Many challenges to small business

Dear Editor: This letter is to disagree with your assumption that the financial situation the mayor and his family found themselves facing was the result of poor financial management. You stated that the Mayor’s long past situation should result in the electorate questioning his ability to handle money. Please understand that citizens who enjoy the security of a monthly pre-determined income can easily balance their budget. You know what is coming in, just do not spend more.

My wife and I operated a small business in downtown Penticton for over 12 years. Many people do not realize that a small business starts out with zero dollars in sales (cash flow) each month. From this starting point, as a small business owner, you attempt to cover all the fixed expenses for the month (rent, utilities, taxes, insurance, employee payroll) with faith that there will be funds left for personal expenses and to purchase advertising — in your paper as well as other medium which will encourage additional customers through your door in the coming month.

We know from personal experience the devastating effect the financial downturn had on small businesses. Most small business owners are optimists otherwise they would not own a small business, so it is easy to fall into the trap of thinking that the situation will turn around in the near future. This was not the case in the years following the start of the Jakubeit’s situation.

The credit card debt may look excessive and most salaried residents may assume this was the result of out of control personal spending; however the likely facts are that their business operated the same as ours, in that, most suppliers insist on being paid by credit card for store stock. This can result in credit card debt rapidly increasing when cash flow, through no personal fault, is reduced due to a sudden and unexpected downturn in the economy.

Lastly I would like to comment on Mr. Ernie Slump’s letter that a business should be able to “change directions at the drop of a dime.”

It clearly shows that he has no concept of what goes into the operation of a business in Penticton in the last decade. What does he think the owner would do with the building lease, the inventory, the store fixtures that are designed to display the existing inventory, and the stock that is already on order?

Also, does he not realize that most small businesses must order stock (to meet seasonal changes) months in advance. Our Christmas inventory had to be ordered in February to arrive in September to be placed on our store shelves in November.

As citizens of Penticton, we would far rather place our trust in someone who has experienced an economic downturn, solved the situation in a legal and forthright manner, then gone on to serve the community; than someone who has only experienced the receipt of a regular paycheque every two weeks. Cliff & Sharon Bristow Penticton