As of today, we have closed Fumee’s doors. After a lot of research over the last few months, we found out that we will actually come out ahead financially to close rather than to sell the business. A bit surprising, but true given various complicated factors I won’t go into. I want to take some time to tell my story, and offer a bit more explanation for my customers and supporters. So here we go…
Fumee has been around for four years now, and in that time, I have learned so much. Much of what I learned compelled me to close Fumee. So let’s start there, with the “why.”
There’s no “one” reason we’re closing. Like anything in life the thinking behind this is complex and layered. Some of the reasons are personal. For example, I realized pretty early on that retail was not something I actually enjoyed. As the years passed, and my business acumen grew, I started to yearn for a different type of business, in a different industry altogether. However with a full time job plus running Fumee, it wasn’t feasible to start thinking about another business. I want to move on, and to do so means I need to close this chapter of my life.
Another thing I learned is that although I chose the business I did because of my deep passion for cigars, I didn’t think of the lifestyle implications of owning a brick and mortar. I naively thought I could hire a manager to run it for me and move off to Europe, cashing in my passive income and enjoying life as an absentee owner. I know now that was extremely unrealistic. My ultimate goal in life is to travel, live in Europe and be somewhat nomadic. Fumee did not mesh with this. In fact, Fumee basically sentenced me to live in Texas for as long as Fumee existed, and I no longer wish to live in Texas.
The final personal reason is that I lost my passion. People say you should do something you’re passionate about, but I discovered that when I turned my passion into my work, I started hating it. Instead of associating cigars with something pleasant, I associated them with stress. I actually no longer enjoy cigars like I used to.
Those are the personal reasons, but there are practical ones as well. The first and foremost being: the point of owning a business is to make money, and if you’re not making money, there is no point.
Fumee was not profitable, and as such, was more of an expensive hobby that I was subsidizing instead of a business. This is really the only reason I need.
In spite of not being profitable, we pushed on for years. We did this because we thought we could turn the corner. This was not unrealistic, retail businesses typically need many years to turn their first profit. However, it was only very recently that realized we would never turn that corner, and the reason was because of our fatal mistake: we started Fumee underfunded.
This is perhaps the most valuable lesson I learned. When we were starting Fumee, I had a very hard time getting funding, but I was determined to do it one way or another. We finally did get an SBA loan, but it was woefully small. We were crippled before we even opened our doors. I think we started Fumee with about $75K plus some credit cards. This meant that we were never able to buy enough inventory to make the business profitable. We thought eventually this would correct itself, but we couldn’t ever keep up. It became the chicken and the egg: we could not get sales up without more inventory, and we couldn’t afford more inventory without an increase in sales.
There are a lot of details and nuance here. I will write about this more in other posts. The mistakes we made, the lessons I learned. The frustrations we faced. The difficulty of running a small business.
But ultimately, I know we are making the right choice. It became clear we were throwing good money after bad and it was time to cut our losses and move on.
I am leaving Fumee with a deep respect for any and all business owners. No two ways about it: owning a business is HARD, no matter how simple the business seems. There are a million things to do at all times. The cost of operating is staggering- we were spending $12,000 a month on bills, taxes, payroll, etc… and that still wasn’t enough to keep up. I am also leaving, well, screwed. I will take a big financial hit in the closing process. I never made one penny off Fumee, and I gave it four years of my labor.
But in spite of this, I have no regrets. I received an education that rivals everything I learned getting my MBA. I am wiser. I learned a ton. I learned a lot about myself. I learned a lot about human nature. I got to try my hand at my dream and will never have to wonder “what if?”
This is a bitter-sweet moment. Part of me is sad and depressed- this is my baby that I nurtured for five years. It’s hard to let go. Part of me is stressed- the process of dissolving the corporation and losses we face due to business debts is overwhelming. But I am also excited and happy. I am gaining back tons of time into my daily life. I am reducing my stress. I am starting a new, fresh chapter and I can’t wait to see what’s to come.
So what happens next? Well, for me personally I am hoping (planning?) to leave Austin. Where will I go? I don’t know. I have to explore the possibilities that PayPal has for me to transfer. It’s probably the first time since I was 14 years old that I don’t know exactly what I am going to do next. I’m on a journey and I plan to enjoy the ride.
I’d like to close this by giving a big thank you to everyone who was a part of Fumee. The investors, the employees, the customers. I met some amazing people on this journey, and I will treasure these experiences. For any customers reading this, I hope you will keep checking back- I plan to start blogging more regularly, and to offer more insights on the rise and fall of Fumee. You can keep up with me and my new adventures here.
It was fun,
Heather



