Two Companies, Same Story.

My brother just got laid off yesterday. Actually, my brothers entire division got laid off yesterday. Seriously-- the entire sales force was told to hit the bricks. Things became "so bad" in the software business that an industry leader decided to axe its only real incoming source of new revenue. Talented individuals showed up Monday like everything was fine and were back at home by noon wondering "what next?".

An associate of mine has an issue. He's a one man shop. Built his business starting from the ground up in 2000. Not the sharpest tool in the shed, but smart and dedicated enough to build a decent business with a "future". That was until the downturn came. Now he is stuck in the middle--can't afford a mortgage, can't expand the business (has nothing to offer except higher commission rates), and is like a hamster running on a wheel.

One is a 40 man shop, the other a 1 man shop. Both American backbones.

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The Captain's old business was one that faced decline since 2001. We were saddled with a constricting marketplace, higher costs, declining margins, and an ever declining customers base. People just did not want to open their wallets for our product anymore.

We did not panic, however.

I had to cut overhead, lay off employees, jump to just in time ordering, pare inventory down to nil, and be as lean and mean as possible. Mind you--this was during the "boom". Everyone else was knee deep in excess as we were bailing out the water from the sinking ship. Guess what--we held out for seven more years-- but then closed.

Eventually there was nothing more we could do-- it wasn't our fault-- markets change, conditions change, etc. Still we were forced to become innovative and aggressive as the market pared everyone out. We could have survived but we foresaw everything collapsing around us. We were just smarter than everyone else and ran out the door before it was slammed shut on us.
The two cases of companies I laid out in the beginning are in the exact same position: heading for closure. They just don't know it yet.

Everyone faced with paring back starts axing fixed costs: wages. Problem is you do not get the same productivity out of what or who you kept to replace what you have let go. I axed all my sales guys in 2005. Went Internet based and print based. The result: sales were off 20 %. They were down 15% industry wide so in reality I was only down 5 points, but it still was down.

Next I started axing crew. Soon 5 guys were doing the work of 15. Quality inevitably starts slipping, mistakes increase, product satisfaction decreases, and you are left asking "why" when you know damn well what the answer is: you are just trying to get by.

Soon you have no choice. It is made for you.

We made rational decisions over a period of years in a "good" economy and were forced to close.

Irrational decisions are being made now. Panic has set in.


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My brothers problem: His company fired all its bullets at the enemy and now the gun is empty as the enemy comes in for the kill.

My associates problem: He has no bullets to fire at the enemy.

Guess what--both companies are screwed. They will both close. It is inevitable.

That my friends is why the politicians need to be held accountable for their actions. Wars, Markets, Open Borders, Tort Law, Mismanagement of Tax Coffers, etc.etc.etc.

We were ready for the onslaught-- why wasn't everyone else?
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Let's leave on a good note though!!!!



Don't ever lose the ability to dream! It keeps us going against all that is evil and wrong with this world!

-The Cap'n