Monday, March 27, 2006

A Day of Grace

[please note: this post is addressed to the community here at Circles. They are the "you" to whom I refer.]

I'm sure I've mentioned that I don't like to have sales.

The theory behind the "sale" mechanism is that you either move along products that love your shelves too much, or you generate a burst of cash.

In my experience, sales with these motivations simply feel bad. To achieve these ends I really have to promote the sale to the widest possible audience. People wait for the sale. When sale day arrives that anticipation leads to a ferocious feeding frenzy. People come who never shop here at any other time. They don't care about the shop, the staff or the other customers. They just want a deal. In a yarn store, where the purchases can require a lot of technical assistance, it can be downright ugly. It drains my soul and whether the customers realize it, it drains theirs, as well.

Financially, its not worth it. A lot of inventory goes out of the store without generating enough cash to replenish it and pay the bills. It can feel like a lot of money in the moment, but it only lasts a moment. Then sales for the next few weeks are slow and cash flow anxiety is even angstier than before. It feels a bit like an addictive cycle. I no longer do sales.

Well, not for those reasons. I believe the best reason to have a sale is to celebrate and/or appreciate. I hadn't tested how a sale with that motivation would feel until this weekend:

I was prompted to have a sale for two reasons. First, I am overwhelmingly warmed by the support I am receiving from you during our big tranformation to community ownership.

But honestly, I didn't feel that I had done a good enough job promoting the Farmhouse Yarns Trunk Show. It felt important to generate a great turnout to maximize exposure to Carol Martin's meaningful work. The only way I could think to ensure this was to have a surprise sale. Since that also felt like a good way to show you my appreciation, I went for it. On Thursday we announced a sale for Saturday via our email list. We sent a reminder early Saturday morn.

Friday evening, I sat in the store doing a little preparation, wondering if anybody would come. The feeling that all I can do is wait and see is the daily experience of this shop owner. Will they come? While I was wondering, Judy arrived with vibrantly colored flowers for the shop. It felt like a good omen.

Saturday morning, we got a message that Carol had a lambing emergency and would be late. Uh-oh. This is not good. But Jennifer had gotten there early and was already welcoming people. That's a good sign, right? Next a few customers arrived at opening time and left disappointed that they couldn't wait for Farmhouse Yarns. Gulp. Then Judy put out the flowers.

Before we realized it people were streaming in. People who were pleasantly surprised at the the announcement of a sale. The shop was bustling all day and it never felt frenzied. The sitting room was bathed in sunlight. Or maybe it was the glow of the people relaxing there all afternoon. Carol arrived around 1 and set up in the classroom. She put out big baskets of her lovely yarns and lots of knitted samples. Then she set up her spinning wheel. She was warm and open and told wonderful stories while you dug through the baskets and admired her work.

It was beautiful to me because it all felt symbiotic. Carol had a good sales day, but more importantly was inspired by your reception of her. It can be isolating creating products and having little contact with customers. She didn't know that part of our mission is to support farmers and artisans. You all did a good thing with your enthusiasm for what she's doing. Its a challenge in today's market to sell yarns with American grown fibers.

Circles had an excellent day of sales without the nasty frenzy part. Jennifer, Judy and I thank you for making it a relatively smooth day for us. It seemed like there were a lot of very happy people going home with beautiful yarns to be entertained and stimulated by for many, many hours.

The sale was very successful. Circles did a good bit of business, but what really made the day wonderful was the presence of Carol Martin spinning yarn and sharing her stories, people appreciating her mission, people sharing with each other in the sitting room and a general feeling of joy throughout the day. I felt the balance that makes Circles what I had hoped - a myriad of connections leading to a little bit of grace. It made my heart sing.

So, thank you all for participating and supporting this little experiment - both the one on Saturday and the ongoing one that is Circles. Especially as we move ahead into completely uncharted waters. I can't do it without you.

And a special big thank you to the staff at Circles who are hanging in there, too. They continue to give a lot of energy to Circles - both me and you - for that little retail pay check that is sometimes late. Where would we be without them? Judy, Jennifer, Bridgid, Alexis, Liz, Martha - I am blessed to have you all in my life.

May we continue to experience a little grace now and then.

Saturday, March 18, 2006

Reluctance or Revolution

People get an odd chuckle out of the title of this blog. It is tinged with a bit of confusion. What's the reluctance?

Its not the retail per se. I've always had a hard time "selling". I prefer to serve than to sell. The difference is not subtle. The question is whether one can be successful in business without "selling". Skeptics say no.

What do I mean by serve rather than sell? Semantics become important when articulating something like this. I am using the word sell as an action where the "sale" is the be all and end all. It is not qualified by anything except the dollar signs on the cash register. There are people who are masterful sellers. They can get you to gladly (at least in the moment) part with your last dollar for a plastic toe ring when you are in a desert dying of thirst and you know the next person you see will have a bottle of water to sell.

In the study of economics there is no value system other than increasing the digits after the $ sign. An economy with a Gross Domestic Product (GDP) of $4trillion is better than an economy with a GDP of $3trillion. Full stop. Even if the $4trillion dollars is completely comprised of the sales of exploding vanilla wafers and the $3trillion dollars is comprised of the sales of a food that prevents cancer. Though the development of economic measures that assess the quality of goods and services exchanged and the quality of life achieved has been discussed in academic/intellectual circles for at least 3 decades, there has been little progress in implementing any such thing that influences our economic choices.

We are so trained to value the exchange of dollars for any sake without any value assessments, that we have come to believe that it is all that matters and that it is all that you have to focus to create a success . Sell, sell, sell. On a macro level, who cares if there are 3 million little broken plastic toe rings in homes, gutters, landfills? Money was exchanged. Hurrah! On a micro level, who cares if you couldn't really afford that $200 shirt and aren't buying groceries this week? We made a sale!

Now, certainly, to have a successful business you must generate more sales than expenses. You have to pay the rent and pay your vendors. You won't last long if you don't. Like everybody else, I would like to have a financially stable, somewhat comfortable life. I need to support my daughter and be concerned about my own well being. The question for me is the ethic or deep inner ecology of how you get there and how far you think you need to go. The toe ring in the desert example speaks to what I mean about how you get there. How far you need to go is another aspect of the ecology of business.

In any financial class you take, you are likely to learn about the expectation of net profit growth. That is, a successful business is that shows a constant increase in profits. An increase that is greater than the general economic inflation rate. It is not good enough to achieve profitability and just hold that profitibility. If your company earned $1M in profit this year, the shareholders expect you to top that next year. Perpetually. What is the ecology of this model? There is no organism in a healthy ecological model that has perpetual growth. When growth is too rapid, the organism dies young. Generally there is physical increase in size until maturation. Then when we might see some kind of transformation in form to represent further maturation. In natural ecological systems, everything has point of growth that is satisfactory and lives out a life span at that size.

All of this is a long way of saying that I rebel against our accepted principles of economics and business growth. Being who I am, I can't make a sale solely for the sake of the sale. I must feel that I am meeting the needs of the buyer. I don't want to partake in an unhealthy, destructive behavior (addictive buying) and I don't want to derail someone from their own path with my agenda (knit this because its what I have instead of knitting what you really wanted to knit.) I hold the ideas that if I create an atmosphere that honors the customer as a person and works to meet that customers needs, they will be compelled to buy products from me. As a business, I need the sales. I can't deny the self-serving aspect of it, but my goal is that the sale be a mutually beneficial transaction. One that everyone feels good about. That my business succeeds because I offer products and services that are truly appreciated. It is a heart-more transaction rather than a heart-less one.

Circles is not financially successful yet. I have my shortcomings (not very good at creating retail displays, for instance.) The business was bootstrapped and that has inherent shortcomings (any small financial setback doesn't just halt the ability to grow, it pulls the company backward.) I aspire to a much higher level of customer service and much deeper/broader offering of product/services. But my vision to create a successful business steeped in a different economic outlook and a different business ecology has not yet been proven ludicrous. (Even if we were to fail, it could simply be my failure, not a proof that the theory is bad.)

Beyond selling products and services, I strive to help people get the most out of their knitting experience. To capture the highest potential that knitting can bring to their lives. This isn't always about buying more stuff. Often purchases are made as a self-soothing tool. A moment of human transaction. A moment of power. A moment of _____. (you fill in the blank.) Often these moments are deceptive and ultimately self-destructive. The real need is not being met. The being with people. The tapping into the true power of your creativity. The healing of the alpha waves (the same waves generated by meditation) that are generated by the very actions of knitting. The ________. (You know what to do.)

Creating the kind of place where people have the opportunity to have quality exchanges is a slower building process than creating the kind of place where people come to be "sold" to. Its more complex. Its more challenging. Frankly, I am more exposed as a flawed human being. It takes a different kind of energy. Energy that can detract from the energy it takes to maximize sales. Attracting clientele that aren't used to this approach, articulating and creating the experience you envision, building a clientele that appreciate what you are offering, maintaining what you are offering and converting that experience into sales is more like cooking in a crock pot than a micro-wave. It takes exponentially longer, but the flavor is so much richer.

Now we're at a critical point. For Circles to be successful we have to make changes. We've been mulling the options over for a while - contract, transform, expand - and we've chosen a brazen one. Really test the concept of the experience fueling the business. The experience is created for our customers. If they are the ones experiencing and the ones who fuel the business let them merge. Let them be part of broadening the experience and increasing the pool of people who bathe in it. Embed them as a way of generating more people who embody the vision and carry it into the rest of their world. Not just for the success of Circles but the propogation of an idea.

Is this revolutionary? We are not the first to see our customers as the source of the capital to build the business and to embed our customer base into the business by making them owners. But we are part of a lineage of businesses that buck the valueless ideals of economics as we know it. We are trying find smart business strategies without giving up those ideals.

Am I a reluctant retailer? Yes, because I'm not sure I'm very good at it, per se. No, because the direct exchange of goods and services is at the core of human interaction. I like being at the core. Yes, because I want to serve people, I don't want to sell. No, because I see it as it as the chorus in a church. More people will come to church when there is music. Once they are they there, they may check out and find value in the other offerings. Circles is a place where the yarn is the music. Classes, field trips, events, stories about where the yarn came from, a cup of tea, a community and place that sees you as much more than a 'sale' are the other offerings. I am not reluctant to retail. I am reluctant to pursue it valuelessly. So often retail can represent the lowest common denominator in our mass psyche. I don't believe that we find that satisfactory. I believe that in the pursuit of dollars as quickly as possible business leaders have left us little choice. I believe people are inspired in more ways than one when they experience something different.

Is it all enough to motivate people to buy their yarns here often enough to enable us to build the business and offer more? Or even enough to sustain what we have? That is still to be seen. And for me, it is a test of a little revolution in that perpetual motion machine that I call a brain. I am not the first. Far from it. But it is still a revolution.

Now we'll see how many revolutionaries will join the cause of trying to make money while changing the way we approach it.

Monday, March 13, 2006

Rumors vs. Visions

I heard a rumor the other day. Another LYS owner called to tell me that customers in her store were reporting that Circles was going out of business.

How do such rumors get started? Well, the best ones are not far from the truth. But those who generate rumors fail to see the creative potential of a near crisis. Rather than adding their power to the pool of those working towards transforming a near crisis into an opportunity, they seek power by propelling the near crisis into certain demise.

The truth is that Circles has been struggling. I have been struggling. A big part of my silence on this blog is that I have been facing some serious health issues. I don't want to turn this into a forum for reporting all the details of my ailment and yet, each day I wake up and hope I'll have a 'good' day which will mean that I'll manage to get to the shop for at least a few hours. The limited energy to devote to work has meant that I haven't posted here. But now is the time.

Being ill, I have not been able to drive the business the way it needs. I stopped teaching classes, which are a significant source for new customers and product sales. Pile that on top of the fact that we bootstrapped Circles to begin with and you end up with a business that is limping along.

We have no shortage of opportunities in front of us. Book publishing, pattern publishing, product ideas, travel circles and more, more, more. I simply can't make it all happen and without a push Circles is not viable. So, yes there was a brief moment of questioning whether the retail store was not the way to go. I could control the expenditure of my energy if I just had a design studio with workshops and social circles. It was a thought. Hence the rumor.

However, reports of our death are premature. The thought arose and the very next thought for me was about how to preserve the community. There are people who come to Circles for much more than the knitting. The knitting brings them together, the experience keeps them together. And that experience is vital to me. It is where I feel my calling and it nurtures and sustains me. So, rather than take something away from the community, we have decided to offer them more.

We are opening up the ownership. Going co-operative. Its very exciting. The community will not be vulnerable to the decisions of two owners because the members of the community will be owners. We have nearly 2,000 names on our customer list. The resources we can engage from that pool are enormous. Samples can be made, web presence increased, classes taught, events planned, inventory researched and planned out and so much more.

We already have a steering committee and are in the process of changing the corporate model. After a brief survey to test the idea with our constituents, we will put out the details of the offering and see what happens. I am thrilled. Can't think of a solution that is more aligned with my soul.

Here I was struggling to find a third partner - something we have considered for a while since my partner is not involved in operations and cannot help drive the business. I wondered if I was reluctant to give up control or be The Creative presence. I never thought of myself as someone who needed power. Indeed it more likely that I don't take control when it would be best if I did. But as soon as I thought about the community as the third partner, I felt at peace about it. It feels so natural and so dynamic. The energy at Circles right now is awesome. It simply feels right. It is in line with the vision of Circles. It is a visionary solution to a dilemma.

So, here we go. Shares will be $100 apiece. Details will be forthcoming in email, on our news blog and our forum. This is no rumor....