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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.
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Friday, January 18, 2008

Curio Metropolis Revisited

This week’s post is long. Go get yourself a refreshing beverage. I’ll wait.

Surprisingly little has changed since the first time I wrote about this, more than one year ago. Begin by reviewing.

With much expense in time and treasure, I achieved about 90% of my first 2007 goal, absorbing the Sunshop 4 upgrade. Turnkey is still releasing at least one major patch per month; I read their support forum almost daily to catch bugs and undocumented features (which would be all of them; there is no doco at all). And circumstances kept Eric from finishing my scaled-back implementation list. So I’m still going to be absorbing Sunshop 4 for several more months before it settles into a stable “finished” state. I do, however, have a brand new look (although not as attractive as the old one) with more advanced functionality (if only it all worked as designed). That’s certainly progress.

My second goal, finding a new developer, fell through when the two candidates whom I mentioned a year ago both withdrew from consideration. I’ve had no new leads since then.

I never got to my third goal of starting some modest search-engine optimization (SEO) because it depended on the Sunshop upgrade. I could theoretically pursue that now.

The original idea behind Curio Metropolis was to first achieve the three goals above, and then implement parts of my original 2005 design. I have since abandoned large chunks of that as impractical, but several key features would still define Curio Metropolis. I’m no closer to that than I was a year ago, and I still face the same hurdles. Now I’m also considering the “Steady As She Goes” version, which has the distinct advantage of being attainable. Both Curio Metropolis and Curio City Offline are both too big for me to tackle without outside help and knowledge that I don’t possess. Even though sales are slowing as the recession gets a grip, they’re still outpacing LY sufficiently to keep this idea on the table.

Steady As She Goes is doable with little or no additional startup money. It does not require much expertise that I lack. It continues the bootstrap approach that I have employed from the beginning, and I prefer an evolutionary strategy to a revolutionary one. It remains feasible as a low-overhead home business for at least one more year, and possibly two. I remain comfortably in control.

On the down side, the potential payoff is modest at best. Recession makes it unlikely that January’s strong start will bear up all year. But the downturn will affect me regardless of the path that I take. Let’s face it: I don’t sell necessities.

Here are the steps that I can think of taking to achieve it (and dear Reader, if you have any suggestions, by all means leave a comment):

- Find and hire a new developer. My annual development budget is very modest, so I need someone who, like Eric, charges a reasonable hourly rate and is fair and honest about his fees. The tasks that I envision for this new contractor are probably within my planned operating budget:

o Finish my punch list – any items that Eric leaves undone.

o Perform future Sunshop upgrades in a timely fashion.

o Apply some minor appearance tune-ups (color changes and layout)

- Find a search engine optimization (SEO) firm or specialist who can evaluate and tune up my site for a reasonable price, as a one-time effort. Continue to read up on SEO myself, and use Sunshop’s new Meta tag abilities to improve page rankings on my own.

- Find one new product comparable to my Panther Vision caps, and one or two steady but unspectacular new lines comparable to golf balls and Switchables.

- Find someone who can advise me on marketing and advertising. I’ve had so little success with this in the past that even a small improvement should bring a big payoff.

- Investigate various seals and endorsements and whatnot that I can display on my site for little or no money – things like the BBB Online seal of approval.

- Contact someone from SCORE (Senior Corps of Retired Executives) for (free?) general feedback and business advice. I am a little skeptical that a retired person will be up on e-commerce and web technology, but I’m sure that his or her general expertise would be valuable.

The minimum goal is to achieve the 25% growth that I have planned for 2008. Exceeding 50% growth would be a wild success.

Curio Metropolis is the same idea on a big scale with high stakes. It would take all of my remaining startup cash (which still might not be enough). I’m not prepared to seek financing until my cashflow is stronger. I lack the technical knowledge to evaluate the high-priced experts that I need to hire. I lack the time, attention, and expertise to accomplish so much by myself while continuing to run my existing business. My chief concern is that this is simply too big for one old man to handle. Does that mean finding a partner and giving up some ownership? I don’t know. I definitely don’t want to do that.

The only real argument in favor is a substantial potential payoff. I could be earning decent money from a much larger business within a year or two.

Here is the punch list that I can think of:

- Find a developer who will work on a project contract basis, and who is capable of creating artwork. What will this developer do?

o Create and apply new custom graphics (textures, templates, and some small simple Flash or Javascript animations)

o Implement a few key features of my original design (sorry I can’t specify these without tipping my hand to potential competitors)

o (Junk Sunshop and create a new e-commerce engine from the ground up?)

o Introduce some basic “web 2.0” technology – video, polls, etc.

- Hire an SEO firm for ongoing, regular optimization.

- Find several major new products and advertise them heavily.

- Outsource marketing and advertising to a professional on an ongoing basis. This is probably the biggest single expense; marketers make big bucks.

- Outsource product photography, or acquire proper photographic equipment and facilities (a white box and floodlights)

- Hire a consultant to develop a better action plan than the vague one that you just read.

- Find cheap commercial space for storage, shipping and receiving.

- Hire seasonal shipping and receiving help, or figure out how to outsource it entirely.

The objective is to increase business fivefold (halfway to the ultimate level that I need).

Hitting the wall:

Under either approach, volume will eventually outgrow my ability to handle it. Moving Curio City out of the house requires a quantum leap in my cost structure. I’ve been saying that my sales must grow by an order of magnitude to pay me a comfortable living wage. If you add in rent, utilities, internet, insurance, maintenance, etc. sales have to exceed that tenfold increase.

How do I afford all of these new expenses before I have the cashflow? And how do I achieve the cashflow without making the investments? It’s a chicken-and-egg problem. Steady As She Goes postpones and slows the reckoning, so that I can face it gradually and alone, in the manner with which I'm comfortable. Curio Metropolis puts it front and center, where it needs to be addressed immediately.

Commercial rents south of Boston are terribly expensive. Even the most rudimentary space in an industrial location is likely to run $1,000 a month, minimum -- if I can even find such space near my home. I need to investigate what’s available and get firm pricing, rather than just pulling numbers out of the air. In order to justify its costs, the facility needs to generate or enable sales that would not otherwise occur. This always leads me to consider over-the-counter sales, which inevitably implies a storefront, which quickly balloons into something approaching a full-blown Curio City store.

I need to either find a way around this, or embrace it.

There are order fulfillment services. I don’t know anything about them except that they exist. You rent space and labor in a generic warehouse facility, and somebody else handles all of your shipping and receiving. Is that more economical than renting and staffing my own space would be? What about quality control? Is it appropriate for a retailer (as opposed to a manufacturer)? I will need to investigate this.

Smashing the wall:

What if, instead of moving Curio City out of the house, I had a house that was bigger and better configured for business?

Curio City World Headquarters is located strategically in an upstairs closet. My “warehouse” is a cramped, cold, poorly lit, dirty storage area in a cellar that has been known to take on water. I have no space on the first floor, where egress to my too-small car is, so filling orders involves a lot of running up and down stairs. I could probably make my procedures slightly more efficient, but not enough to matter in the long run.

Suppose I had a house where all of this took place in one big room, or two contiguous rooms on the same floor? Suppose the “warehouse” room had access to something resembling a loading dock (e.g., a garage door or porch)? Suppose I could keep my products easily accessible, rather than having to burrow through boxes to fill orders? I could increase my efficiency considerably.

This would not eliminate forever the need to rent commercial space, but it might postpone it until sales volume grows enough to justify rent – thus giving Steady As She Goes a big advantage. If my work rooms were isolated from our living area, I might even be able to bring in seasonal help.

It would have the additional major bonus of upgrading our living quarters and making my wife very, very happy.

This audacious idea has obvious drawbacks. The housing market is in freefall, and likely to get worse as the recession deepens. Trading up before the bottom is in sight would be financial suicide. If I put the rest of my startup money toward a down payment, I am definitely locked into Steady As She Goes. We don’t have any money to prepare our old house for sale (although we could use our home equity line if we could count on paying it off when we sell the house). Shopping for a house with a business in mind seems short-sighted when that business will probably still need to move out after a two or three years at most. Finally, further entwining the fates of my home and my business makes me uncomfortable. With so many reasons that this is a bad idea, why does it still appeal to me so much?

I probably need to move Curio City out of the house either this year or next, whether I like it or not. Curio Metropolis would mean doing it by late Fall, if I can miraculously get that ball rolling by early Summer. Steady As She Goes buys me another year, or possibly two, and keeps the idea of a house upgrade in play; the huge drawback, of course, is that I remain poor and dependent on my wife for a couple more years while Curio City grows slowly (but with little risk).

Sorry to disappoint you, Reader. All of that verbiage led nowhere. Next week I’ll shine the spotlight on Curio City Offline, probably with equal ambivalence.

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