Rukavina: We certainly expect that people are going to be tighter with spending this year, but we haven't really seen any of that. In fact, the first part of October, the beginning of our Q4 season, is right on track with where we thought it would be. I think that we have a product line and an offering that's really conducive to times like this. Q4 is our biggest season because of Christmas gifting because people are going to buy gifts for their families.
Are you having trouble finding funds or credit?
Sacriponte: We do have a line of credit, but we haven't had to tap into it. And, we haven't had to talk to anybody as far as getting further credit. It hasn't been a problem, I wouldn't be hesitant to tap into it, but we haven't had the need to as of yet.
Bachmann: We put in place a credit facility with Silicon Valley Bank back in June for the first time, and one of our board members and individual investors has provided a credit facility of sorts for a while, so we haven't had any trouble on the credit front. Silicon Valley bank is probably very insulated from the typical things since they are more of a traditional corporate lender. So they haven't had any issues. As a business we've been privately funded.
Pearson: We've never been a company that took enormous investment risks, like staffing up and adding 10 people at a time. We might add a couple here and a couple there as we take on new projects and as we grow, but not on a scale that would cause us to take a huge hit when we're in a situation like what we're currently seeing with the economy. We've always been more of a circulation-driven magazine, so we haven't seen the effects of the ad market getting hit because we don't sell that many ads. That's never been the focus of what we're doing. Even though we've seen growth on the subscription front, it hasn't been that large, percentage-wise, as we saw last year.
Rukavina: We did our initial fundraising knowing that this could happen now. There's no question that the credit market has never been worse, meaning that doing lines of credit, anything dealing with loans and lines of credit, is very, very difficult right now. No one is immune to that. If you're looking for a line of credit, you will have difficulty. We haven't seen it effect iMemories, but we've seen it effect banking relationships and we know it to be the case.
If you had a magic wand, how would you fix the problem?
Sacriponte: The area -- knock on wood -- has not seen companies with widespread layoffs. I really hope we won't feel those ever, but I don't think it has hit this region yet. If it will, I think it will down the road. We also haven't had the level of the mortgage crisis as other parts of the country have had. It's not easy to sell a house in this area, but it's not as bad as other areas.
Bachmann: I'm not sure I'm qualified to prescribe that solution. It seems to be a crisis of confidence more than anything else and driven more by the credit markets than anything else. Like a lot of things, these things will pass in my view, but it's amazing how the psychology of it affects people. I think keeping a positive outlook and striving to do your job every day may be a solution to everybody. Just avoid hitting the panic button.
Pearson: I am big believer in this being largely psychological. The bailout package may not be enough and it probably won't be enough, but I think that it was thinking in the right direction. We have to do something to get credit flowing again and to restore consumer confidence. I wish I knew the answer to that. Reading some of the plans that Warren Buffet has talked about in recent weeks, many of those sound appealing to me. Allowing private investors to get involved and be the JP Morgans of today. I think it will take more than one individual. As far as the markets go, I think there's a very real problem. It was not an imaginary real estate problem, and it's a very real credit problem. I hope that if we finally reach a bottom, we can turn this thing around and people will start to spend more.
Rukavina: It's a really complicated matter, and you're seeing the best and brightest really struggle with this one. Somehow or someway, these banks need to begin lending again. As I watch the news, I'm hopeful that this government intervention lubricates this entire system. I think it's going to be good for everyone. I'm like any other business owner who watches and observes, but who doesn't have the power to participate. Any small business owner wants the environment they compete in to be good, and it's certainly not a good time. It's really a time when you're going to have to pull out your best game plan and really up your level of effort, and be extremely wise about your decisions.
