Thursday, March 17, 2011

A Penny Saved...Smart Guys Chapter One.

Like it's news to any of us, I say some of those old business adages were lies.  One of the worst is "a penny saved is a penny earned".  The only thing that comes out of that saying is a bunch of cheap-ass bottom feeders racing to new lows in product quality and service.  A pithy proverb that stinks less is "value the relationships in your business".  It sounds like a lot of hot air.  But it bears remembering, and it is most important when you are reminded that "value" isn't just about warm fuzzy feelings in your heart. 

Value is about money.

Last week I got so tired of hearing Mark complain about his computer that I actually went over and took a look at it.  You see if I could, like, fix it or something.  And go figure: Mark wasn't just bellyaching in order to torture me.  The End Was Near.  Old computers nearing The End do some pretty tell-tale things.  This patient presented with all of the fateful symptoms.

Computers are cheap these days.  You can get a good desktop machine for a few hundred bucks, less if you take the time to assemble it yourself.  But data systems infrastructure is one of those business areas in which I truly believe that, quite often, a penny saved is a dollar in the toilet.  I called on Drew.  Drew owns an IT support business called basupport.  Yes.  basupport.  With a small "b". 

Drew epitomizes my Smart Guy theory: ten minutes with a Smart Guy are worth more than a week with a dullard.  You know the other (more valid) old saying "price, quality, and can choose any two of the three"?  Well Drew is fast, and Drew is competent.  You can draw your own conclusions from there.  But as much as his hourly rate is a little terrifying, Drew fixes most problems so quickly and so seamlessly that his work winds up being less expensive than other folks that are...well...less expensive. 

Next up: Smart Guys part Two...which questions to ask.

Sunday, March 6, 2011

The Price of Doing Business

Ain't That Some Shit?
What we pay at Kaladi Coffee
(minus differential, shipping, and a few other charges...)

There's an odd perspective you need to keep as a business owner.  The vast majority of your countrymen here in the U.S. of A. think you're at the top of the heap: business ownership is one of the main "someday I will..." statements for many people.  And with good cause.  Owning your business, as far as I'm concerned, is truly the way to go.

But when supply prices follow the chart above, well, there ain't anyone or anything to absorb the blow except the calloused hide of the principals.  Like most small businesses, we run a pretty tight ship at Kaladi: we don't have huge reserves of cash, and can't really sell out of any particularly liquid positions.  So the current price fiasco has left us with two options...and we took both.  One, we raised the retail and wholesale prices we charge to partially offset higher COGS and inbound shipping charges (mostly fuel surcharges on trucking fees), and (now the ugly part), Mark and I have (with dark humor and puckered parts) accepted the fact that we're simply going to make significantly less money this year than we did last year. 

It's hot dogs for dinner tonight.  And wennie-water soup tomorrow.

I regret nothing about owning my own business (yet).  I'm glad that we're not leveraged, and that we don't have any long-term debt to pay down.  I'm glad that our bills are manageable.  I'm glad that we've paid our bills in the past and that we have a credit advantage over many other coffee buyers.  And while there may not be much gravy on my plate this year, I'm glad that there will at least be grits.

As Nina Simone so wisely sang: "it also be's that way sometimes".