I've spent the majority of January catching up from December, getting really really organized, and having a lot of talks with myself. I made the long overdue decision in December to quit my job and focus on Mama full-time. I have no regrets, but I have had some reservations. Granted, I am not like the majority of these unfortunate people who are getting laid off left and right. But I am now completely responsible for my financial situation. Freedom has a price, but it's a risk I'm willing to take.
I do have some background in an economic crisis of my own personal kind. When I started out a little over 6 years ago, I did the credit card thing (different time, different place, different product line) and I messed up royally. It cost me thousands of dollars in credit card interest and took me three years and a good deal of ingenuity, but I made it out without defaulting on a single credit card or declaring bankruptcy. If you're thinking "she only did what a responsible person should so she should quit congratulating herself," you're absolutely right, but look at the mess around us due to people that have bailed on their debts. So I guess what I should say is that I'm proud that I didn't contribute to the problem. I choose to look at it as having earned my masters in business from the School of Life. I learned a lot, and I'm ready to go round 2. It's pretty scary, but I feel so much more prepared, and ready to face the challenges. And I feel like my excitement and passion will go a long way in helping me get there.
My business is such a microcosm right now, that I have nowhere to go but up. And I'm optimistically thinking that I will be able to grow my business, even in these uncertain times. Maybe not as fast as I would like, but upwards nonetheless. The guy from Clif Bar started his business during a recession. Granted it wasn't this recession, and he lived in a garage and rode his bike to work. Or something like that. Actually, maybe it was Method. Whatever.
My point is, what this financial crisis has done is forced me to look at how I grow my business, which could really do me a favor in the long run. Because there aren't funds readily available to borrow, I will be forced to sell products before I can buy new ingredients, and I will have to use existing capital to grow. This will take longer, but I'm in it for the long haul, which I have to keep reminding myself. This will also help me weed out what is working and what isn't as I go, versus becoming heavily invested in some idea or product that turns out to be a big flop. My conclusion about using credit cards to run your business is this: racking up credit card debt might be an option if you're the type of business that stands to attract a big investor, or better yet, stands to be bought straight out for a huge sum of money. Then that 6 digit credit card balance might worth the risk - I didn't owe that much, but I've read about people who have. But I want to keep my business small and privately owned. I have no desire for human resources or overseas outsourcing to be items in my business plan. I know it takes money to make money, but unless Kiehl's comes knocking (which I'm not counting on), it's really not a good idea for me, or businesses comparable to mine, to borrow big. Like I said, I learned that the hard way.
So rather than writing a 5 year business plan, because frankly I have no idea what this year will bring, I'm writing a 1 year action plan. My goal is to take this year to figure out what is working and what is not, on a very small scale. I probably won't get to half of the things on my list, but I hope to be able to prioritize the ones that keep me moving forward and upward. In regards to borrowing, I am looking at applying for microloans as a means to help cover myself if I were to have the opportunity grow more quickly than I could afford. For example if I got a big order that I had to fill, and needed some capital to buy the ingredients or get a bigger piece of equipment, etc. But I fully plan to let the means dictate the end. Or is it the ends that dictate the means? I guess it's whichever one that doesn't involve using my credit cards. And it's going to mean working my ass off.
Another thing our stressed economy has done is helped me really start to pay attention to how I spend my money. On the rare occasion that I treat myself to a latte, I now make a point to steer clear of The Corporate Giant and head over to my neighborhood coffee shop. I'm not particularly impressed with how a lot of big business are running their businesses these days, and while I know they make a bigger impact on our economy and create a lot of jobs, I feel like it's my responsibility to help support the little guys. Because they're also creating jobs and paying taxes, just on a much smaller scale. And because I'm the littlest of little guys. I also buy as much local food as possible. Not only does it taste better and fresher, but I have done a ton of reading on farming and food distribution, and have learned that a big part of the world food crisis is a result of huge corporate farms who grow single crops - using pesticides which ruin the land and have other major consequences. Their existence has put many community farmers out of business, whereas increasing the number of community farms, who grow multiple and varied crops and serve smaller communities, could actually solve the food crisis. This is greatly simplifying a complex topic and I don't want to stray too far from my original point. Which is that as a result, I make it a point to spend as many of my grocery dollars as possible at local farmers markets. As well as avidly supporting other local food makers, crafters and artisans.
So, to sum up my long winded post, perhaps some good will come out of this big mess. Maybe it will create a new generation of more responsible consumers, small business owners and (gasp) corporations. My hope is that those of us who are trying to make a go of it on our own will be able to weather the storm and keep moving forward. And of course I really hope that jobs will be created for the staggering number of people who have lost theirs. And if not, maybe they'll join the growing ranks of small business owners and start one of their own. Yes we can.
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