January 27, 2008.
How does the song go, "First I was afraid, I was petrified, just thinking how I could live without you by my side.......just thinking oh so many night of how you did me wrong" you get my drift right? I will survive without the big and the small accounts that do not pay me, or um steal, or refuse to pay me. I am not going any where.
Hang In There Baby !
Woah....that last post was good to get off my chest. I am very thankful for all the support, well-wishes, karma, tweets, Facebook support and even that one person who was willing to beat up the people that aren't paying me. No need, really - a black eye won't put money in my pocket. It is good (and bad at the same time) to also hear that there are so many others that know what I am going through. I really wanted to keep up the positive attitude and to keep my chin up - but this is reality folks. I am humbled and sad that so many entrepreneurs "get" what I am going through - at least I am not alone.
When the money stops at the top, it stops all the way down to those of us that own a small business. Anyone in the wholesale business understands that you never get paid by everyone on time, but when a lot of our top channels don't pay and sales are bad, I can not and will not be the bank. I am in business to make money - not lend it.
As I have stated earlier, I am not going down without a fight - as long as people still want to purchase my products - I will still sell them. Maybe off the back of my pick-up truck at the Flea Market....no gosh I hope not, I am kidding. I have other options. Here are some possible ideas for those of you (and for me) that are in my boat:
Show Me The Money
As of February 1, 2009 Jamie's Painting & Design will only ship products that are paid for. We drop ship which works when people pay their bills, those days seem to be in the past. We have carried companies for months until we were paid. Not anymore - no wiggle room. Best quote ever about selling wholesale came from Pamela Barsky, "If I dropped every company that did not pay on time I would not be in business" - it is just the nature of the beast. In this Economy I am not willing to carry over $5000 for companies that may never pay me. I can not wait 90, 120 or forever for Company X to send me a check....
Back to reality - if you use a credit card great I ship your product. If you pay net 30 - tell your customer how long it will take and why. That is it- I am done playing Mr. (Mrs.) Nice Guy - I am done. The sales channels get the money up front, me I wait 30, or 60 days....or I never get paid. My taxes this year....not pretty.*
I am usually not so hard on any one part of my business - I usually make exception, bend the rules. Those days are over...when dealing with money that is.
*Just so we are clear I would like to make it very clear that not ALL my channels do not pay. Some I have been with since the beginning of time, some for a few months - and never had one problem. I would say the majority have been fabulous....just like in life though a few bad apples can spoil the bunch.
Diversify Your Funds
Ya, ya I know this is not about funds but you could spread yourself (and business out). Now is not the time for an ego or a "um I am sorry I do not do that" - uh , yes you do. My creative cap is on and I am entertaining lots of different products, ideas - even partnerships. To stay alive now I need to Do It and do it well.
- Do favors, take special orders, those companies that stayed alive in bad times tend to not only survive but succeed in the future.
- Do not let your ego get in the way of making a buck. I am not saying you should do things you do not believe in, or jeopardize what you and your company stands for - but do not get all uppity now. Everyone is struggling.
- Do make the hard decisions now, before someone else forces your hand
- Do keep your head up and your eye on the ball or the money...whatever - stay focused
- Do stay positive
Call me crazy, call me optimistic but seriously if you can stick with it for what, 11 more months?? The latest report say that we should be out of this Recession in 3 months - that is not too long.
Where Can you Squeeze?
If you rent space (like me) you have the problem of paying rent (and probably employees). Though it is not ideal we have considered renting out my front office - no, not my dream - but better than going out of business. We are not ready for this - but it may become a way to keep money coming in when my channels are not paying.
- Do you have extra space?
- Can you rent our warehouse space?
- Can you share with another growing company?
- Can you re-negotiate your lease? Can you get out of it?
- Can you move the business back in your house?
- Can you cut back on office perks?
Those of us that are small business owners get it - there is a reason we are small. We are mostly lean mean machines - yet we survive, we are able to make it work. However, when you are so lean you are already at your wits end - and then to have the trouble we have now. It can be hard, but you have to prevail, you have to get by with less - no one ever said running a business was glamorous. I do try to pretend it is though.
We have a huge warehouse in the back, where we do our shipping, make tiles, etc. We moved things around - created some extra space - and rented it out. Not ideal, sort of an eye soar.......but every time I see it all I think of is "cha-ching".
Hate to Say it....Everyone can be Replaced
I found this out the hard way - as most of us do, I was replaced (more than once). I have been on both sides of this fence, the one being let go and the one letting someone go. I empathize with both - I understand how tough decisions need to be made. And, well the big guy making the big bucks....no that is not describing me - but he makes the tough decisions.
I hate to write this down, but it must be said. Companies large and small are laying off people - it happens. We have all experienced it, either by watching a parent or ourselves, a friend or a spouse lose their job. It is a blow to your ego that takes a while to get over. It is horrible, it sucks and I know from first hand experience and as a child watching my father get laid off. It can suck all of the energy out of you and make you believe you are not worth of the career you chose. However it means staying in business or closing up shop:
- Can you scale back your employees hours?
- Is a pay cut out of the question?
- Can you combine two positions into one?
- Can you find work for another employee?
- Can you cut your pay back?
- Close business on Fridays? Mandatory days off?
No fun jobs, tons of work - but do you want to be able to sleep at night. Having empathy for your employee that is being laid off is key, and trying to help them through it is human. If you can find a way to not do it - good, if you have to do it -be nice. Remember we are all human and sometimes we all need to break up.
Know When to Fold Up
I hate to say this but uh....running a business is not for the weak of heart or anyone with a thin skin. If you are not a 100% committed, now is the time to cut and ship bait - oh wait ship and cut bait? Whatever the saying is, if you are not ready for this tough year ahead, or if your heart it is not in - worse if your family can not afford the sacrifice - don't do it. Now is not the time to make everyone around you suffer. I am not being negative - I am being realistic. I would like to think I am a sarcastic realist, instead of a negative pessimist. You have to be willing to make the tough choices, sacrifices and go without. If your heart is half in it.........really, why bother?
Me Me Me & My Company
My heart is still in it - I still choose to fight. I have other options. I am going to do whatever it takes (legal people - give me some credit) to make sure Jamie's Painting & Design survives. I will cut back, I will make more adjustments and I will have no problem with it. I do not think now is the time for me to get all um, big headed or "Jamie don't do that" on ya'all - I can scrub a toilet, ship a package, call a sales rep, do a produt sketch, call a sales channel and empty the garbages in one hour. At this time I will do anything to stay alive.
Good luck to everyone - I hope my suggestions (and solutions for my business) help you out....anyone have any other ones....send 'em over please. Pretty please...