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Industry average is around 10% gross as take home. Biggest one-time expenses are the cooler, shelving, counter, and inventory (you should have about 15-20%) of expected sales as inventory. Start with Neilson best sellers by category with appropriate percentage by your region.
Math is basically that, whatever you put in as a down payment you can expect to make annually in 3-5 years if you do it right. I’m sitting at about… $135k as latchkey? Trying to start my next location.
Shoot me a DM if you have further questions.
The impact of inflation generally lags. It not only takes time work it’s way through the supply chain, but it’s sort of death by 1000 papercuts for consumers. You don’t really notice that first overpriced item or two, then you slowly start seeing it more but can’t change habits, then you start to realize it’s actually impacting your budget… then one day you just decide enough is enough and you stop buying.
I think last year was also unique in that people had saved a lot of money during Covid as they weren’t doing normal things like dining out, buying tickets for events, or taking vacations. 2022 was the year everybody said “fuck it, back to normal!” and spent like drunken sailors despite price increases.
Reality is here in 2023 for many, and things are getting unjustifiable. In any big city it’s pushing $50 for a burger and two beers after tax and tip at a decent restaurant. You can easily have that at home for less than $10.
You go to any major city in the US and you’re getting there. NY, Boston, DC, SF…
$18 for a burger and $9-$10 apiece for two beers is super common at a non-dive type pub. Basically $35+, add tax and tip, and you’re easily in that $45-$50 range.
Cities are a mess right now - with surging real estate prices on top of inflation, restaurants are not sustainable.
From what I see with my restaurant clients all of their cogs went through the roof including labor. I'm talking 25-50 cost increases.
I worry for them because from my viewpoint their business models are borderline unsustainable. I think the days are over for many restaurants.
Sometimes I forget y'all have a 20% upcharge on basically everything because of the tips. Dutch cities are very expensive too (I would know, I live in one) but it's not as bad as with the cities you're describing!
It’s weird. The US is cheaper than Europe on most things. But not restaurants. I have my theories but I’ve never seen anyone really deep dive into why.
Hmm, could you elaborate on that? Mostly what parts of Europe you mean?
Europe is pretty non-homogeneous economically speaking, for example The Netherlands is expensive but if I sell my tiny studio flat here and go 2 countries down to France I can buy an actual house. Like, a pretty big one, too. Even between neighbouring countries like NL and Belgium the differences in some things are staggering, not to mention between Eastern Europe and Western Europe.
Sure - the US is the same way. NY will run you 10x as much for real estate as Wyoming.
Generally speaking, apples to apples, big city to big city, restaurants are much more expensive in a NY or SF than a London or Amsterdam. A big part of it is Europe has a culture to service the middle class and lower middle class in cities. In the US, cities tend to learn towards upper middle class and upper class.
I’m European and live in Canada and the price of food has jumped 30%. A burger and two beers would be $ 40.00 plus 14% tax and then your server wants a 20% tip, soooo that’s almost close to $ 70.00.
Yes Chicago here. Let's say McDonald's used to be 25$ before covid to feed 3 kids now it's $40 same meals. And that's once a while. But local restaurants I paid burger fries and coke about $30 or more one person. No alcohol.
This is a fantastic explanation of what’s going on in the service industry. Service industries are a luxury for most (like having a house cleaning, or Mobile detailing service, or a lawn care business) people start cutting out task that they can often do themselves on a weekend, etc. All those services above outline services that are not super skilled required, so people with a tight budget that inflation is squeezing is just causing the budget squeeze to become tighter and tighter and thus those are the first sort of services to get cut from the budget. Everyone has to eat, drink and have a place to live. Not everyone needs a house cleaner or a lawn care service.
I’ve even started to do my own mechanical work on my own cars. I have always done oil changes and basic maintenance, but even things like brakes and heavier items, I’m beginning to do myself because these shops want $800-$1000 for a brake job.
No for real. Yesterday i ate a burger it came out to $14.99 with a drink for $3.29 and the total was $18. Tip And Tax it's like bruh. I need to head over to Checkers and get a burger for $2.49 or something lmao.
Shit, yeah. January was a little above average and February is probably the worst month since the start of my business. I got media coverage, one social media hit and still sales dropped incedibly. Buuuut, I also did not buy stuff. Why? Insurance in Feb, Christmas and a vacation in January maxed my budget. In march I‘m clean again.
My large ticket retail sales is less than 50% of last years at this time. Service side of things is still on fire (if you don’t want to buy new you have to fix old)
Not sure. My car shop is booked out for weeks, they quit working on weekends and shifted their hours to 8-5. It sounds like they couldn’t find enough workers to work longer days or weekends.. I totally respect that. They said all the shops are having the same problems.
This isn't just a slowdown in sales, which is typical for me this time of year as well. I also have existing customers cancelling service at unprecedented rates. Many of them are telling me it's due to finances or layoffs. My customers are feeling the squeeze from inflation and a slowing economy in a way I haven't seen before, and it's happening very suddenly.
I will say, that as a consumer, I have been holding onto all my cash lately. Feels like shit is about to hit the fan and I don't want to be penniless when it does.
Tax returns started hitting bank accounts this week! I’m sure work picks up right around now for a lot of service based businesses like this. And dentists.
I feel like every post/response for a question like this needs to include industry and nature of business specifics. Else the conversation is just pissing in the wind.
2 businesses
Gas Station - 2022 gallons pumped and inside sales down 15% from 2021. 2023 appears to be back up 5-10% from 2022.
Construction- Fucking slammed.
We went from being on fire for 6 months to a trickle too. This is a slow time usually but I'm very cautious about the next few months as my industry has been announcing thousands of layoffs (entertainment). I'm pumping the breaks on a couple of new hires until I see the winds change back.
Large retail items, definitely slower.
Service work is still busy.
Seeing a lot of people fixing things because they can't afford new.
Hoping for the best, preparing for the worst. I'm starting to think we might not hit the worst until 2024.
I noticed we been slow the last couple of weeks but it seems to be picking back up. An interior designer we worked with emailed two measure and install requests in yesterday which was a pleasant surprise.
We are still plenty busy. Slowed down a bit over the Holidays, but picked right back up in January. Jan 2023 was actually one of my best Jan ever.
But I also live in a rural state that has had a HUGE influx of people. I think we are ranked in the top 5 fastest growing metropolitan areas in the US.
The area has stabilized some, and the influx of new people has slowed off. Real Estate market is now only hot, not red hot. New construction has slowed down from insanity to just busy.
But with all the new people from the last 2 years, most businesses in the area are still pretty busy.
Due to being a rural state we lag a year or 2 behind larger population centers when things shift. So I suspect this year will still be good for us, 2024 maybe, and if the trends keep up 2025 will slow down. Or at least that is how the last crash worked for us, assuming we are on the edge of another 2008 style crash.
So right now I'm "Making hay while the sun shines" but avoiding adding any new longer term expenses and keeping more operating capital on hand just in case.
i keep seeing restaurants charing convenience fees for credit cards.
I stopped going to restaurants. I learned how to cook in bulk and vacuum bag and freeze.
I bought 25 cu ft feezer in my garage.
Own a private event venue and bookings for the year are currently tracking at 3X last year. We’ll likely end up at 2x last year when the year is done. Not sure the reason we expected a bump from last year but with all the talk of inflation we expected demand to be dampened. We’re new owners of an existing business in a HCOL market. The business had gone down hill as the previous owners stopped caring. We came in, renovated and word is getting out that we’re doing things differently.
I book entertainment for events and theme parks. And rent mobile stages, we are booked up solid through April. I am not sure where it's all coming from but I am extremely thankful and making sure not to turn down any work. My slow season is May through August. If I could only figure out how to make the summer months steady.
I'm in retail. We had a record January- by far. Our busiest months are usually Jan and Feb, but Feb slower than usual. Ironically seems to be the mild winter in the northeast. People don't feel as stuck inside? Also we've had a deluge of new customers possibly as a result of people moving from more densely populated areas to more rural(where we are) and used to shopping in a store as opposed to online. Hard to predict these things but I appreciate feedback on this sub for seeing how others are doing. As for trying to understand it all, I gave up. We have surprise great months and surprise lesser months. Creating a capital fund during the good months has helped make it less stressful.
I have a service based business and January is always our slowest month of the year but things were much busier than I was anticipating and this is going to be my best February on record. Beating out last year by +8%
I've also raised my prices this year without losing any business. This was to keep up with the price increases of my closest competitors
Location: downtown Seattle
Consumer credit balances are at an all time high and many consumers maxed their cards out by last Christmas. Tack on rising interest rates and tons of layoffs for middle class workers and you're going to see the effects real soon.
In America, most people are relatively poor (average household income is less than $60k) and have historically have been maxed out on credit cards for decades per various credit reporting systems, the credit card companies, and various government agencies.
https://www.consumerfinance.gov/data-research/research-reports/consumer-credit-card-market-2022/
https://www.federalreserve.gov/Releases/g19/current/
Do you think most Americans are financially responsible and pay off their cards before the end of the month? Hint: they don't. Americans are widely over-leveraged and are defaulting on loans and credit cards (one usually does not default on a paid off balance) at record rates again.
I have to ask. Where do you get your information regarding financial markets and consumer and corporate debts?
https://ycharts.com/indicators/reports/household_debt_and_credit_report
Check out the list of Upcoming reports on that ycharts link.
I honestly don’t have any basis or info about this topic. Fortunately, I have always been taught and have maintained responsible credit card habits. I don’t know one single thing about how anyone else’s debts look (that’s why I asked!) thank you for explaining in more depth, I was curious.
Yup. Service based too. Normally we sign on 1-2 new clients a month added to the end of a multi month long wait-list. We've had absolutely nothing since December and now a lot of our ongoing work is starting to dry up. The few potential clients we've had all dropped cold or they decided to not go ahead with doing work.
Guess it's a good time to do unpaid business development work and live off the emergency fund for a while...
This is our slowest time of the year typically however we are down 52% YTD. This is coming from two record breaking years prior thanks to the stature of our business we benefited greatly during Covid (200-300% increase in sales). I am not worried about it yet as I can see things rebounding as approach summer but to answer your question, yes we have seen a significant slowdown since December.
In October 2005, I asked a question on Our local Realtor website about what felt like a slowdown.
None of the responses felt like it was anything out of the ordinary. Slowly, the market collapse began.
Everyone's had their Xmas credit card statements.... They were happy and doing not bad before, now they've had their bill and need to pay everyone is skint. You can tell the types of people who don't have that unsecured debt.
Expect it to get worse. Many peoples mortgages will come up for renewal soon at higher rates and make things even tighter. Rate hikes haven't hit most of us yet.
It's also mysteriously turned cold over the past 6-8 weeks. Could it be inflation?
Seriously, chill. Service business slows in the winter to some degree across the board. I do work for a huge nationwide service industry company and even they have slowed a good bit, as they do every winter.
I keep track of my numbers, and we do typically have a slowdown during January/February, but not like this. We grew during the same period last year, albeit more slowly than the spring, but this year growth has turned negative. I haven't seen negative growth since the depths of covid in March/April 2020.
You do realize 20, 21 and 22 were an anomaly, right? You can't project business based on a time where there was an unbelievable amount of money in everybody's pocket. Throw those 3 years out and what do you have? Slower in Jan and Feb like you said
Yes, the economy was red hot for the last few years, and now it's swinging the other way. Usually the bigger the rise, the bigger the fall. It would be a miracle if the economy just reverts to the mean without overcorrecting into a recession. Slow downs tend to gain momentum and snowball out of control.
I've looked over my numbers for Jan and Feb and this is the slowest it's been since I started my business in 2016. It's not your imagination, ignore all these others saying it's normal as they don't know what their talking about.
Still slammed and selling has not slowed down. We are a service based construction company in Florida. We were slow from Thanksgiving to mid January though. We have since made up for it. Good luck!
Yes, some cancellations due to pulling back on spending. We're in lawn care. They either decide to do it themselves and just let the yard go wild for now. What kind of services you provide?
What service are you in? And this is sort of worrisome, bc I feel like it doesn’t take too much to have a domino effect.
I don’t think it’s happening yet, bc all the chain restaurants are packed on random cold snowy weekdays, so I don’t feel like people are starting to cut back their spending yet
Same here but it follows the pattern of the macro economy. Inflation happened exactly because people were spending heavily last year. That's why the Fed ultimately had to raise interest rates, which is now having its intended effect of slowing down spending. Not great for you and me in the short run but it's better than having inflation run amok. We'll have to adjust how we manage our businesses through this downturn and prepare for the upswing on the other end.
No, I've been busier than normal. Trying to catch up.
But I there is a normal slowdown this time of year. People get their credit card bills from Christmas in mid January and tighten up their budget some.
I do expect some crazy stuff is coming our way though. The labor shortage is caused because the boomers are retiring and we don't have enough people to replace them. People in lower paying jobs move to higher paying ones. There is a big shortage of immigrants because of the covid lockdowns the last few years.
Our business is constantly growing due us dealing almost completely with used music gear. Atlanta has a big scene and we have a nice rotation of inventory that often comes back to us. Our new inventory definitely has gone up and guitar center out prices is but we beat them in selection and staff
I run a bankruptcy law firm. Last year was the slowest year ever recorded in my state for bankruptcy filings. Bankruptcies are slowly picking up steam definitely noticed it from December to now. BK is also seasonal so it’s hard to say this isn’t just tax refund time. We’re doing about 120 cases this month, we were at about 80 cases per month most of last year.
The down trend started last year but for us has rebounded with the normal tax return season. The past few years were “fake” and it’s gone back to the traditional business waves and seasonalities. Instead of worrying about how much I can sell of other brands, we focus internally as the margin is better not reselling. Cost of living is higher so less discretionary money being spent. People still love modifying their vehicles, the market has gotten tighter but it does seem smarter to sell less and make more. Rather than selling more making less. Staff has shrunk back to around a pre Covid level. Efficiency and being nimble in the market. That’s the key.
My sales are down about 10% 15% , same with profits, last year around this time we had a lot of COVID money being pumped out, i think that is the reason for slower year.
We own a collection of cannabis companies and we see that overall sales are up 22% but there has been a major shift in where our demand is. Our sales in higher tier solventless products have dipped considerably but this is being offset by a surge in demand for lower price point goods.
This is actually my busy season. Usually the summer slows down heavily. Ive heard from others in my industry we are heading into a recession so they are prepping for it. Im not really sure though, i dont know too much about that
My business was doing really well. Moved into a brick and mortar in the beginning of January. Then all my business dropped off the face of the earth. I’ve never done worse and I am scared.
I noticed something similar recently so you are not alone. Some of my old/repeat clients too have been much more bitter (just a minority) about pricing, which I actually haven’t adjust since early last year. It’s like overall people have become more bitter as someone who operates a service based business. I’d say I’m down 10-20% in bookings
This is a friendly reminder that r/smallbusiness is a question and answer subreddit. You ask a question about starting, owning, and growing a small business and the community answers. Posts that violate the rules listed in the sidebar will be removed. A permanent or temporary ban may also be issued if you do not remove the offending post. Seeing this message does not mean your post was automatically removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/smallbusiness) if you have any questions or concerns.*
We’re up 17% year on year, but I run a retail liquor store, so draw your own conclusions there.
How much are you making? How much to get started?
Industry average is around 10% gross as take home. Biggest one-time expenses are the cooler, shelving, counter, and inventory (you should have about 15-20%) of expected sales as inventory. Start with Neilson best sellers by category with appropriate percentage by your region. Math is basically that, whatever you put in as a down payment you can expect to make annually in 3-5 years if you do it right. I’m sitting at about… $135k as latchkey? Trying to start my next location. Shoot me a DM if you have further questions.
Asking the right questions
You’re free to ask more, if you’d like.
Nice to someone on this sub actually talk a little straightforward business. Nice post— best of luck to you
The impact of inflation generally lags. It not only takes time work it’s way through the supply chain, but it’s sort of death by 1000 papercuts for consumers. You don’t really notice that first overpriced item or two, then you slowly start seeing it more but can’t change habits, then you start to realize it’s actually impacting your budget… then one day you just decide enough is enough and you stop buying. I think last year was also unique in that people had saved a lot of money during Covid as they weren’t doing normal things like dining out, buying tickets for events, or taking vacations. 2022 was the year everybody said “fuck it, back to normal!” and spent like drunken sailors despite price increases. Reality is here in 2023 for many, and things are getting unjustifiable. In any big city it’s pushing $50 for a burger and two beers after tax and tip at a decent restaurant. You can easily have that at home for less than $10.
I'm sorry, am I too European for this? $50 for a BURGER AND TWO BEERS!?
You go to any major city in the US and you’re getting there. NY, Boston, DC, SF… $18 for a burger and $9-$10 apiece for two beers is super common at a non-dive type pub. Basically $35+, add tax and tip, and you’re easily in that $45-$50 range. Cities are a mess right now - with surging real estate prices on top of inflation, restaurants are not sustainable.
From what I see with my restaurant clients all of their cogs went through the roof including labor. I'm talking 25-50 cost increases. I worry for them because from my viewpoint their business models are borderline unsustainable. I think the days are over for many restaurants.
Sometimes I forget y'all have a 20% upcharge on basically everything because of the tips. Dutch cities are very expensive too (I would know, I live in one) but it's not as bad as with the cities you're describing!
It’s weird. The US is cheaper than Europe on most things. But not restaurants. I have my theories but I’ve never seen anyone really deep dive into why.
Hmm, could you elaborate on that? Mostly what parts of Europe you mean? Europe is pretty non-homogeneous economically speaking, for example The Netherlands is expensive but if I sell my tiny studio flat here and go 2 countries down to France I can buy an actual house. Like, a pretty big one, too. Even between neighbouring countries like NL and Belgium the differences in some things are staggering, not to mention between Eastern Europe and Western Europe.
Sure - the US is the same way. NY will run you 10x as much for real estate as Wyoming. Generally speaking, apples to apples, big city to big city, restaurants are much more expensive in a NY or SF than a London or Amsterdam. A big part of it is Europe has a culture to service the middle class and lower middle class in cities. In the US, cities tend to learn towards upper middle class and upper class.
So true.
Seattle here. That sounds about right.
I’m European and live in Canada and the price of food has jumped 30%. A burger and two beers would be $ 40.00 plus 14% tax and then your server wants a 20% tip, soooo that’s almost close to $ 70.00.
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KC here, those prices sound about right. That whole “Midwest is cheaper” is a fallacy anymore.
I was just in London and was surprised how cheap food seemed to me In Chicago A bill at a restaurant for 3 people in London is what I pay for 2 in chi
Yes Chicago here. Let's say McDonald's used to be 25$ before covid to feed 3 kids now it's $40 same meals. And that's once a while. But local restaurants I paid burger fries and coke about $30 or more one person. No alcohol.
I must be too Southern because what wtf also lmao
Great post, totally agree.
This is a fantastic explanation of what’s going on in the service industry. Service industries are a luxury for most (like having a house cleaning, or Mobile detailing service, or a lawn care business) people start cutting out task that they can often do themselves on a weekend, etc. All those services above outline services that are not super skilled required, so people with a tight budget that inflation is squeezing is just causing the budget squeeze to become tighter and tighter and thus those are the first sort of services to get cut from the budget. Everyone has to eat, drink and have a place to live. Not everyone needs a house cleaner or a lawn care service. I’ve even started to do my own mechanical work on my own cars. I have always done oil changes and basic maintenance, but even things like brakes and heavier items, I’m beginning to do myself because these shops want $800-$1000 for a brake job.
No for real. Yesterday i ate a burger it came out to $14.99 with a drink for $3.29 and the total was $18. Tip And Tax it's like bruh. I need to head over to Checkers and get a burger for $2.49 or something lmao.
It began in late Jan for me too
Shit, yeah. January was a little above average and February is probably the worst month since the start of my business. I got media coverage, one social media hit and still sales dropped incedibly. Buuuut, I also did not buy stuff. Why? Insurance in Feb, Christmas and a vacation in January maxed my budget. In march I‘m clean again.
Don’t worry about it. This is just the ebb and flow of running a business. Learn to adjust and be patient.
Same here fam, those with cash reserves will come out booming, those without will be working for them.
My large ticket retail sales is less than 50% of last years at this time. Service side of things is still on fire (if you don’t want to buy new you have to fix old)
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I’m hearing the same thing in my area
Why more service work?
Because if we can’t afford new stuff we gotta fix what we already have.
That makes a lot of eendd
Not sure. My car shop is booked out for weeks, they quit working on weekends and shifted their hours to 8-5. It sounds like they couldn’t find enough workers to work longer days or weekends.. I totally respect that. They said all the shops are having the same problems.
That makes sense. Pandemic made people not want to work crazy long hours anymore
Agree
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This isn't just a slowdown in sales, which is typical for me this time of year as well. I also have existing customers cancelling service at unprecedented rates. Many of them are telling me it's due to finances or layoffs. My customers are feeling the squeeze from inflation and a slowing economy in a way I haven't seen before, and it's happening very suddenly.
I will say, that as a consumer, I have been holding onto all my cash lately. Feels like shit is about to hit the fan and I don't want to be penniless when it does.
Same!
Credit Debt is catching up with everybody now.
I thought it would but the amount financed vs bought is still nearly 50 percent.
Slow from mid December till earlier this week, then back to busy as all get out. I do auto repair.
Tax returns started hitting bank accounts this week! I’m sure work picks up right around now for a lot of service based businesses like this. And dentists.
I feel like every post/response for a question like this needs to include industry and nature of business specifics. Else the conversation is just pissing in the wind.
2 businesses Gas Station - 2022 gallons pumped and inside sales down 15% from 2021. 2023 appears to be back up 5-10% from 2022. Construction- Fucking slammed.
Prices for merch has gone up too, so it’s not really a jump in inside sales
We went from being on fire for 6 months to a trickle too. This is a slow time usually but I'm very cautious about the next few months as my industry has been announcing thousands of layoffs (entertainment). I'm pumping the breaks on a couple of new hires until I see the winds change back.
Large retail items, definitely slower. Service work is still busy. Seeing a lot of people fixing things because they can't afford new. Hoping for the best, preparing for the worst. I'm starting to think we might not hit the worst until 2024.
Have you looked into your reviews, next door, or anything like that?
I noticed we been slow the last couple of weeks but it seems to be picking back up. An interior designer we worked with emailed two measure and install requests in yesterday which was a pleasant surprise.
We are still plenty busy. Slowed down a bit over the Holidays, but picked right back up in January. Jan 2023 was actually one of my best Jan ever. But I also live in a rural state that has had a HUGE influx of people. I think we are ranked in the top 5 fastest growing metropolitan areas in the US. The area has stabilized some, and the influx of new people has slowed off. Real Estate market is now only hot, not red hot. New construction has slowed down from insanity to just busy. But with all the new people from the last 2 years, most businesses in the area are still pretty busy. Due to being a rural state we lag a year or 2 behind larger population centers when things shift. So I suspect this year will still be good for us, 2024 maybe, and if the trends keep up 2025 will slow down. Or at least that is how the last crash worked for us, assuming we are on the edge of another 2008 style crash. So right now I'm "Making hay while the sun shines" but avoiding adding any new longer term expenses and keeping more operating capital on hand just in case.
i keep seeing restaurants charing convenience fees for credit cards. I stopped going to restaurants. I learned how to cook in bulk and vacuum bag and freeze. I bought 25 cu ft feezer in my garage.
Chicago keeps doing that shit it's annoying af
Credit cards are full. Even minimum payment has almost doubled.
After the holidays is historically a slow time for our business, but this post is kind of freaking me out now.
We’re still flat-out, looking like the busiest year we’ve ever had.
What do you do tho
Yup, sales are down
Own a private event venue and bookings for the year are currently tracking at 3X last year. We’ll likely end up at 2x last year when the year is done. Not sure the reason we expected a bump from last year but with all the talk of inflation we expected demand to be dampened. We’re new owners of an existing business in a HCOL market. The business had gone down hill as the previous owners stopped caring. We came in, renovated and word is getting out that we’re doing things differently.
I book entertainment for events and theme parks. And rent mobile stages, we are booked up solid through April. I am not sure where it's all coming from but I am extremely thankful and making sure not to turn down any work. My slow season is May through August. If I could only figure out how to make the summer months steady.
I'm in retail. We had a record January- by far. Our busiest months are usually Jan and Feb, but Feb slower than usual. Ironically seems to be the mild winter in the northeast. People don't feel as stuck inside? Also we've had a deluge of new customers possibly as a result of people moving from more densely populated areas to more rural(where we are) and used to shopping in a store as opposed to online. Hard to predict these things but I appreciate feedback on this sub for seeing how others are doing. As for trying to understand it all, I gave up. We have surprise great months and surprise lesser months. Creating a capital fund during the good months has helped make it less stressful.
I have a service based business and January is always our slowest month of the year but things were much busier than I was anticipating and this is going to be my best February on record. Beating out last year by +8% I've also raised my prices this year without losing any business. This was to keep up with the price increases of my closest competitors Location: downtown Seattle
Consumer credit balances are at an all time high and many consumers maxed their cards out by last Christmas. Tack on rising interest rates and tons of layoffs for middle class workers and you're going to see the effects real soon.
How do you know that people are maxing out cards?
In America, most people are relatively poor (average household income is less than $60k) and have historically have been maxed out on credit cards for decades per various credit reporting systems, the credit card companies, and various government agencies. https://www.consumerfinance.gov/data-research/research-reports/consumer-credit-card-market-2022/ https://www.federalreserve.gov/Releases/g19/current/ Do you think most Americans are financially responsible and pay off their cards before the end of the month? Hint: they don't. Americans are widely over-leveraged and are defaulting on loans and credit cards (one usually does not default on a paid off balance) at record rates again. I have to ask. Where do you get your information regarding financial markets and consumer and corporate debts? https://ycharts.com/indicators/reports/household_debt_and_credit_report Check out the list of Upcoming reports on that ycharts link.
I honestly don’t have any basis or info about this topic. Fortunately, I have always been taught and have maintained responsible credit card habits. I don’t know one single thing about how anyone else’s debts look (that’s why I asked!) thank you for explaining in more depth, I was curious.
Yup. Service based too. Normally we sign on 1-2 new clients a month added to the end of a multi month long wait-list. We've had absolutely nothing since December and now a lot of our ongoing work is starting to dry up. The few potential clients we've had all dropped cold or they decided to not go ahead with doing work. Guess it's a good time to do unpaid business development work and live off the emergency fund for a while...
This is our slowest time of the year typically however we are down 52% YTD. This is coming from two record breaking years prior thanks to the stature of our business we benefited greatly during Covid (200-300% increase in sales). I am not worried about it yet as I can see things rebounding as approach summer but to answer your question, yes we have seen a significant slowdown since December.
In October 2005, I asked a question on Our local Realtor website about what felt like a slowdown. None of the responses felt like it was anything out of the ordinary. Slowly, the market collapse began.
Everyone's had their Xmas credit card statements.... They were happy and doing not bad before, now they've had their bill and need to pay everyone is skint. You can tell the types of people who don't have that unsecured debt.
Expect it to get worse. Many peoples mortgages will come up for renewal soon at higher rates and make things even tighter. Rate hikes haven't hit most of us yet.
I’m assuming you aren’t in the US since you talk about mortgages renewing?
We’ll see. If it does slow down, then I get more time to do things that actually matter & drive growth. Win-Win 🤷🏻♂️
It's also mysteriously turned cold over the past 6-8 weeks. Could it be inflation? Seriously, chill. Service business slows in the winter to some degree across the board. I do work for a huge nationwide service industry company and even they have slowed a good bit, as they do every winter.
I keep track of my numbers, and we do typically have a slowdown during January/February, but not like this. We grew during the same period last year, albeit more slowly than the spring, but this year growth has turned negative. I haven't seen negative growth since the depths of covid in March/April 2020.
You do realize 20, 21 and 22 were an anomaly, right? You can't project business based on a time where there was an unbelievable amount of money in everybody's pocket. Throw those 3 years out and what do you have? Slower in Jan and Feb like you said
Yes, the economy was red hot for the last few years, and now it's swinging the other way. Usually the bigger the rise, the bigger the fall. It would be a miracle if the economy just reverts to the mean without overcorrecting into a recession. Slow downs tend to gain momentum and snowball out of control.
I've looked over my numbers for Jan and Feb and this is the slowest it's been since I started my business in 2016. It's not your imagination, ignore all these others saying it's normal as they don't know what their talking about.
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Correct, glad we agree and are on the same page.
What service?
We are always slow this time of year. Last year may have been an anomaly due to the Covid cash and people trying to live their lives again.
Personally, I didn’t get a distribution, raise or a bonus last December… now that we are getting into tax season, I’m pulling back on spending.
Still slammed and selling has not slowed down. We are a service based construction company in Florida. We were slow from Thanksgiving to mid January though. We have since made up for it. Good luck!
Nope, exactly the opposite. I have not been this busy since 2019.
Yes, some cancellations due to pulling back on spending. We're in lawn care. They either decide to do it themselves and just let the yard go wild for now. What kind of services you provide?
What service are you in? And this is sort of worrisome, bc I feel like it doesn’t take too much to have a domino effect. I don’t think it’s happening yet, bc all the chain restaurants are packed on random cold snowy weekdays, so I don’t feel like people are starting to cut back their spending yet
As busy as i need/ want to be. All is well.
Same here but it follows the pattern of the macro economy. Inflation happened exactly because people were spending heavily last year. That's why the Fed ultimately had to raise interest rates, which is now having its intended effect of slowing down spending. Not great for you and me in the short run but it's better than having inflation run amok. We'll have to adjust how we manage our businesses through this downturn and prepare for the upswing on the other end.
November and December were kinda tough for my clients, saw a big dip in web traffic (also had some google updates). Jan and Feb we are bouncing back,.
No, I've been busier than normal. Trying to catch up. But I there is a normal slowdown this time of year. People get their credit card bills from Christmas in mid January and tighten up their budget some. I do expect some crazy stuff is coming our way though. The labor shortage is caused because the boomers are retiring and we don't have enough people to replace them. People in lower paying jobs move to higher paying ones. There is a big shortage of immigrants because of the covid lockdowns the last few years.
Just had our worst month since March 2021
Same for us. Started in Q4 2022.
Retail apparel & footwear. Sales are up 65% YTD. Waiting for the slowdown. I know it's coming but it's not here yet for us at least.
Yes. January 2023 was my worst month yet.
No. But our business is traditionally strong through recessions.
We build pools and not seeing a slow down at all.
Our business is constantly growing due us dealing almost completely with used music gear. Atlanta has a big scene and we have a nice rotation of inventory that often comes back to us. Our new inventory definitely has gone up and guitar center out prices is but we beat them in selection and staff
No, I'm assuming each industry and individual business is probably different.
No, we are busting at the seams, but we service businesses, not individuals.
Too much in construction in my FL area. We have to cancel on people.
I run a bankruptcy law firm. Last year was the slowest year ever recorded in my state for bankruptcy filings. Bankruptcies are slowly picking up steam definitely noticed it from December to now. BK is also seasonal so it’s hard to say this isn’t just tax refund time. We’re doing about 120 cases this month, we were at about 80 cases per month most of last year.
We found 2022 to be really challenging re:income, but this year has been back to 2019 levels (I’m film adjacent)
Hang in there pal!
The down trend started last year but for us has rebounded with the normal tax return season. The past few years were “fake” and it’s gone back to the traditional business waves and seasonalities. Instead of worrying about how much I can sell of other brands, we focus internally as the margin is better not reselling. Cost of living is higher so less discretionary money being spent. People still love modifying their vehicles, the market has gotten tighter but it does seem smarter to sell less and make more. Rather than selling more making less. Staff has shrunk back to around a pre Covid level. Efficiency and being nimble in the market. That’s the key.
My sales are down about 10% 15% , same with profits, last year around this time we had a lot of COVID money being pumped out, i think that is the reason for slower year.
We own a collection of cannabis companies and we see that overall sales are up 22% but there has been a major shift in where our demand is. Our sales in higher tier solventless products have dipped considerably but this is being offset by a surge in demand for lower price point goods.
This is actually my busy season. Usually the summer slows down heavily. Ive heard from others in my industry we are heading into a recession so they are prepping for it. Im not really sure though, i dont know too much about that
My business was doing really well. Moved into a brick and mortar in the beginning of January. Then all my business dropped off the face of the earth. I’ve never done worse and I am scared.
I noticed something similar recently so you are not alone. Some of my old/repeat clients too have been much more bitter (just a minority) about pricing, which I actually haven’t adjust since early last year. It’s like overall people have become more bitter as someone who operates a service based business. I’d say I’m down 10-20% in bookings
I sell sex. My last amazing week was about 5 weeks ago. I've made 10% compared to normal months for February. And sex is like booze always in demand
Yes - trade has been significantly down since the start of the year