Blue Elevator Blog

Black Friday

Black Friday.  My earliest memory of this term was when I was a student in the school of business at Cal State University, Fullerton.  It was sometime in the 1980s.

I really had no idea as to the meaning of the term.  I was young (e.g., hadn’t been around that long) and I was a young man (e.g., typically not the demographic of a serious retail shopper).

Black Friday – the meaning

Accordingly, I could only hazard a guess as to the term:

• Black – since it was dark when stores would open.
• Black – since it was the day after Thanksgiving and one should be resting – not shopping.
• Black – something evil (e.g., like spending more money than you have to spend).

Black Friday?  I really had no idea.

Black Friday – a primer

I don’t remember the day, the class, or the instructor, but I would learn the (real?) meaning of the term.

You see, it comes from an old school accounting term.  And, since I was an accounting major, I thought I had better take notes, so to speak.  The term stuck.

Old School Accounting:

• Red ink.  Red ink means that the bottom line of your P & L (e.g., Profit & Loss) or Income Statement is in a negative position.  This means that expenses exceed revenue.  Translation: A bad thing.
• Black ink.  Black ink means that the bottom line of your P & L (e.g., Profit & Loss) or Income Statement is in a positive position.  This means that revenue exceeds expenses. Translation: A good thing.

Counter-intuitive?  Maybe.  It seems that in accounting terms – black is actually a good thing.  Why?  Just because.  It was the same reason we would learn that debits to Cash are good and credits to Cash are bad.

Black Friday – it’s not about you, actually

And, so, our professor would lay it on us.

Black Friday, traditionally, was that particular day of the year when retailers moved from the red into the black.  And, since you are equipped with the basic accounting above, here are the take-outs:

• For almost a complete 11 months of the year, a retailer would be “in the red.”  This means that expenses exceeded revenue for almost 11 months.
• Black Friday would be that longed for – fateful day – when the revenue would finally catch up with expenses.  Meaning, on the Friday after Thanksgiving, the retailer would finally go “in the black.”  It would finally become profitable.

Black Friday – isn’t so bad after all

If you are a business owner, Black Friday isn’t so bad after all.

Unless, of course, it is true for you.  Can you imagine working hard for almost 11 months to finally realize a profit?

In the example above, this means that a retailer’s entire profit for the year would be contained to the last Friday in November up to Christmas Day.  Depending on the year, you would have maybe 30 days to make your year.  And, perish the thought of all the returns that happen the week after Christmas to finish the year.

Finish Strong – start stronger

If you are a business owner, Blue Elevator™ hopes that you finish the year strong.

But even more so, we hope that you start next year stronger.

• Would you like to go from red to black?
• Would you like to go from red to black sooner?
• Would you like to pursue always being in the black?

So, from now on, when you hear the term Black Friday we hope you think of Blue Elevator™.  If that sounds good to you, we’d invite you to contact us.  God willing, we can begin a conversation about making the best of your next 12 months.