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Business in a down economy

Discussion in 'Picture Framing Business Issues' started by AWG, Feb 29, 2008.

  1. AWG

    AWG SGF, Supreme Grumble Framer

    An article in USA Today today concerns how large retailers are handling this economic downturn we're all dealing with. I think things like this sometimes become self-fulfilling; as talk of gloom and doom grows, apprehension and G&D take hold (regardless of your personal reality) and voila - disaster. I mean, a .10/gallon jump in gas means a WHOPPING $2 when I fill up - gas might be one of the most in-your-face things we pay for, but I honestly feel it's impact is overblown. Fifty cents a gallon - that's a problem.

    Not looking to start a discussion on the economy, monetary policy or anything else -- but the article made me think -- How are YOU handling this in your business? Not personal stuff like carpooling or not eating out as often, but in your frame shop. Are you requiring payment in full? Bundling orders? Going COD rather than running up big tabs with vendors?

    Are you marketing any differently? It seems SOP for for many retailers to cut margins to create cash flow and traffic (think holdiay sales) - are you doing this?

    Has your business suffered in this downturn?
    Are you doing anything different?
    Are you being proactive NOW, or just waiting, watching and hoping things turn around?

    Tony
     
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  2. PaulSF

    PaulSF PFG, Picture Framing God

    I'm definitely going to return to my policy of requiring payment in full upfront. I relaxed it for a while, and now I'm financing my customers' cash flow. They all usually pay by credit card anyway, so I don't see the material benefit to them of paying only a deposit. My rent is due in full on day one.

    I'm also willing to be a little flexible to close a sale. If that means a modest discount to make the customer feel good about what she's paying, I'll do it. I've had two customers this week, just two.

    The one thing I'm not scaling back is marketing. I'm running some newspaper ads, doing some direct mail, and doing some internet marketing. If I have to put it on the credit card, fine, I'm never paying those things off anyway (you hear that, American Express? You are sooo scroooooooed!). I think it's a huge mistake to cut back on marketing when times are tough. That's exactly the time you need to do more marketing.
     
  3. Maryann

    Maryann SGF, Supreme Grumble Framer

    We're doing more marketing also (cable TV commercials). They seem to be paying off and business has been okay.

    I, for one, am tired of the media crying doom and gloom about the economy. I wish they would just report the news instead of trying to make it.
     
  4. Framerguy

    Framerguy PFG, Picture Framing God

    AMEN, Maryann!!! The business of reporting the news has degraded to only bad news to begin with and, if there isn't enough bad news to fill up a broadcast or newspaper issue, they manufacture whatever they need or pick up on mundane issues that would normally never make the back page let alone anywhere else in the news. I stay well behind the current news for this very reason. I don't choose to muck up my day with a plethora of negative news that really isn't of any materialistic use to me and won't affect my life in any way. If the stock market fluctuated yesterday, I really don't see the recession being initiated by that action. Tell me if it has been in a steady down turn for the last month and I will pay attention. But don't associate a hiccup with the current state of the economy please. And if I wanted to really read about somebody's pet chicken who got into the engine bay of their 4WD and was turned into chicken salad when the mama started the engine to pick up the kids at school, I could probably see it on some idiot specialty show on the tube.

    Give me the meaningful news as it happens and leave all the other garbage for the tabloids, thank you. :fire:
     
  5. Jerry Ervin

    Jerry Ervin PFG, Picture Framing God

    I have had the best February I have every had. In 19 years.

    I have almost completely stopped advertising. The Internet has by far been the best thing I have ever done for my business. I plan to go the Yellow Pages route one more year. I may drop it next year.

    I love it when all the talk is doom and gloom in the media. My business always increases. I really wished I understood why.

    Maybe, when my customers see the doom they stop buying houses and SUVs and start re-decorating and repairing what they already have.

    It is when Wally World brags about how great business is and the economy is rocking is when I struggle.
     
  6. Julia

    Julia CGF II, Certified Grumble Framer Level 2

    Our numbers are up over last year to date. But, we also had a severe ice storm last January that crippled business, an event we did not experience this year.

    Things we are doing:
    1. paid off credit cards
    2. guarding cash
    3. definitely batching orders in order to take advantage of larger discount
    3. increasing web exposure
    4. larger road side signs

    3 and 4 are important as half of our new clients every month come from drive by and web search.

    Regards,
    Julia
     
  7. Class

    Class CGF II, Certified Grumble Framer Level 2

    Our numbers are also up from last year. Also, instead of two full time framers we have me and one guy doing 12 to 15 hours a week (we started that over christmas break, tough but doable), so our overhead is down as well. The one thing I can say we are doing is taking advantage of the fact we live next to a HUGE university. Don't get me wrong, we had been contracted out by them in the past but it seemed so piece meal. So this month I picked up the good old campus directory and started emailing and sending direct letters to heads of departments and purchasing departments, also fraternity and sorities have those "walls of fame". Has anybody done this before and how has it worked?
     
  8. PaulSF

    PaulSF PFG, Picture Framing God

    Let's get honest -- we really are in a recession, or on our way into one if not there yet. It isn't just media hype. Housing sales have slowed dramatically here, and foreclosures are up. This is real. Wages and salaries are stagnant, and inflation is further eroding incomes. Food prices really are up, and so are gas prices. I now pay $4 for a loaf of wheat bread. The Shell station up the road from my store is advertising its lowest octane gasoline at well over $4 per gallon.
     
  9. Paul Cascio

    Paul Cascio SGF, Supreme Grumble Framer

    I've heard from a number of framers whose sales are up substantially.

    Kassandra, I agree that the cost of gas doesn't really bother people too much. We can change our habits to make up some of the difference.

    Where prices really have an impact is the cost of heating one's home, especially in the northeast, where many houses rely on oil for heating. The cost can be substantial. In addition, people have to expect the worse when it comes to temperatures so they tend to hold back on discretionary purchases.
     
  10. JFeig

    JFeig SGF, Supreme Grumble Framer

    the economic picture is all relative to your location.

    Michigan is probably in the worst case situation: see the attached PDF from a well know bank economist. Other Michigan framers note the last paragraph on page 2.

    http://www.comerica.com/Comerica_Co...ations/Docs/MichiganEconomicBrief_2008_01.pdf


    I have not heard of any small retail business in Michigan going gangbusters.
     
  11. DLB

    DLB MGF, Master Grumble Framer

    While I was at the gym this morning, I saw a very newsworthy story about a little person who is 28" tall who had an 18" long baby yesterday!!!! She might even be in the Guiness Book of Records!!! I can now proceed with my day, as I now know the most important news items have been taken care of. A close second was the lady that was trapped in her house due to a mad goose on on the loose in her backyard. NATIONAL NEWS!!!!!!!!! Must be a slow day.

    dave.
     
  12. Emibub

    Emibub PFG, Picture Framing God


    Scary part for me is I have to go out and look for a real job in this economy. As the date draws closer it has me a bit spooked.
     
  13. RParrish

    RParrish PFG, Picture Framing God

    JFieg is right its all relative, Michigan is devastated, and I would say there was a noticiable difference ever since George W. Bush's corination. All politics aside, there where a few days nobody knew who was going to be president, then 911, the 2 wars. My business has grown but it's different. In Michigan it's weeded out a lot of competition. I wonder if sales are up or is everyhting just cost more, thus higher sales, it the profit margin that counts.
     
  14. Pat Murphey

    Pat Murphey SPFG, Supreme Picture Framing God

    Yeah, Bush did it. In spite of the devastation in the economy from 911, we have just experienced the longest period of sustained growth in decades - with low unemployment. It's remarkable that there hasn't been a "normal cyclical" down turn sooner. It's also remarkable that we are moaning so loudly at a downturn in the rate of growth. What is sad is that the relentlessly negative "political" press will probably create a self-fulfilling result - an actual recession. If you want to run a business, you have to be prepared for business cycles or you will not last.

    As to the question - I haven't seen a downturn, yet, and closed corner and museum glass type sales are actually up.
     
  15. PaulSF

    PaulSF PFG, Picture Framing God

    Well, Pat, running up a massive deficit is terrible for the economy. It puts us in debt to foreign countries, such as China, and crowds out investment in the private sector. Forces interest rates up.

    There are plenty of other examples of how the Bush Admin's fiscal and economic policies have been disastrous for the long-term health of the economy.

    Oh, by the way -- all that sustained growth with low unemployment? That's from the Clinton Administration.
     
  16. JFeig

    JFeig SGF, Supreme Grumble Framer

  17. Whynot

    Whynot SGF, Supreme Grumble Framer


    I propose a large coallition of willing to keep it secret. Perhaps consumers won't notice and continue to buy just like they did before and pull us out of this recession-slow-economy. Or, better off, lie and smile and spend in hope self fulfilling profecies work both ways.

    Those D&G scared people are some ostriches.
     
  18. Paul N

    Paul N In Corner

    Let me see:

    Unemployment is up.
    Stock market is being beaten to death
    The "booming" economy is a house of cards
    Inflation is smiling at us with beady eyes
    Stagnation is having a party with Inflation and friends
    National debt and deficit are having the best years ever
    Foreclosures are at an all time high
    House prices never dropped so fast, ever
    People are hurting
    Retailers are bitching
    Oil is at $4 / gallon and rising (according to Jay Leno,. GWB said: "Let them then buy 1/2 a gallon....")

    But hey, Halliburton, the oil companies and other Bush cronies are celebrating, so something is positive right there!!

    Maybe we should let the Federal Reserve and other financial analysts judge the economy based on Pat Murphy's sales in Museum glass.

    Nah, it's not GWB's fault, after all he doesn't run the place.
     
  19. Whynot

    Whynot SGF, Supreme Grumble Framer

    Wait a minute, where is Erwin located? It looks as if he's from the same kibbutz with the Halliburtons, or specialized in framing "March madness", "Huge sales. All inventory must go" or "going out of business" sings :) :)

    Erwin, my February could also be the best ever in terms of orders, but it doesn't fill like it because we work much harder and keep much less from theat dollar we earned. Would you hook me with the Halliburtons?
     
  20. Richard Darling

    Richard Darling SGF, Supreme Grumble Framer

    Wait. Let me see if I understand what some are saying here:

    Higher taxes are good for the economy?
    The president created the deficit? I thought congress spent the $. Reagan and the Bush's have had mostly democrat-controlled congresses.
    Greater entitlement spending is good for the economy?
    Greater regulation of business is good for the economy?
    Socialistic ideology creates incentive for personal productivity?

    I don't know. Maybe I missed something here.
     
  21. Matoaka

    Matoaka MGF, Master Grumble Framer

    1. Yes, when you tax the rich at least as heavily as you tax the middle class, you end up with great infrastructure projects that employee Americans (key word) with well-paying jobs.
    2. Yes, Clinton left us a surplus; and congress has been Rep-controlled for 8 of the last 10 years.
    3. Yes, healthy children make better students, and better students make better CEO's and scientists and artists and congressmen, etc.
    4. Yes, deregulation doesn't lead to competition, just ask people who fly.
    5. Irrelevant, we live in a representational democracy... you represent one side, I represent another.;)
     
  22. JRB

    JRB PFG, Picture Framing God

    My sales are up so far this year. We had a good January and a really good February. I have always been COD with most of my vendors. My business has absolutely no debt, been that way for the last five years. I do not use credit cards, just debit cards, and I put as much as I can into savings.

    After all this, do I feel comfortable? No I do not, it's scary out there and it's really hard to guess what is going to happen. I have lost close to fifteen thousand on my stock portfolio, that took many years to build, but I am not selling.....yet.

    So far, business is good, but I am not bird dogging new airplanes, that is for sure.

    John
     
  23. Kirstie

    Kirstie PFG, Picture Framing God

    1. Not yet, last year's sales were great but February was flat. Adjusted for inflation, that means down, but then last year was such a good year, I'm not complaining. Tax season is always slower and that's coming up.
    2. We brought in a lot more length mouldings purchased on sale at the show. This will mean lower prices for the consumer. This is a good thing because I see people looking for bargains even more than usual.
    3. Scaling back Yellow Pages. Trying different ad venues. Offering corporate clients lower priced alternatives, which they are interested in.
    I have a list of projects and good intentions a mile long from the shows and meanwhile we are still unpacking moulding, still pricing samples, still setting up the POS in between helping customers. It all takes time.

    I sometimes feel that picture framing in the Bay Area is immune from recession. It has been in the past for us. But this time I am concerned. Although we don't have a lot of new housing and foreclosures near us, (no more land) the trickle down is being reported in the news. All those people who work in the financial industries are starting to get hit hard and loose jobs that serviced the real estate boom. As the ripples spread we will all feel this.

    I'd like to know what others are doing to be prepared and what are you offering, or doing differently? Can you see the woods for the trees?

    JRB, personal investments? I don't even think about it and I refuse to look at the stock market reports. What goes down comes up again. That last time I would think about selling anything would be now.
     
  24. Kirstie

    Kirstie PFG, Picture Framing God

    Do it at a big University like U.C. and you'll get rapped on the knuckles and threatened with removal of your vendor status. Many Universities don't take kindly to departmental solicitation. Be careful.

    The frats spent money with us sporadically, but picture framing is not high on their agenda.
     
  25. Jay H

    Jay H PFG, Picture Framing God

    Richard you're going to have to quit paying attention and quit trying to understand how economics works. Only then can you get moist at a political rally while some liar talks about "hope" and "change" and "Free this" and "free that". The reality is that there are socialists among us. They refuse to study history.

    Matoaka, you should learn who currently pays taxes. People in the top 50% of income pay over 95% of all taxes. So I agree with you, the rich deserve a much much larger tax break. Yet that money has to come from someplace. So how do you feel about forking over say…..$20,000 more in taxes for 08? Fortunately all the politicians know this and will never entertain such an idea.

    Tony I agree with you. The news does seem to make things out to be much worse than they are in general. I don’t really have a plan to battle this. I’m just not that sharp! I am plugging along with things as I had never heard the news. Is there an option? I guess its working because I’m going to end Jan/Feb up over 80% compared to last year to date.

    John, I agree with your “no debt” approach to business. I’m heading that way for my business and my personal affairs. I’m often shocked at how often we read about “just put it on a CC” or “just go borrow the money”. That’s pretty dangerous stuff. Two quarters ago my mutual funds had the biggest gains ever (since I’ve owned them). Last quarter the biggest loss ever. The total investment is still hovering around 12% but I too am keeping an eye on it. I cannot say that I’m all that scared though.
     
  26. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    I am not "rich" by any meaningful standards (outside our industry, anyway), but it burns me when we get the status warfare nonsense of paying a "fair share" of taxes

    I will tell you that I pay more in taxes than almost all of my employees earn in wages

    Help me undertand the fairness in that

    If so many of the liberal elite feel the tax codes need to "soak the rich", may I suggest that any of them is free to "add" that difference to the IRS. I am quite certain that all of these "tax the rich" elitists pay more to their tax attorneys to create tax shelters than most of us will make in a year

    Count me as one that thinks that almost the whole gang in Washington is horrible; Democrats as well as Republicans. We, in AZ just had a Congressman accused of conspiring on a land deal (he probably did). The local Dem's want him strung up and quartered, but were pretty silent when one of their's had a freezer full of cash.

    Change?

    Does that include Ted Kennedy (D)and Robert Byrd (D) and Stevens (R) of Alaska or Lindsay Graham (R) and so many on both sides. We can demonize and demagogue this till the cows come home.

    For my money (and it is my money), there aren't but a few that really represent "We, the people". To think that any of the current crop of candidates can accomplish 10% of what they contend is optimistically delusional
     
  27. JFeig

    JFeig SGF, Supreme Grumble Framer

    Well said Bob,

    Just as a side comment....


    When did most of the politicians actually "work for a living"?


    and I am not counting being an attorney or CEO of papa's business as "working for a living" ;)
     
  28. Maryann

    Maryann SGF, Supreme Grumble Framer


    I'll second that.

    I'm no expert on the constitution/bill of rights but somehow I don't believe that our founding fathers expected people to make a career of being in congress. Put me down as a strong supporter of term limits. No one should leave office richer than they went in, especially on the salary that congressman get.....and most of them do.

    Back on topic..
    Not all businesses close their doors in a rotten economy. We need to look around and see what we need to do to be one of the ones that succeeds. We're advertising more and it seems to be helping. We're going after segments of business that we turned our noses up at before. Numbers are up this year. Second best February in 10 years.
     
  29. Class

    Class CGF II, Certified Grumble Framer Level 2


    The way I look at it is that I am offering a service just like anybody else they deal with... food, lights, carpet, paper, ect. They have to go somewhere. Hopefully my knuckles will stay in tact, but thanks for the heads up.
     
  30. John Ranes II CPF GCF

    John Ranes II CPF GCF SGF, Supreme Grumble Framer

    Framing is a REAL job...

    Send me your resume, Kathy. We're hiring. :)

    John
     
  31. JackBingham CPF

    JackBingham CPF MGF, Master Grumble Framer

  32. Paul N

    Paul N In Corner

    Well Jack, the problem is, nobody wants to read such information.

    If Rush Bimbo says all is peachy, then it is peachy. Opium for the masses from the mouth of a crackhead.

    There was something similar on TV 2 days ago. A reporter asked people on the street, from well heeled gents to teenage girls, to guess what percentage of their clothing was Made in the US.

    Not even one guessed correctly and almost all clothing articles were 100% Not made in the US!

    But hey, why worry, let our kids pay the price for our follies.
     
  33. Bob Carter

    Bob Carter SPFG, Supreme Picture Framing God

    Now, see Paul, there you go again. Let's demonize the problem with a personality

    Did you watch SNL lampooning CNBC about favoring Obama over Hillary during their debates? Even Hillary pointed it out

    I think the public is fairly "disenchanted" with politicians, media etc

    Except, of course, when we agree with the agenda du jour

    For me, I tire of the constant telling me how bad it is. In Az, we have a higher than usual Foreclosure rate. All about sub-prime rates. And, if we can blame it on someone in D.C. even better. Truth is 98% of mortgages are sound

    But,it doesn't lead on the news
     
  34. Jerry Ervin

    Jerry Ervin PFG, Picture Framing God

    The housing foreclosures surely wouldn't have anything to do with people buying more than they can afford. Would it?

    If the deal sounds too good to be true, it is.

    When someone offers you a 500K McMansion for only $999 a month, you better read the fine print. By year 5 your payments may just be around 3k a month.

    Now how is that the guvment's fault?
     
  35. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

     
  36. Paul N

    Paul N In Corner

    I agree, but why is the guvmnet bailing them out??

    On the other hand, the guvmnet is also rushing to bail out companies and banks involved in this. Why is that OK as well, in a capitalist system?? Some of those very banks were aware the borrowers were not even qualified or earned enough money to receive a loan in the first place.

    And it's not the first time taxpayers got stuck with the bill and had to bail out large businesses (Saving & Loan, Chrysler, ad nasueum).

    That "too large to fail" concept shouldn't even be in the capitalist dictionary. If one thing I admire about conservatives, it was fiscal responsibility but that has been jettisoned as well the last few years.
     
  37. Paul N

    Paul N In Corner

    Jeff:

    I know Vermont Hardwoods is made in the US and would love to sell them, but they don't sell well here (in this small town) at all.

    I also use local gold leaf frame makers. I also always try to sell frames from local suppliers first (trying to support the local / state economy).

    If I had the choice, I'd always buy American, but like the post said, unfortunately almost everything is outsourced or made overseas these days.
     
  38. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    Those of us who have been paying attention are aware of the fact that Bush does not want to bail them out. So-called homeowner bailouts are the only free money they are getting right now.

    The financial industry has now lost over $180 BILLION. The new estimates top $600 BILLION in the near future. The stock market has lost about $5 TRILLION in market value.

    I'm sure that when it is all said and done the financial industry losses will top $1 TRILLION.

    As far as your stock portfolios go, you better look long and hard at what you invested in and what those investments hold in thier portfolio.

    The Tech market crash was child's play compared to the size of this one.

    Bush said "let the investors learn a lesson" and that's why there is no bailout.
     
  39. Jeff Rodier

    Jeff Rodier SPFG, Supreme Picture Framing God

    Paul,

    I would also love to buy/sell 100% US items as well. The reality is that price is an issue at
    all price points. I do buy from US suppliers so sme of my money stays here.

    Untill last year it had been 26 years since I bought an American car because, quite frankly, US automakers dumped a lot of #### on the market for years. Last year I honestly believed the product was as good or better for the vehichle type and price point.
     
  40. Rick Granick

    Rick Granick SPFG, Supreme Picture Framing God

    Go for it, Kathy! John's shop would be a great place to work, plus we'd love to have you as a midwesterner.
    :cool: Rick
     
  41. mayos

    mayos MGF, Master Grumble Framer

    I think we've been in a recession since the holiday season. Not that the GDP figures will prove me right, but I think mentally everyone has been made to feel very insecure with all the election politics and the housing financial problems. So EVERYONE acts like they've hit on tough times whether they have or not.

    A recession isn't necessarily all bad. It gives everyone a time to slow down a bit and maybe it will take a little of the demand away from gas, housing, etc. and the prices may become a little more in line.

    I'd love to sell all American made goods both in my clothing area and my framing area. But we have made it very tough for American companies to compete. As Americans we want to see employees have good health care, vacations, sick leave, 401Ks, etc. Plus we want clean water, air, and other environmental issues. BUT AS CONSUMERS WE WON'T PAY FOR THEM. Instead we want the cheap junk from China who could care less if anyone has clean air and water and cares even less if their workers are healthy or ever take a vacation.
     
  42. PaulSF

    PaulSF PFG, Picture Framing God

    I got a new pricing packet from LJ today, and the cover letter spoke of how the weakness of the American dollar and higher fuel prices are contributing to the higher prices we are paying for our materials. And yes, the weak dollar is a function of the deficit and other policies set by this current administration, whether certain people like to hear it or not. But I digress...

    So maybe this will prompt some of our suppliers to look at locating manufacturing back in the US. I also know that when I talk about a particular moulding being made in Italy, the consumer perception is "expensive." If I were to talk about that moulding being made in the USA, I think I would get a very positive response, even in this "socialist mecca."
     
  43. JRB

    JRB PFG, Picture Framing God

    I guess my question would be, what will happen when everyones wages world wide are about the same?

    Our factories are producing just about nothing now, we sent it all to China. Now China is farming it out to Vietnam, because Chinese wages are getting too high. This is happening all over the world. Out dollar is falling, soon it will be cheaper to make things here in the U.S. Grumman picked up a huge air force contract, they are gong to start assembling Airbus planes in our south east. It is rapidly becoming clear that American made mouldings will soon be more prevalent.

    I realize it'll be a long time for wages worldwide to come in line with each other, it seems to me though, we are headed in that direction.

    What then, if Mexicans can make the same money in Mexico, will they want to come here? Who will pick our crops, clean our houses, cook our food, keep our hotels and restaurants running, re-roof our houses? What about health care? If Filipino's can make the same money in the Philippines, why would they come here to nurse us back to health?

    What else would be in store for us with a stable world economy?

    The world is changing and I am afraid we are going to have to learn to adapt.

    John
     
  44. PaulSF

    PaulSF PFG, Picture Framing God

    Ex-frame shop owners?
     
  45. AWG

    AWG SGF, Supreme Grumble Framer

    Not looking to start a discussion on the economy, monetary policy or anything else -- but the article made me think -- How are YOU handling this in your business?


    ....so much for an intelligent question about what you're doing in your business....
     
  46. Kirstie

    Kirstie PFG, Picture Framing God

     
  47. Kirstie

    Kirstie PFG, Picture Framing God

    LOL!
     
  48. JRB

    JRB PFG, Picture Framing God

    I started addressing this five years ago, see my post on page three of this thread.

    John
     
  49. Kirstie

    Kirstie PFG, Picture Framing God

    We haven't had this arrive yet. So Paul, what percentage has everything gone up? I know they don't tell you, but have you figured it out for me yet? It would save me some time.;)
     
  50. Matoaka

    Matoaka MGF, Master Grumble Framer

    Gryphon's new price book shows some price decreases as much as 40%. Nice!
     
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