You know the saying, Hindsight is 20/20.
Well, I think ironically enough, foresight can also be more accurate than current sight.
Going into this downturn, I could make some educated guesses about how it would play out. I had experience in multiple bubbles (cards, comics, pogs, magic, beanie babies, pokemon), I had experience in local downturns (most of the '80's). I could make some pretty solid theories about what was going to happen.
Measuring the size of the bubble, I could make some overall guesstimates about how deep and how long this thing would go.
Add to that some research into previous recessions, and especially housing bubbles (California and Texas), I went into this downturn thinking it would take at least 7 years, that it would be deeper and longer than anyone expected.
Roughly speaking, I was telling myself to be aware that I'd be wanting to constantly call an end, to believe -- to hope --we were over the worst. And to remind myself that it can take so long to come out of one of these downturns, that you more or less give up looking for it. That when the recovery starts happening, you're still dealing with the wreckage and often don't recognize it
By my count, it has been about 3 years since Bend's bubble burst: for me, Sept. of 2007. I started this blog in Nov. of 2006, so I had about 10 months to prepare. (I was preparing before that, obviously, mostly adding inventory and new product lines, but that's when I really got serious about getting debt out of the way.) Again, by my original estimate, we have at least 4 more years to go.
I was remarking to Linda yesterday how no matter what sales do, the store keeps turning a profit. My cash flow remains manageable. How could that be?
Pretty simply: I don't have debt. Debt is what caused all the stress in the past, no matter what my sales were doing at the time. I've had sales much higher than now, and been unable to pay my bills. There was a point in time where 40% of Gross profits were going toward debt. So this has been a walk in the park, compared to those bad old days. That plus having sufficient inventory to go week to week. And having actual cash and credit to call upon. All I have to do is adjust spending to results.
So, even as severe as this downturn has been, it's been relatively easy to maneuver.
Another thing going in that I knew was going to happen, was that I wouldn't have any real idea how anyone else was doing; (nor, given the secrecy of small business owners, was I likely to know) ; I warned myself that I'd see things that didn't make sense; that I'd sometimes feel like I was the only person going through it. I used to have a saying that "If I'm feeling it, chances are everyone else is too." Which is fine, but in the midst of it, can be small consolation, especially if everyone else appears to be thriving. Finding out later that everyone else was in the same boat is reassuring, but doesn't help much in the moment.
When the actual details, the actual numbers, start rolling in, it becomes easy to lose sight of the overall plan; the overall theory I had going into the bubble.
Another thing that has kind of thrown me, is how well Bend seems to be doing retail wise. Lots of new stores, not a whole lot of vacant spaces. But here again, I have some previous experience. The surge of stores often happens well after the bubble has popped. And I believe that Bend has retained it's appeal to a surprising extent.
The final little insight I had going into this, was that I thought that Bend -- having had a relatively late and relatively large -- hell, huge-- bubble -- would also be out-of-sync with the rest of country, hell, out-of-sync with Oregon. There would be continue to be a delayed reaction here in Bend, no matter what was happening elsewhere.
In the end, it doesn't matter how anyone else is doing. It's in my best interest for them to be thriving, because I don't live in a vacuum; and a rising tide raises all ships. (if you don't mind a few mixed metaphors.)
Anyway, around September of last year, sales started to increase from the previous year. I made a bunch of posts about how this was in comparison to probably the worst economic drop since the Great Depression; Sept, 2008 was when Lehman went down, and there a whole bunch of down months following. So, as I kept saying, it was like beating up a 90 pound weakling.
But frankly, I missed the most obvious metaphor.
A Dead Cat Bounce.
It was the very epitome of a Dead Cat Bounce.
After a string of seven up months, the recession took hold again, and sales started dropping back down. A double dip, if you will.
The Dead Cat Bounced, and rolled toward another ledge, and has started rolling downhill.
So far, except for the initial surprise that the bounce was ending, I've been pretty good at pre-empting the course of the economy, of making sure that my base of spending was below what was actually happening. So I've had a bit of a wake-up call to continue to be careful.
So far, I'm attributing about 70% of the current downturn to the economy, about 20% to the fact that most of my product lines are on down cycles, and about 10% to the fact that I've taken a whole lot of time off.
All predicted in advance, but temporarily forgotten in the heat of battle.
So I'm still feeling pretty good about my navigating the course of this recession, and I just need to keep reminding myself of my original predictions.
Well, I think ironically enough, foresight can also be more accurate than current sight.
Going into this downturn, I could make some educated guesses about how it would play out. I had experience in multiple bubbles (cards, comics, pogs, magic, beanie babies, pokemon), I had experience in local downturns (most of the '80's). I could make some pretty solid theories about what was going to happen.
Measuring the size of the bubble, I could make some overall guesstimates about how deep and how long this thing would go.
Add to that some research into previous recessions, and especially housing bubbles (California and Texas), I went into this downturn thinking it would take at least 7 years, that it would be deeper and longer than anyone expected.
Roughly speaking, I was telling myself to be aware that I'd be wanting to constantly call an end, to believe -- to hope --we were over the worst. And to remind myself that it can take so long to come out of one of these downturns, that you more or less give up looking for it. That when the recovery starts happening, you're still dealing with the wreckage and often don't recognize it
By my count, it has been about 3 years since Bend's bubble burst: for me, Sept. of 2007. I started this blog in Nov. of 2006, so I had about 10 months to prepare. (I was preparing before that, obviously, mostly adding inventory and new product lines, but that's when I really got serious about getting debt out of the way.) Again, by my original estimate, we have at least 4 more years to go.
I was remarking to Linda yesterday how no matter what sales do, the store keeps turning a profit. My cash flow remains manageable. How could that be?
Pretty simply: I don't have debt. Debt is what caused all the stress in the past, no matter what my sales were doing at the time. I've had sales much higher than now, and been unable to pay my bills. There was a point in time where 40% of Gross profits were going toward debt. So this has been a walk in the park, compared to those bad old days. That plus having sufficient inventory to go week to week. And having actual cash and credit to call upon. All I have to do is adjust spending to results.
So, even as severe as this downturn has been, it's been relatively easy to maneuver.
Another thing going in that I knew was going to happen, was that I wouldn't have any real idea how anyone else was doing; (nor, given the secrecy of small business owners, was I likely to know) ; I warned myself that I'd see things that didn't make sense; that I'd sometimes feel like I was the only person going through it. I used to have a saying that "If I'm feeling it, chances are everyone else is too." Which is fine, but in the midst of it, can be small consolation, especially if everyone else appears to be thriving. Finding out later that everyone else was in the same boat is reassuring, but doesn't help much in the moment.
When the actual details, the actual numbers, start rolling in, it becomes easy to lose sight of the overall plan; the overall theory I had going into the bubble.
Another thing that has kind of thrown me, is how well Bend seems to be doing retail wise. Lots of new stores, not a whole lot of vacant spaces. But here again, I have some previous experience. The surge of stores often happens well after the bubble has popped. And I believe that Bend has retained it's appeal to a surprising extent.
The final little insight I had going into this, was that I thought that Bend -- having had a relatively late and relatively large -- hell, huge-- bubble -- would also be out-of-sync with the rest of country, hell, out-of-sync with Oregon. There would be continue to be a delayed reaction here in Bend, no matter what was happening elsewhere.
In the end, it doesn't matter how anyone else is doing. It's in my best interest for them to be thriving, because I don't live in a vacuum; and a rising tide raises all ships. (if you don't mind a few mixed metaphors.)
Anyway, around September of last year, sales started to increase from the previous year. I made a bunch of posts about how this was in comparison to probably the worst economic drop since the Great Depression; Sept, 2008 was when Lehman went down, and there a whole bunch of down months following. So, as I kept saying, it was like beating up a 90 pound weakling.
But frankly, I missed the most obvious metaphor.
A Dead Cat Bounce.
It was the very epitome of a Dead Cat Bounce.
After a string of seven up months, the recession took hold again, and sales started dropping back down. A double dip, if you will.
The Dead Cat Bounced, and rolled toward another ledge, and has started rolling downhill.
So far, except for the initial surprise that the bounce was ending, I've been pretty good at pre-empting the course of the economy, of making sure that my base of spending was below what was actually happening. So I've had a bit of a wake-up call to continue to be careful.
So far, I'm attributing about 70% of the current downturn to the economy, about 20% to the fact that most of my product lines are on down cycles, and about 10% to the fact that I've taken a whole lot of time off.
All predicted in advance, but temporarily forgotten in the heat of battle.
So I'm still feeling pretty good about my navigating the course of this recession, and I just need to keep reminding myself of my original predictions.