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Post by millring on Apr 17, 2014 13:48:48 GMT -5
That's the thing...
they DO give us something. Something possibly irreplaceable. Something that obviously on some level we take for granted. We have taken it for granted for so long that it's taking a very long time to even sense that it might not be around forever...or even much longer. There are only a handful of really great guitar stores where one can go in and try out the boutique guitars in any great number and variety.
And though none of them to date have made an issue of it -- they've tried to figure out other ways to make ends meet since they have become merely the testing grounds for what people are then going to buy off the internet at the cheapest price.
But what is it worth to us to have a Gruhns, Elderlys, Mandolin Bros, Buffalo Bros, Mass St, Podium......OOPS!
Is it worth something to us to have that kind of store survive?
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Post by martinfever on Apr 17, 2014 14:22:52 GMT -5
The old Podium...sigh...maybe we shoulda sold shares like the Green Bay Packers did back in the day...come to think of it, former Packer Doug Hart (he played for Lombardi) shopped in the old Pod not too long before it shut down. Perhaps Vince was telling us something from the great beyond...hmmm, he became Packer coach in 1959, same year as the Podium began. Dot dot dot.
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Post by drlj on Apr 17, 2014 14:48:16 GMT -5
That's the thing... they DO give us something. Something possibly irreplaceable. Something that obviously on some level we take for granted. We have taken it for granted for so long that it's taking a very long time to even sense that it might not be around forever...or even much longer. There are only a handful of really great guitar stores where one can go in and try out the boutique guitars in any great number and variety. And though none of them to date have made an issue of it -- they've tried to figure out other ways to make ends meet since they have become merely the testing grounds for what people are then going to buy off the internet at the cheapest price. But what is it worth to us to have a Gruhns, Elderlys, Mandolin Bros, Buffalo Bros, Main St, Podium......OOPS! Is it worth something to us to have that kind of store survive? All of the places you mentioned, while brick and mortar stores, are also among the biggest sellers via the internet. Great places to visit and try out guitars that you then buy from them via the internet usually for free shipping and no tax added.
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Post by Deleted on Apr 17, 2014 14:55:30 GMT -5
In theory, what BB is doing is little different from public TV or your local ”public" radio station, except BB doesn't have ready access to the airwaves and you don't get a nifty tote bag. But, as has been noted, when most businesses need money, they have to explain to a banker why, lay out some business plan, show how they plan to make money, etc.. (Unless you were doing business in Texas in the 1980s, that is.)
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Post by aquaduct on Apr 17, 2014 16:31:14 GMT -5
Peter--I get the feeling that those CD kickstarters for $15K include money to hire ACTUAL musicians--Chatham Street doesn't need to do that! True. God forbid we get in the habit of using actual musicians. It really stuns me when I talk to those folks and they lay out why they need that much money- Fly in some dude from the coast for 8 bars, camp in some rustic place on top of a mountain in order to get in the mood, hire some specific mastering engineer to tweak the vocal sound, etc. And here we are cranking it out at the dining room table.
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Post by RickW on Apr 17, 2014 20:40:39 GMT -5
15K would buy you a pretty spiff laptop, with a DAW, some great mics and other gear to make a damned fine recording studio. It's just not as hard anymore. Of course, you do need to know how to use it, which is another issue.
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Post by lar on Apr 17, 2014 21:41:50 GMT -5
Businesses in general, but small businesses in particular, often run into financial problems for one of three reasons; 1) lack of adequate capital (the most common reason); 2) a flawed business plan; or 3) poor management. It’s amazing how often number 1 is a product of numbers 2 and 3.
If BB is under new management it probably means that the new people bought out the old owners. “Savvy” business people are reluctant to invest any more of their own money than they have to. Why? Because it’s a risky investment. The new owners would rather transfer the bulk of the risk to a bank.
During the “go-go” days of the 80s leveraged buyouts were all the rage. The problem is that a business financed with debt has to throw off sufficient cash flow to service the debt and return the same profit that the previous owners enjoyed. That can be accomplished only by making the business more profitable through raising prices (generally not acceptable to the customers) or reducing costs (read: cutting jobs).
BB is probably undercapitalized and doesn’t have the financial staying power to weather a financial downturn. Their appeal looks, to me, like an attempt to raise working capital to buy stock (instruments). Successful companies fund purchases of new stock from the sales of existing stock. So, and this is 100% conjecture on my part, BB is suffering from one of two problems. They have depleted stock and used the cash for something other than replenishing stock, or, they are sitting on a pile of inventory that can’t be sold profitably.
In the first instance operating expenses may exceed the margin on sales.
If they have inventory that can’t be sold at a profit it could mean that they either paid too much for the inventory, which happens a lot to business buyers who don’t know what they are doing, or prices for vintage instruments are not what they expected them to be.
Either reason would be a good indicator of poor management. I don’t see a good reason to reward poor management by helping to fund a Kickstarter campaign. It’s a donation and not an investment. And it’s not tax deductable because BB doesn’t meet the federal standards. As the sign at our local co-op elevator company used to say, “This is a non-profit organization. We didn’t mean it to be that way. It’s just the way things have turned out.”
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Post by Deleted on Apr 17, 2014 22:44:10 GMT -5
Businesses in general, but small businesses in particular, often run into financial problems for one of three reasons; 1) lack of adequate capital (the most common reason); 2) a flawed business plan; or 3) poor management. It’s amazing how often number 1 is a product of numbers 2 and 3. If BB is under new management it probably means that the new people bought out the old owners. “Savvy” business people are reluctant to invest any more of their own money than they have to. Why? Because it’s a risky investment. The new owners would rather transfer the bulk of the risk to a bank. During the “go-go” days of the 80s leveraged buyouts were all the rage. The problem is that a business financed with debt has to throw off sufficient cash flow to service the debt and return the same profit that the previous owners enjoyed. That can be accomplished only by making the business more profitable through raising prices (generally not acceptable to the customers) or reducing costs (read: cutting jobs). BB is probably undercapitalized and doesn’t have the financial staying power to weather a financial downturn. Their appeal looks, to me, like an attempt to raise working capital to buy stock (instruments). Successful companies fund purchases of new stock from the sales of existing stock. So, and this is 100% conjecture on my part, BB is suffering from one of two problems. They have depleted stock and used the cash for something other than replenishing stock, or, they are sitting on a pile of inventory that can’t be sold profitably. In the first instance operating expenses may exceed the margin on sales. If they have inventory that can’t be sold at a profit it could mean that they either paid too much for the inventory, which happens a lot to business buyers who don’t know what they are doing, or prices for vintage instruments are not what they expected them to be. Either reason would be a good indicator of poor management. I don’t see a good reason to reward poor management by helping to fund a Kickstarter campaign. It’s a donation and not an investment. And it’s not tax deductable because BB doesn’t meet the federal standards. As the sign at our local co-op elevator company used to say, “This is a non-profit organization. We didn’t mean it to be that way. It’s just the way things have turned out.” I think this is pretty spot on. Buffalo Brothers sold a couple of years ago to their repair guy, James Hood. As is the case in a lot of music store sales, the previous owners sold down the inventory to reduce the cost of the business to the new owner. So, the new owner pays for the blue sky value, a small amount of inventory, and hopefully the continuation of existing lines. The problem, is that to maintain those lines, there is an annual buy in; and when it comes to inventory on the secondary market, many of the connections that the previous owners had don't necessarily carry over. Further, if the previous owners self financed the sale, there is that monthly expense, or perhaps a bank loan. Dwindled inventory, the overhead of the payment for the business (either via bank loan or directly to the previous owner), and the requirement and credit worthiness to buy-in on product lines and get terms are all part of the issue. And while the previous owners may have had a great track record with vendors, it's back to square one for Hood. And right now, given that Guitar Center accounts for roughly 30% of Fender's sales, 40% of Gibson's sales, and 20% of Martin and Taylor sales...and is roughly 180 days past due on most of those accounts, those companies are being very cautious about how much credit they extend, and to whom. I suspect that they have lost or are about to lose key product lines, and can't afford the cost of the buy-in payable on delivery without terms. Add a slow buying economy, and the massive dent that Guitar Center has made in the industry (which could well get worse if they radically contract or close all together), and you have a huge problem. For music stores that are focused on primarily new instruments, the pockets need to be deep, the walls full, and the turns on the hooks consistent. As much money as $300k seems, it will barely cover the cost of meeting the basic annual buy-in requirements of the four vendors I mentioned, let alone any others. And by basic, I mean a buy-in without any payment terms, discounting, or shipping incentives. Couple that with the fact that new product inventory is the fuel needed to source products on the secondary market (as well as cash in hand), and I can't help but think the Hoods might well be in way over their heads. And the appeal via crowd funding rather than traditional avenues of business financing would seem to confirm that not only are they undercapitalized, but that the books aren't showing enough movement toward profitability to secure a loan.
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Post by Marshall on Apr 18, 2014 8:01:11 GMT -5
I have a friend that owns (now) a family business selling boys and mens clothing. One of the few ma & pa haberdasheries still left around. He inherited and sizeable chunk of dough, so he's just coasting to when he closes the store and goes into full retirement. But his little store selling suits and ties and boy scout uniforms has $1Mil in stock on the floor.
The $300K will probably just let them continue the buy-in on a couple of lines.
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Post by Doug on Apr 18, 2014 8:05:47 GMT -5
Once upon a time the rule of thumb was you need 2 yrs of operating expenses to open a business. Now days it seems that it's 2 days worth of capital to open a business.
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Post by PaulKay on Apr 18, 2014 13:21:12 GMT -5
Interesting. As noted, they are under new ownership. My father sold his business to a guy who never should of bought it and had to sell it within 5 years and lost a ton of money. A very popular electronic/furniture store in Milwaukee was bought buy the nephew of the original owner. He let the business go under and ended up closing 5-6 stores and laid off hundreds.
Sometimes when new people take over a business, they get in over their heads. But I'd bet Romney thinks they should be allowed to fail because that is the American way.
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Post by dradtke on Apr 18, 2014 18:27:13 GMT -5
Peter--I get the feeling that those CD kickstarters for $15K include money to hire ACTUAL musicians--Chatham Street doesn't need to do that! True. God forbid we get in the habit of using actual musicians. I'm glad you responded to this before I saw it. It was too good a straightline to pass up.
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Post by Tim Alexander (fmrly. Camalex) on Apr 19, 2014 9:55:41 GMT -5
Meanwhile, Neil Young’s campaign to fund his PonoMusic service surpassed its $800,000 goal by a factor of eight, making it the third-highest-funded project in Kickstarter history. I am in for one of the Herbie Hancock PONO units in October. I've never done anything remotely like this but then I am not sure there has been anything remotely like this tried before. At $400, I wanted to be one of the first and I think Neil is doing it this way to magnify, market and enlist those who reject the current state of music into a cause as much as a product. As to fundraising for an existing non-new project - I think Buffalo Brothers' idea is misplaced. they would be better off finding a Romney-like-music-lover to support the company over a "hump in the road" -- if that's what it is.
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Post by mccoyblues on Apr 19, 2014 20:00:57 GMT -5
It's not a charitable organization if the company is in business to make a profit and keep it for themselves.
These guys bought a failing business and didn't have the resources to save it. They understood the risk going into it.
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Post by Cosmic Wonder on Apr 19, 2014 22:00:57 GMT -5
As of this post they have raised $775.00.
Might be a good time to pick up whatever they have left in inventory, before the doors close.
Mike
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Post by TKennedy on Apr 20, 2014 0:06:08 GMT -5
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Post by billhammond on Apr 20, 2014 7:41:37 GMT -5
I would say the dipshit is the cranky neighbor, not the luthier.
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Post by TKennedy on Apr 20, 2014 8:05:09 GMT -5
The lady is obviously a dipshit too. My thoughts are that right or wrong anyone with an 800,000 house and swimming pool should be paying his own way on this one. He didn't get that place a few years ago on a builders income. That was the consensus on the luthier's forums as well. I looked on goggle maps, his shop is quite close to his neighbor's back sunporch. There may be more going on than meets the eye. Here are some letters to the editor of the local paper on the topic. www.sevendaysvt.com/vermont/letters-to-the-editor/Content?oid=2309470
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Post by millring on Apr 20, 2014 8:14:40 GMT -5
He wouldn't stand a chance of winning in Warsaw. Zoning would have shut him down before the neighbors ever did.
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Tamarack
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Post by Tamarack on Apr 20, 2014 8:56:14 GMT -5
The cranky neighbor sounds like the Neighbor from Hell who would harass her neighbors no matter what the issue or non-issue. My sister had such a neighbor. Among other issues, he seemed to object to the very existence of children. He also pissed off the cops with frequent calls on chickenshit issues. A coworker in a completely rural area had a similar neighbor.
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