Bracing for Impact
For the year 2018 Feather did $199.6k in sales and had a net profit margin of -0.37%. That means the company lost roughly $700 for the year. That includes the fact that i didn’t even pay myself. There were a lot of things that I didn’t foresee, like the whole draining system having to be rebuilt. I don’t know if the store is completely finished yet. I’m running with 3 washers and 5 dryers, but I think I may need more dryers.
In the meantime, I have bigger issues on my hands which is losing a couple of major customers. I lost a skin clinic this month. They were spending roughly $800 a month on laundry but then decided to install their own washer and dryer at their facility. On top of that, my best customer, which is a maid service that cleans roughly 40 AirBnB units, installed an extra dryer in their supply unit as well and they cut down their spending tremendously. That’s another $2k — $3k a month. Combined, this was roughly 20% of my overall revenue. That’s not a great feeling to be losing major business like that.
Coming into 2019 I made a lot of changes to my accounting methods and spending habits. My goal is to turn at least a 10% profit every quarter. I’ve trimmed the fat in many areas of the business and am continuing to do so. Given this drop in sales that I’m deeply worried about, the trimming of the fat should at least keep me in the black.
It’s a scary time for my business. It feels like a house of cards that could fall apart with the slightest mishap. I need to fortify the cash flow so that I can withstand a few bad months. Right now I cannot even withstand a few bad days in a row. February is really going to be a make or break month. I’m going to learn a lot about my business this month.
The crazy part is that I’m itching to open a 2nd location. Another location could help fortify this location. But I think it would take a minimum of $20k to open another location. And that means building the coffers to $30k. My best guess as to when I will be able to open another spot will be Q2 of 2020. Because regardless of what happens this year, next year I will be in a position to refinance my mortgage and put that cash towards another location. That’s the long term vision.
For now though, my main concern is getting out of February in the black. The beginning of the month is always tough and I’ve already started with an unnaturally high water bill. I don’t know why, but I feel some sort of catastrophe coming on and I feel the need to brace for impact by making my company as lean and as efficient as humanly possible.
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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