Welcome to Curious Business

Every Friday, I post a small insight into running Curio City and/or Blue Hills Editorial Services. My most recent posts are directly below. You can also start with the first post, or use the subject labels to the right to home in on particular topics. Feel free to comment on anything that interests you.
Add to Technorati Favorites

Friday, January 26, 2007

Possible Future 4: A Curious Hobby

It’s a good thing I’m not superstitious, because mentioning failure is probably a jinx. My wife has been patient and supportive of this venture right from the start, and she remains so; I have hardly contributed a dime to our household budget in the past two years. But she has career ambitions, too, and carrying the financial weight for both of us retards her own goals.

This is why I have startup phases with success criteria. Phase 1 was simply forming a corporation and putting all the systems in place to open a web store; that was completed in November 2005. Phase 2 was learning the basics of online retailing, the gift shop industry, website maintenance and related operational skills; testing and refining the business concept and the merchandise; and building a customer base – all without being under pressure to earn a profit. This ended ended after Christmas, when I finally had a full year’s experience behind me.

Phase 3 doesn’t actually begin until another infusion of startup cash becomes available in May. It is the first phase with an actual success criterion: By December 31, 2007, Curio City needs to show a profit of at least $1. Over the course of the year, it should pay me as much in salary as I will infuse in startup cash, making it revenue-neutral from both a personal and a corporate point of view. Last year’s experience enabled me to refine my costs structure (including a payroll cut for me). My revenue projection is double last year’s sales – which is ambitious, but not impractical.

If 2008 dawns on a profitable business, I’ll move into Phase 4 – securing a loan and expanding, so that Curio City finally earns me a living. That’s what Possible Futures 1, 2 and 3 have assumed.

Possible Future 4 is, quite simply, what happens if I fail.

My startup cash will be gone at the end of Phase 3. I will not take on debt to prolong a business that remains unprofitable after two years. So, should Curio City end 2007 with a loss, I will spend 2008 trying to become somebody’s wage slave again. I’d rather not explore that topic unless it starts to look necessary.

There are degrees of failure. In 2006 Curio City lost roughly 10% of gross sales. If I cut that in half to 5% or less in 2007, I could get by with a part-time job in 2008, and continue to entertain scaled-down versions of Futures 1-3. Only if I fail to improve substantially on 2006 will I take a fulltime job. Even then, I would not fold Curio City entirely. Instead I would continue trying to make it profitable as a supplemental income. If I have to take a fulltime job, though, Curio City will never be much more than a hobby.

Fortunately, the magic 8 ball says that Curio City will definitely be profitable in 2007, so the “Curious Hobby” future looks unlikely.

Forthcoming Topics:

  • Possible Futures 5: Exile On Main Street
  • Startup Phase 3 Revisited
  • Credit Card Processing

No comments:

Post a Comment

What do you think? Leave a comment.

Google Search