Flirting with Disaster
This has been the longest stretch where I haven’t written about my business and the reason is simply the lack of time. The business right now has 5 employees and last month (August) was our biggest month ever with gross revenue of $21,600. But that number is a mirage. August was a perfect storm of activity. Live Nation had 21 concerts in August. And there’s a new client, a maid service that is servicing 30 AirBnB units in 1 building. For 3 weeks in August and a couple of weeks in September we were responsible for most of their laundry. Now they have their own internal laundry operation, and they’ve cut down what they outsource to us in half.
Furthermore, as corporate sales are going up, residential sales have fallen off a cliff. Normally when sales take a dive I run ad campaigns on Instagram. But given how busy we’ve been with our commercial clients, I decided against spending money on ads. But we’ve slowed down so much in the last couple of weeks that I’m being forced to cut employee hours and start running more ads.
The crazy thing is, despite an astounding 50% increase in sales from July to August, both months turned out to be net losses. Cash flow is abysmal, especially considering my payroll is $1,500 to $2,000 a week. Right now I only have $3k in the bank! It’s like playing chicken with disaster. I do have access to loans but fuck that, I need to just turn a profit.
When I started this business, I would’ve considered $20k in revenue in one month, and 5 employees, as monumental milestones. But now they are just points of pressure. It’s not like it was even 6 months ago. If sales drop I have to cut 5 people’s hours instead of one or two. And if I get into financial trouble I can’t just run to my brother for a few hundred dollars. I’ll need thousands. Plus I’m responsible for a lot more expenses now, which means the pressure to keep sales at that same level is enormous. The risk of going under is much higher than it was before.
I also vastly underestimated the amount of work it was going to take to run and maintain the store, on top of doing all the deliveries. If I had $20k in the bank, I would double my ad spend and hire a driver and focus on marketing and sales. But I’m barely squeaking by month to month. There’s no money to advertise with, much less hire a driver.
My plan all summer has been to build the cash flow to $10k by the end of October and then buy a desperately needed van. My car is about to die. Plus with a company van I may be able to promote one of my current employees to a driver. But that plan will go to shit if I can’t keep sales up.
I’m having a staff meeting on Friday where I’m going to explain to everyone that I have to cut their hours for the next few months. That’s going to hurt a little bit, but we’ll get through it.
I think the store right now is running roughly at 50–60% of it’s total capacity. I have to grow it to 90%. I want the store to be open from 7 am to 8 pm, then I want to close the store and have people in there doing laundry for a night shift from 7 pm to midnight or so.
There’s room for growth. I just have to put the petal to the metal.
This story is part of a series documenting the journey of a Dallas startup called Feather Laundry. For your reference here is the Table of Contents for the series.
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