over-priced' by former customers, and yeah, there were a few harsh words.

There's also this unfortunate tendency on the part of customers to 'take sides.' If they like one store, they often will dislike the other stores, sometimes without even going in them.

As I said, I try very hard to be patient. And I think I'm doing much better over the last 5 years or so. (Maybe not coincidentally, as the store has done better.)

Well, I say to Charlie. Maybe I was having a bad day. Did you ever come back again?

No, it only takes once.

Well, I apologize if I treated you poorly. That should never happen.

He still didn't like me, not one bit. We chatted a few more minutes, and I'm trying to figure a graceful exit, and my wife honks her horn outside.

Got to go! I say.

Anyway, Anime Mt. is the last of the competitors. Last man standing. Kind of surprises me that so many stores are opening in Bend, when so many stores I've known over the years are closing. A bit of cognitive dissonance.

It's a great reminder to me to continue my lifelong project of trying to be patient with people. Friends tend to come and go, but enemies accumulate. After 27 years of dealing with the public, with my fairly prickly personality (not always, not even mostly, I can be charming too), even one incident a month, out of the thousands who come in the door, would be 324 people running around not much caring for me or my business.

100% probably isn't possible. People being people. But there should always be a way to diffuse the situation.

Hell, my treatment of Charlie (and he may have been way out of line if I remember right) could have been a motivation for him opening a store to 'show me.' I've heard of worse motivations.

I try to treat the competition with respect. I always refer people (even when I hear that they aren't reciprocating.) Hell, most of the time I defend the other store if someone says something negative. I think it is professional to be both polite, and yet a little distant from the competition. Everyone does things differently.

I told this story knowing it may let some of you think I'm some kind of ogre. Really, I'm not. Really, I'm pretty much a nice guy. I promise you I'll greet you when you come in the door, and be pleasant and help you to the best of my abilities.

Thursday, December 13, 2007

So here I am, feeling all strong and stalwart for having paid double my mortgage over the last 18 months, halfway through my 3 year goal. And there's an article in the Bulletin saying,

"Wrong! Mortgage breath, wrong!"

Saving for retirement, they say, is more important. Paying off credit cards with higher interest rates is more important. Having savings for emergency is more important. You need mortgage to save on taxes. It is stupid to tie up money in an unliquid investment.

I'll even add a couple of arguments which I've heard but they didn't mention. The dollars I pay for my house in the future may be less than the dollars I pay now, meaning that my payments relative to income actually may decrease. Inflation is a friend to a person with a mortgage. Plus, 15 years is a long time to wait for the benefit, in this uncertain age.

O.K. I buy the arguments. But here is where I make like a real estate agent and ignore reality.

I'm still gonna do it, dammit.

If I pay double for three years, I more or less cut the mortgage to 15 years, which is exactly the time to my retirement. (Not that I'm going to retire.) That pretty much answers to tax argument. The fact that I may not enjoy the benefit since it's so far away, well maybe my wife will or my kids. I can dig that.

The not having six months earnings to fall back on in savings. Yeah, right. I've heard that from my first year of business, and it was crazy then, and almost as crazy now. I've got a bit of savings, but six months?

The credit card payments. Absolutely, but credit cards will always be with me. I've managed to keep them relatively low.

The being house poor? Hell, when haven't I been? From the time I got out of college, I've almost always paid more than half my income on housing, after my first few experiences with roommates (where have you gone, record collection? Why do you hate me so, phone company?)

The retirement? Well, I intend to make the maximum donation to my IRA each year that is allowed by taxes, but this will be my second year. No way that is going to do much for us. I've always known that inheritances, such as they are, are going to be the bulk of our retirement, plus whatever we can get from our businesses. Both types can fall through, I know, but there it is.

Finally, the fact that the money is tied up, that it isn't liquid.

Well, exactly. That's almost the point. I can almost guarantee you that if I hadn't paid the extra mortgage, that that money wouldn't be around; in savings, in IRA's, in credit card payments. It's the very fact that I can't get it out that makes it good for me.

Besides, when you've spent half of your career in the negative, and not just a small ways into the negative but way, way down, just being even is a huge improvement.

But mostly, I think a person needs to do what works for them. I know myself, and I know that this is one positive thing I can accomplish.

Wednesday, December 12, 2007

I wasn't even going to compare this year's sales with last, because it doesn't matter. I've got one more week of reorders to make, and I'm done. I can't really affect things.

But this mornings article in the Bulletin about Christmas sales was too much to ignore.

I can tell you this. No one really knows.

Because Christmas comes down to the last 10 days.

This is what I found.

I'm only 200.00 behind last year. Which is the equal to one big sale. In fact, I had a customer call me who was late and offer to pay over the phone, and I told him it wasn't necessary.

It is a statistically meaningless amount.

I'll tell you why: Last year was also 200.00 below the previous year, and yet ended up being 15% higher.

It all comes down to the last 10 nerve wracking days.


Merry Christmas? I'll start feeling that on Christmas Eve. Then it will all wash over me. But until then, I'm on pins and needles.

Tuesday, December 11, 2007

Tetherow has announced that they have 'closed' on 19 sales.

As Bendbusterbilbo would point out, these are houses that aren't built yet.

But even if you take these figures at face value -- which, after the 'sell-outs' at the Plaza and Franklin Crossing is perhaps naive -- I'm not terrible impressed.

Tetherow has been in the works for how many years? Bauhofer and his co-workers from top on down have been swimming the real estate pool for how many years and they've snagged 19 friends and acquaintances and strangers to put down a down payment of some kind? Or just to commit?

What's really involved here? How much money has really changed hands?

As a store owner, I can tell you that sales mean nothing. Profits are all that count.

I have ways of boosting sales in the short run, if I needed to make a statement. For instance, I could call in people who have already committed to buying something from me and get them to all come in on the same week. (I don't do it, because it's a short term boost and there is a danger of getting those people trained to wait for the call.) Or, I have a few guys who I send stuff to automatically every month, and there is a bit of flex as to when I send it. I arrange to send everything off the same week. And so on. Have a couple of deals. Call a couple of customers who have been sniffing at a certain expensive item and offer them a discount. And so on.

In other words, if I needed a press release, "Pegasus sold x dollars worth of stuff this week." I could do it. And it wouldn't mean much.

So the golf developer, Mr.Kidd got the first site? I'm sorry, this looks more like a perk than an actual sale.

How much wink, wink, nudge, nudge is going on? Hey, if you work on our golf course instead of that one in Montana we'll give you your choice of sites and a sweet heart deal? And if you use it a couple of time for vacation and then want to sell, we'll guarantee you a profit?

If you ever open a store or restaurant, one of the charming things that will happen is that your friends and family will come in early and help you out. They may have had their eye on a certain item but never pulled the trigger and there it is in your store and to help you out they buy it. And so on.

It just makes sense to me, if you are talking about projects worth 100's of millions of dollars if they pan out, that a few minimal down payments in escrow wouldn't be hard the finagle. I'd be completely amazed if all 19 'closed' sales are to strangers off the street.

Hey, Joe, I'll put a down payment on one of your homesites if you put a down payment on one of mine. Don't worry down the road, we'll take care of it.

Nothing illegal, as far as I know. I'm not saying that's what's happening, just that if little old me can figure out several ways to 'close' a deal, so can these guys. Probably in ways I haven't even conceived of.

Monday, December 10, 2007

I haven't done a housing blog for awhile. The whole scenario is pretty much playing out the way I expected. Besides, I'm beginning to think the commercial boom is even more dangerous.

I am amazed by the relentlessness of the real estate people, their level of denial and spin.

For instance, when it was pointed out that 2000 real estate agents had succeeded in selling less than 100 houses, someone popped up to say that the 2000 figure included all the Central Oregon.

Well, that's different, then. 2000 real estate agents sold more like 150 houses! No worries!

Real estate people constantly refute the bare facts with tiny little fig leaves, and the media says, the emperor isn't naked, he's clothed splendidly!


Gravity will assert itself.

I have a different take on it, anyway. While most of the bubble busters were talking about what a pathetic sales figure 82, or 92, or 102 was, I was completely amazed by the opposite.

There are still 100 damn fools who will pay current prices!

If I walked into a store and every item was discounted, and came back a week later and every item had been discounted again, why would I buy?

Here's how I would do it if I was in the market, and possessed a down payment and knew I could get the credit.

I would watch the daily price changes on the Bend Economy Bulletin Board, and when I noticed that 10 to 25% of the changes were up, I'd start shopping. I'd identify, say, 8 or ten houses I thought I might like, and I would watch to see if any went down in price further. Then, I would make a firm, solid offer at say 15 to 20% below asking price to each of the houses left, and take the one that accepted.

I think you'll have to wait maybe a year, or a year and a half. If you're worried about missing the boat, just keep checking the BEBB.

I can't think of any reason to buy right now. Well, one reason, and it's a lousy one. That you just have to have that one house above all others.

In business, I've learned never to respond to that impulse. There is ALWAYS another opportunity, always another product just as good. To me, this is the height of immediate gratification that you'll have to pay for the 30 years.

If by waiting a year, you can managed to save 20k or 30k or 50k, you will shave years off your mortgage. Years and years. Just fucking wait!

There was a recent article by a NPR correspondent moving to Bend.

He was surprised that it was as expensive to live in Bend as it was Portland. Hey, you accepted a job without checking out the town? Strike One!

Then he went to real estate people for information. No one else was mentioned, no evidence that he spent any time researching the fact himself. Not only real estate people, but Becky Breeze! Who told him: "There's never been a better time to buy!" Strike Two!

Then he goes ahead and buys probably the most overpriced house on the market, a westside 'cottage.' Strike Three!

Maybe the real estate people are right. Maybe this market will just keep rolling along. As long as they have the media on their side, they might just be able to keep fooling people.


Sunday, December 9, 2007

You just never know how these things are going to play out.

For the last 3 or 4 years, I've been like a kid in a toy store, able to buy anything I wanted. Well, within reason. But, before that, over the two previous decades, I'd never been able to order everything I thought the store needed to do a good job in every category. I always seemed to be short of being able to do the job the way I wanted to do it.

So I started ordering the material I thought we needed to be a great store. Feathering the nest. Not only that, I was adding new categories; board games and new books.

There was almost no downside to ordering so much, as long as I sold enough of the extra to pay for it. The extra needed only to be break-even, because the nut was covered already. So if I ordered an extra 35%, and sold a third of it, I was O.K. Because I was also able to take advantage of clearance sales which padded the margin even more. Little by little, I was able to fill in every category: toys, games, cards, books, comics, and so on.

The only downsides I could see were that the store got fuller and fuller, to the point of clutter. And that I had to pay taxes on the extra inventory, because the IRS saw it as profit. I've mentioned before I seem to sell more stuff the more stuff I have, so the clutter was acceptable. The taxes -- well, as my accountant always says -- it just means you're making a profit, which is the point of the whole thing in the first place.

I had to change my focus a few months ago. I'm ordering what I think the store needs, instead of what I want. Completely different approach. Two major reasons: one, the store was packed, and any 'extra' I brought in was just going to have to displace something I've already paid for, which isn't very cost effective.

And, two, there was a distinct chill in the air. Comics and graphic novels, which had gone through a really strong growth period, were leveling off. Cards are still in a downward spiral, though we are selling quite a bit more than a few years ago because I brought in inventory and with the demise of American Sports. Same thing with games, overall industry slowdown, but an improvement for us because of the demise of Gambit Games.

Still, not a time to keep adding. Add in the potential for a local and or national recession, and I decided it was a time to maintain.

So I cut my preorders to the things I knew we needed.

I fully expected that I'd have to increase my reorder budget as I started to run out of things.

But that isn't what has been happening. My reorder budget has been more than sufficient to cover the shortfalls. The preorder material has been enough, in most cases, to cover demand.

Which just means, I was way over ordering over the last three years. If I hadn't already known, this would just confirm it.

Saturday, December 8, 2007

I was looking at a blog of a comic guy visiting a Japanese shopping district. Simply astounding design and ambiance. Entire stores dedicated to Peanuts, for instance, or TinTin, toys stores to die for. I don't think stores like that really exist in America; maybe in New York, maybe....

So, it always sends me into planning my dream store. I figure if I buy a dollar lottery ticket once a week, I should win a million eventually. So I need to plan my dream store in advance. I'd take, oh, say, only half the million (I'd prudently invest the other half a million, of course) and use it to create the best pop-culture store in America.

I figure I would need about 10,000 square feet to do the job right. I'd create entire boutiques within the store, dedicated to retro-sci-fi, fantasy, comics, books, games etc. etc.

Pure foolishness, of course.

Back in the late 1980's, Linda and I had a good run on sports cards. We were booming. So, once, while visiting Sisters, we saw a little 150 sq. foot niche in the side of a building right at the center of the downtown, and I envisioned a little card shop in there. I figured, we just needed to make money in the summer.

The first summer absolutely boomed. But of course it was only 150 sq. ft. so when the space next door came open, and we could knock out the wall between, we grabbed it. We went from 150 sq. ft. to 700 sq. ft. I brought in used books, comics, etc. to add to the sports cards. We'd just visited Seaside, which looked like a coastal version of Sisters, and we saw entire stores dedicated to pewter figures, with a heavy emphasis on fantasy; dragons, wizards, unicorns, pegasi, and so on. No one else seemed to be doing them.

So, we created a nifty little store; same basic location, addition product, much more inviting.

Sales dropped like a stone. We couldn't sell the pewter to save our lives. Used books were ignored, comics ignored, cards sales actually dropped.

Lesson learned: expansion and diversification and improvements don't always work. Especially if the bottom line product just quits selling. Looks and ambiance and all that are great if you're selling product; they don't matter at all if you aren't. And brutal truth, the opposite is also true. If you have product that's selling, ambiance and looks aren't all that important.

You have to sell something.

When sports cards stopped selling, for reasons outside our control, the store in Sisters became untenable, period. And so did the store in Redmond.

So whenever I think of my dream store, I know that I probably wouldn't do it even if I could, because it simply wouldn't pay for itself. It would be an ego trip.

Maybe, if I looked at it as a work of art, like a garden, then maybe I could see doing it.

Or I could take the whole million, invest it in safe investments, and travel to Japan to visit awesome boutiques.

Friday, December 7, 2007

Funny thing is, I actually have a prime example of someone who turned a small business into a big success.

I bought my store from Mike Richardson, founder and owner of Dark Horse Comics, Dark Horse Studios, Things From Another World comic chain, etc. etc.

He opened a little hole in the wall over on Greenwood in 1980. He'd been a graphic arts major in college, and his original focus was on arts and books. But he was also a comic book fan, and the store quickly morphed into a comic and game store. (D&D was just coming on strong.)

Bend was coming off a bit of a boom, and in fact, Mike moved into a much bigger space next door on Greenwood. Then the recession hit Bend, and he shrank back to the original store and hung on. He moved Downtown in late 1982 or so, to our current location.

At that point he left Bend, and started a store, first in Beaverton and then in Vancouver, and then another and another. I managed the store for a year, and then bought it. Mike and I kept in touch for a few years, and went our separate ways. He changed his Pegasus stores to TFAW.

But I was there at the beginnings of his empire, and observed some things.

1.) Mike gravitated toward artistic people. I got hired by him, because STAR AXE and SNOWCASTLES had already come out, and ICETOWERS was on the way. He liked talking writing, and art, and he loved the genre. I think he overlooked my social awkwardness because I was a writer.

He knew other writers and artists who were starting out, belonging to an APA, which was a kind of collective magazine, who's list of writers and artists are now well known. He was able to use these connections to publish his first few comics, and then to snag the licenses to Predator and Aliens (it was DH who had the brilliant idea of combining Predator versus Aliens) and the biggest of all, Star Wars.

He hired creative people, like Randy Stradley, who helped him run his empire. He told me once that he wasn't surprised that I'd succeeded, because he knew talented people when he saw them. Who's to argue? He also saw possibilities: his second comic was a one-shot called, BORIS THE BEAR SLAUGHTERS THOSE TEENAGE MUTANT NINJA CRITTERS, which on the heels of all the copies of TMNT, was very timely.

And, little appreciated by me at the time, he was very creative himself. He came in one day proudly showing off a character he created called THE MASK. I think I patted him on the head and said, that's nice....

2.) He was incredibly competitive. He had been a college basketball player, and he was tall! But what I remember was him challenging me to a ski race. Now, here's a guy who had just taken up skiing, and I was someone who had raced competitively from the age of six through high school, and at my peak, I was pretty damn good. Very good, really. But he was serious about racing me....

3.) He was willing to take great chances. He leveraged every business to the hilt, and then leveraged them back. Restaurants, stores, toy makers, cards, anything and everything that he saw as a possibility. Way more risk than I'd ever be comfortable.
I always figure he took that check from my buying the store and published the comic that got him over the hump....

4.) He was a very strategic thinker. I always used to make the joke that I survived in Bend when he couldn't. But the truth was, he was smart enough to see that Bend was a deadend to his ambitions. He told me once that he made more money the very first week in Beaverton than he ever made in a month in Bend. Tactically, I could argue with some of his decisions -- I don't believe he was a great store keeper, frankly, though he was very hardheaded and often made money in situations that I would have simply broke even. But he was always looking at the bigger picture. He saw the Japanese phenom before most people, for instance.

I knew that Mike has made the big time when I read an interview in the USA Today with George Lucus, and the newspaper described the people sitting at the table in Planet Hollywood as Lucus, Spielberg, some other huge muckymuck, and Mike.

I just never really had the ambition that Mike had. I grew my four stores, and when they collapsed, I refocused on keeping my one little store profitable and gave up on getting bigger because I realized I didn't WANT to get bigger. More money, sure, but I thought I could see ways to doing that tactically, not strategically. It remains to be seen.

When I was dealing with Mike, I felt he had integrity, that he got overstressed and over forgetful. I didn't really know he was so ambitious, frankly. I think he went with the flow, and kept on going.

So, yeah, it's possible to get rich starting from a small business.
Sometimes, I almost feel guilty for not advertising in the Bulletin with the other downtown merchants.

I don't advertise. At all.

I've given advertising many many chance to prove to me that it's worthwhile, that I get something for my money. I'm not convinced.

Still, I wonder if I'm letting down Team Downtown Bend.

Except I don't feel part of Team Downtown Bend, either. I've never belonged to the Downtowners or the Chamber of Commerce.

I could come up with a number of explanations. That when I started long ago, I didn't feel very welcomed. (But all those people are long gone.) That when I went to meetings, I thought their focus was all wrong. That I hate what they come up with, (ANY street closings except the traditional parades, etc.) The fact that so many of them are focused so much on promotion that they neglect the basics -- such as extended hours, (past 5:00 p.m., open on Sundays.) The fact that I've seen so many of them come and go, and their 'good' ideas with them. And so on.

But the truth is, I'm just a loner. I prefer to go my own way, not get entangled. But I've just learned that I'm happier, make better decisions, and that everything just works better if I keep my distance. I try to stay friendly, and polite, but I've never much felt part of the group. I don't play well with other children.

Still, I'm always curious about what's going on. I like gossip, pretty much. So I try to ask a lot of questions whenever I have an unwary downtowner in my grasp. I like being the observer, so to speak.

If I truly believed that advertising would have any effect at all, I'd feel more guilty about not joining in. But I also think it would be pretty silly to spend money that I don't think is effective just to join others.

Thursday, December 6, 2007

It's good to have friends in high places. My friend, who works for Bend Cable, helped me this morning set up my Dad with all his cable needs. He's in Bend Villa Court, and he loves the Military and the Golf channels, and we were having trouble getting it all to work and stay working.

We just bought Dad a new T.V., and he brought a marvelous remote with BIG numbers on it for him to use.

He also hooked up my downstairs, office T.V. (a very nice color T.V. that my Dad had been using) to cable. Believe it or not, up until now I had a black and white T.V. with rabbit ears, that I would sometimes turn on if there was a documentary I really wanted to watch on PBS. Other than that, it stayed in the closet. Now I have a nice new color T.V. with all the channels.

I have to be careful about that. It would be easy for an old married couple to end up watching completely different programs in different rooms. Linda, for instance, can apparently watch Law and Order all day long, whereas I could go the rest of my life without seeing it again.

Mostly, though, we agree on the prime time shows, and I want to be sure that continues.

We have about the biggest old-line T.V. you could have, and it works great. So I just can't justify going for the big screen T.V. But when I do it, I'm getting the biggest most ginormous one I can find.

Meanwhile, like I said, I've been watching downstairs on a black and white, so obviously I'm not fussy.

Wednesday, December 5, 2007

To continue: Start with previous post.

Let's say, for instance, that you start your business with 30k in credit. In your first five years, you use up about half that credit, not because you are in trouble but because you are doing so well you want to invest, to add, to expand, to fix things up.

Business is good. You're not worried about paying it back.

Then you have an unexpected slow down, (and they are always unexpected) and before you can adjust, you use up another 10k of that credit.

Suddenly, you have used up 25 out of 30k of credit.

You survive another few years without using up the credit, and are finally rewarded with a nice few years of upsurge.

But you are only able to pay off, say, 5k of the 25k you owe. Why?

Because you are starting in a hole. You've probably let your infrastructure go south, your fixtures get worn, you've probably let your inventory get stale.

Making money in business is hard even when conditions are good; and the better business is, the more likely that you'll have increased expenses, like rent, increased competition and so on.

So you've got to catch up.

It's as if you start climbing Mt. Everest, not from the foothills but from sea level. You have to walk all the way to the mountain before you can even begin to climb it.

Businesses almost always accumulate mistakes.

New businesses have the luxury of starting out fresh.

So the same economic conditions that look good to a new business, can be bad news to an old business