1-4 stopped, even reversed. The only way to succeed from this point was to operate at a profit. Debbie not only had inadequate knowledge of accounting, no understanding of profit versus cash flow, inaccurate calculations of costs, and nonexistent internal controls, but she truly believed that she did not need it. "I'm an artist. I want somebody else to do that stuff" she said. DISCUSSION QUESTIONS What is the difference between profit and cash flow? Where might Debbie Dusenberry find help to save her business? 3. Does a good accounting system guarantee entrepreneurial success? In what ways does an inadequate accounting system impede entrepreneurial success? PLZ! 1 2 4 Focus on Small Business: Debbie Dusenberry and the Curious Sofa The Curious Sofa was an off-beat but beautiful store, filled with one-of-a-kind items. The store was designed to look old with a black-and-white color scheme, columns made of used brick and distressed plaster, and a ceiling of antique tin tiles. All in all it was a for-real incarnation of Edwardian design. But then what would you expect of a store named after a novel by Edward Gorey, whose works (like start of PBS's Mystery) exemplify the Edwardian period?? Debbie Dusenberry created the Curious Sofa just as we have encouraged our students not to do. She had no business plan, no specific measurable busi- ness goals, no regular reports of how the business was doing. In other words, she largely ignored the business aspects of her business parkerphotography Stock Photo That said, Debbie did do many other things right. She worked hard, spent long hours, and built on skills she had gained through years of designing sets for television commercials and working as an art director for movies. Her talent for choosing just the right antique (and sometimes just the right old thing) soon made Curious Sofa the go-to place for top design- ers. Debbie and the Curious Sofa were the topics of articles published in the New York Times, Forbes Small Business, Romantic Homes, Better Homes and Gardens, and incredibly, in The National-Dubai, a newspaper for expats in the Mideast. So, it came as a shock when Debbie realized that her business was failing. Her first surprise came after she had moved into a location twice the size of the original shop. She wrote in her by-invitation- only blog, "If my sales were up 15 percent, why did I take a 20 percent salary cut three months ago when the rest of my staff got their raises?" The next shock came with the recession This year sales are down 28 percent, and it is killing me. I have laid off much-needed help. cut salaries, cut expenses, juggled the numbers so much I am OVER IT. I have laid my busi- ness out there naked to the landlord, my bank and advisers. Debbie was at that crossroad where many entrepreneurs meet failure. She had run her business for eight years without ever having created a business plan, without ever having analyzed the econom- ics of her business. She succeeded to this point by having phenomenal growth. But now the growth had
