Quote:
Originally Posted by Sliver
I'm a small-business owner in Calgary so I'm going to chime in here.
The relationship you have with your business is unique. It's an inanimate object, but it also kind of has a life of its own. It's not like your child or anything - I don't love my business - but I feel kind of paternal toward it. It's a different relationship than one you'd have with a company at which you're employed. If it's not doing well, I feel completely responsible and like I'm failing it.
I feel really bad for this dude. I'm sure it was series of consecutive bad months with expenses outweighing income. Alternating feelings of optimism and dread. Sleepless nights. Feeling like a failure. The blame game. Feeling mad. Having a great week and feeling hopeful. Then two bad weeks. Etc. He can't just walk away and start a new job. Winding down a business is a job unto itself. Basically, it's rotten.
The problem for Escoba Bistro, however, is this:
Escalating costs are just a fact of owning a business, but losing 45% of your business would be lethal for most small businesses. And that needs to be blamed on the economy and not anything else.
COSTS IN BUSINESS ONLY GO UP. If revenue doesn't grow, you're toast. He's going to basically have his same fixed costs from when he was bringing in 45% more revenue. I doubt he was running huge enough margins to cover a 45% drop in revenue, so these other changes are irrelevant. I know if you took away 45% of my revenue I'd be out of business in a matter of months.
The only thing you can count on in business - or life, for that matter - is change. I've been at my racket for over 10 years. In that time my rent has doubled. Taxes have gone up. I have to jump through more hoops and red tape with the City for a couple of different permits I need. I buy my raw materials in US dollars and they've all gone up. The economy is crap and I can't raise my prices. These are just realities. My margins are down. Most businesses in Calgary are running lower margins.
If you had thin margins to begin with, you will not survive. That doesn't mean our municipal government doesn't have a city to run still. That doesn't mean your landlord doesn't still need to be in the black. That doesn't mean we shouldn't build bike lanes.
The problem here is a 45% loss in business. I believe that alone - independent of all other factors - would have finished him off.
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I entirely agree with you and obviously the 45% drop in revenue is the main issue. That said, increased taxes on top of the economic reality means that some business who could've otherwise weathered the storm won't be able to. That's the concern I have with the policies of the governments of the day. Small business owners are dealing with enough at this point just trying to keep the wolf away from the door, but then you throw in these costs on top and its not possible.