Last September I set some ambitious sales goals that would finally make Curio City pay me a living salary. Then the economy fell off a cliff. Although running 33% ahead of LY is pretty good under the circumstances, it’s less than half of the increase that I had originally budgeted for 2009.
I need a plan to make up for lost time when the depression ends. So it’s time to explore something that’s been back-burnered for literally years: Finding a mentor from the Senior Corps of Retired Executives (SCORE). I hope that I can persuade an informed, technologically-literate retailer to read enough of this blog to understand who I am, what my company is about, and what my goals are…starting with this post.
I don’t have a boss. I don’t have a partner. I don’t have any coworkers or employees. I’m not into social networking. I don’t belong to any professional associations. I work in a complete vacuum. That suits me fine for day-to-day operations and short-term planning. I’m a loner, and I like it that way.
However, I want a growth plan ready if the economy starts to recover. I need expert advice on how much money to borrow, where to borrow it, and how to best spend it. It’s a bet-the-company proposition.
SCORE lets me ask for informed opinions without obligation. Finding someone with a relevant background will be difficult, but I can approach as many people as I care to try.
Incidentally, Dear Reader, if you have ideas of your own, leave a comment or send me email. There’s no reason insight has to come from a SCORE member.
1. To earn a living wage. My salary plus profit this year should approach $19,000. I want to earn $60,000 per year by 2012. In order to triple my 2009 income, I’ll need to triple my 2009 sales, from this year’s anticipated $67,000 to about $200,000 by 2012. I will need to average 12 sales per day by then.
2. To retain full ownership. Ideally I will remain a one-man, home-based enterprise (contracting for marketing and tech support, and eventually outsourcing order fulfillment). Ideally, I can avoid hiring employees or leasing commercial space. I will not cede any ownership to investors.
3. To sell Curio City Online and retire by age 65. My exit strategy is to retire 10 years after reaching goal #1, in 2022. That means either selling my business or hiring a manager to run it while I live off the profits. Since our meager retirement savings were devastated in the crash, and we’re not putting anything aside while Anne is unemployed, Curio City is probably our only hope for retiring.
The actual numbers needed to triple today’s business are not staggering. I don’t need hundreds of sales per day or millions of dollars a year. Let me be explicit about this: I do not want to grow too much too quickly. I value my time and my sanity more than I value money. I think that I can handle a $200,000 business by myself without destroying my quality of life. Overshooting that goal would overwhelm me. Perhaps I’ll want to grow large someday, but definitely not now.
How I Can Reach Those Goals
Achieving major sales increases will be the easy part. There are three ways to approach that:
1. Increasing overall traffic. I now rely exclusively on search engine traffic: pay-per-click advertising at Google and Yahoo drives paid search results, and my own amateur efforts at search engine optimization (SEO) drive natural search. I should be able to triple traffic by (1) hiring a marketer to strategically place some professionally crafted advertisements; and (2) hiring a SEO professional to raise my profile for maybe half a dozen key products. How do I actually choose these experts, and how much should they cost?
2. Increasing conversions. To increase the percentage of shoppers who buy something, I could offer more and better things to buy (invest in inventory), and improve my store’s design and my website’s performance (invest in technology). Free shipping would certainly boost conversions, but how can I possibly afford to do that? You need to ship lots of packages before you can get deals from the carriers. Finally, I could subscribe to one of those seals (like McAfee Hacker-Proof or whatever it’s called) to enhance the perception of security. They claim to deliver an average 14% sales increase, although I’d expect less than that because my GoDaddy seal already gives me some benefit.
3. Increasing the average sale. This would mean either selling more things to each customer, or selling more expensive things (or fewer cheap things). Some of the same tricks that convince people to buy will also encourage them to buy more. Free shipping on purchases over $x is one obvious idea. I could also stop carrying things under $10; cheaper items are often more trouble than they’re worth.
According to Google Analytics, Curio City received 58,551 visits (4,875 per month or 160 per day) between April 2008 and April 2009. 1,237 transactions produced a conversion rate of 2.13%. The average sale was $47.96. I think that both the conversion rate and the average sale are pretty good by ordinary gift shop benchmarks. So I should emphasize increasing overall traffic without degrading its quality (by poorly targeted mass advertising, for example), and thereby lowering my conversion rate and average sale.
Let’s stop there for this week. Next week: Challenges and logistics.
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.