Wednesday, February 25, 2009

The thing with the economy

Both my husband and I have full time jobs and then we have on the side. Bill has survived one round of layoffs at the company he works for and I am hearing through the union that negotiations with the university I work at are not going well and that furloughs (up to 23 days), pay cuts and freezes, and reduced benefits are potentially on the horizon due to state budget shortfalls. So even though we are both employed, we know that things could change and our economic stability could be in jeopardy.

Last year we made some investments into setting up headquarters in our garage and I purchased the tools for silk screening t-shirts. Silk screening will drastically reduce the costs I was incurring with embroidery and I now have everything I need (besides time and energy) to run This year, I was planning to attend some larger triathlons including Wildflower in California. I looked at the costs and I would have to invest at least an additional $5,000 in expenses and inventory to prepare for that large of a race. Ideally, I would spend around $8,000 to really get the inventory built up.

I have had a positive response to the new products I recently added so I am fairly confident I would recover all costs and profit by attending these larger races. But there is a risk that I might not make enough to cover costs or that I wouldn't make enough to make it worth my time. I would have to take off 3 days from work to travel to CA, rent a trailer, pay for gas and camping, pay vendor fees $$$ and then work three 12+ hour days, pack up and drive 14 hours to immediately go back to work at my full time job. A lot of stress comes with traveling to these events and I spend hours upon hours preparing the inventory and packing everything up.

The biggest reason to go would be to market and yes, I have heard that marketing in a slow economy brings bigger rewards. But! I am realistic and I don't know that I have the time and resources to grow this year.

Bottom line: I am lacking the extreme motivation needed to make the larger triathlons happen this year. I don't want to charge thousands of dollars on my AmEx card when one of us could lose our jobs, even if I could make the money back in May, my stomach turns just thinking about charging that much. So, I'm going to go small this year and do the local races that I have been doing and keep the risk to a minimum and my credit card balance closer to a number I can live with.

Staying small and taking less risk feels like the right path for me this year and Bill agrees with me. I would love to take to the next level, but I have to be sure that my ambition isn't jeopardizing our financial future and stressing us out. I want this to be a rewarding project and not something that makes me miserable. It was a tough decision to make and I am sure I will have doubts about it, I don't like to shy away from hard work, but I think backing down will be better for me in the long run. A bitter pill to swallow for but patience! I have been learning about patience these past few years and this is perhaps another lesson in patience.


D said... stays a hobby that can have financial reward. That's not so bad, right? :)

Ariel said...

I think your choices are prudent. Honestly, this might not be a great year to try out Wildflower as a sales venue. None of the races are sold out yet. There will be fewer people there and everyone will probably be spending less at the expo. I think a lot of people will be racing smaller, less-expensive races closer to home this year. There's always next year! (and the next...)

Top Dog said...

For what it's worth, for my small business we've cut way back on expenses as well. And yes, marketing in a down economy can bring great rewards, but if it's not a price your comfortable living with then it's not worth it. I'm struggling with dropping one of our bigger tradeshows of the year b/c it's just so brutally expensive when you add in traveling, inventory, etc as you mentioned and I'm just not wholly convinced it will be worth it this year.

The Original SunnyD said...

I totally understand and I hear you. It is going to be sad not to have you at the race with me. But, we can have lots of adventures closer to home... Warmest, Sunny

Maijaleena said...

It is definitely scary for a lot of people to plan for big races so far in advance with the economy so shaky. It is nice when there are lots of good races close by.