Posted by Jani at Monday, July 15, 2013 on The Art House Blog
It’s common business wisdom to be super-cagey about the money stuff, pretending all is well when it isn’t or pretending all is bad when it’s great.
Aside from the accounts we all have to submit to Companies House, which are really quite general, the rest is something most places won’t talk about or share.
Add to that the general social taboo on talking about money, the potential for misunderstanding when you do talk about it, and the suspicious reaction people often have to fundraising and not-for-profits, it was a hard thing for us to do yesterday.
You see, The Art House isn’t in trouble overall. Far from it. Thanks to your lovely support, our income grows each year and we’ve managed to become so much more than we’d imagined or hoped for.
But, the unexpected heat wave has meant far fewer customers than we usually expect at this time of year, and we’ve had a quiet few weeks this July.
(Incidentally, all the small businesses we talk to are experiencing the same thing – so do support them won’t you!)
Add to the quieter than expected weeks, a big ol’ VAT bill is due soon, so we thought we’d share it with the people we know care about this place.
We realise that it’s not just our volunteers, directors, members and staff who have a stake in The Art House.
It’s all of YOU as well.
Given that The Art House is an important part of so many lives, we feel honesty about how we are doing is important. We feel that, when we need a little extra support, our community would want to know.
So we talked about money.
I made a very high tech graph of our total target earnings for July, by week, and how we missed it last week – and will probably miss again this week, too, as it’s been so hot everyone has headed to the beach!
Now, a few bad weeks aren’t going to close us down. This situation is what our accountant likes to call ‘a cashflow problem’. The cash isn’t flowing.
A combination of doing well for three months (yay) and getting the matching big VAT bill and that VAT bill coming due at the end of what looks like it’ll be a really, really quiet few weeks is what has made things a little tight. We’ve had some yummy advice on how to stop this happening again next year, which is great news, and we’ll be putting that into action right away!
We haven’t ‘spent the VAT’ as some charming individual on Facebook suggested, the bill has not actually arrived yet, we just know it’s coming.
It’s called forward planning. We know how well we have to do THIS month, in order to be OK in two, three, four month’s time.
These things have happened before, and will happen again, and are part of the journey of any small business. One of the tricks in business is to act BEFORE there’s a real problem. Once the unpaid bills actually start piling up – which they haven’t yet – it can be hard to recover, so the time to act is when things are still OK but look like they might not be as good as they need to be.
Which is right about now, actually.
So, the VAT bill ain’t going to kill us.
What it might do, if we don’t improve our income right away, is to stifle our ability to thrive and grow sustainably into the Autumn. It will put pressure on us to cut back other things, mean our directors have to work all their days off (again) and, well, generally this is not how we want to run.
So, despite worries that the rumour mill would start grinding, as we know it will and that people would be saying we were making a loss, doing awfully and about to close (some folks just love to spread bad news even if it’s not true news) we decided to come clean.
Hello Art House tribe, we said. Look at this frikkin’ graph. Look at that target we haven’t hit – can you help us get to it? Can you all chip in a fiver, more if you can, less if you can’t, to help us get there?
And you have.
In less that 24 hours we’ve had people popping in with fivers, tenners, more and our Paypal donation account is looking healthier already.
This is what community is all about – asking for help not just in a crisis, but when it’s necessary, when the pinch is being felt. It feels good and it feels right.
Yes, we’ve had somebody question about why we didn’t budget for our VAT bill (we did, actually, thanks – but this heatwave was not planned for by, you know, anyone!) and a few other odd remarks here and there. Some people won’t understand what’s going on, or will put their own interpretation onto it.
There will of course be much exaggerated rumours of our demise, and wise advice from armchair entrepreneurs on how we could have avoided this situation in the first place.
We think all of that will say more about those who just don’t ‘get’ it, than it does about us, to be quite honest.
It’s proved to be a handy way to thin out people who are following us to criticize instead of support (don’t you just love that ‘block’ button?!).
They are in the tiny minority, those people.
For the most part, the support has been overwhelming – and we focus on our supporters, we always have. You are the ones we are here for, you are the ones who we listen to, you are the ones who matter to us.
We’re modelling and pioneering a new way of doing business. A way that throws out the old competitive, secretive, BS-ridden version and replaces it with something more raw, more real, more… well… sometimes more scary and rough around the edges.
We would not have it any other way.
Please join our mailing list and come to see us soon!