Giving Credit
Kip Ward
Posted: 09.01.2009 / 3:22 PM PDT
Today is September, and with only one more big weekend to go and I can’t wait for it to be over.
That is the odd thing about summer in a tourist economy; it is kind of like the Christmas and Thanksgiving Holidays. You look forward to them both coming and going.
But this year I am ready for a break. I want my town back. I want the bumper-to-bumper traffic gone. The bitchy, messy, and demanding customers; I want them gone too. And all of that summer money? Well I guess here is the rub. It will be gone as well; this year maybe sooner rather than later.
I haven’t a clue of how small business did across the nation, but I can tell you how business was for most shopkeepers in Lincoln City. It was poor. Not terrible mind you but poor. That is significant because for a seasonal small business a run of poor business can be terrible; even fatal.
And here is why. Most small business on the beach start out under capitalized. Most failures launch with nothing but a good recipe for clam chowder, a hand full of credit cards, and the proceeds from their moving sale when they left the valley for their dream lives.
But nightmares are dreams too and as the bitter wet winter winds blow in these naïve dreamers are blown away. Some back to the valley from whence they came and others to a new future of dealing cards at the casino.
The soldiers that hang in there survive by the grace of vendor’s credit, grit, and wile. And although the grit and wile are still in abundance, the vendor’s credit is drying up.
Normally small businesses lose money or if they are lucky break-even during the nine months of winter. Their cash on delivery accounts turn into thirty, then sixty, and finally ninety days at the end of winter. A good summer will erase those accounts and put cash back in the bank, ready to go to war with the new winter that lies just ahead.
But last year that didn’t happen. Recessions have a way of doing that. Many small businesses couldn’t make it to summer’s gate, and the ones that did arrived hobbled. Now add in a weak summer and you get the picture. I spoke to one of our major vendors yesterday and he told me that at the end of this August many businesses were sixty days out on their inventory invoices. This means that they will have to try to pay July and August’s receipts with September’s income. Now these folks are on COD but it is no longer their choice. The writing is clearly on the wall.
For all of our sakes I hope the recession is on the wane. But for a lot or our small businesses I’m afraid it may be already too late.
