Wednesday, October 20, 2010

Financial gerrymandering.

One thing to remember. Public entities have to report real numbers. They can do a little financial gerrymandering, but not much.

Corporations also must report numbers, though they can do much more gerrymandering, at least in the short run.

Small private businesses don't have to tell you folks nuttin'. (Nor should we.)

But it's something to take into account every time there is a glowing report of a local business opening or expanding or moving. What I'm saying is -- you really don't know what's going on behind the scenes.

Nor do I.

When I look at my own numbers, I combine them with anecdotal evidence, see what the Big Boys are doing (and try to cut through the fog of numbers) and add to that what's reported public revenues are, and I think I'm getting at least a whiff of reality. (Reality stinks...)

Anecdotal evidence -- which is what most of us have with small business -- is also the least reliable. As I've mentioned before, as much as it drives me crazy, a small business has little choice but to be vaguely positive when things are neutral or below, and insanely optimistic when things are going well.

Plus, I'm a great believer in the 80/20 rule, and there is always a one in five chance that you're asking one of the 20% of stores that are doing well even in the worst of times. In fact, chances are pretty good, because they're the ones actually talking about it.

I suppose I could make the case that it doesn't matter how everyone else is doing. It only matter how I'm doing.

But I think it's important to have a reality based view -- a way of checking your performance, both good and bad. And to look for reasons as to why you might be doing better or might be doing worse, than the other guys.

Plus -- I like to check my own analysis and observations against what actually happens -- which gives me more confidence in predicting my own business results.

Personally, I think the local economy has taken another leg down -- despite the ever-opening businesses downtown. It is official -- comic sales were down 12% last quarter, which confirms my own observations -- but I also think I'm seeing less local businesses, and less tourist spending.

So I'm expecting the first 6 months of next year to be tight -- as usual, but maybe a bit more than usual.

1 comment:

H. Bruce Miller said...

"Personally, I think the local economy has taken another leg down"

Guy I know who tracks the local real estate market closely (no, not a realtor) says the housing market has started to turn around but it will be four years before it stabilizes, and even then prices will be about 80% of what they were at the peak of the bubble.

For what it's worth.