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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 01, 2010

Beyond the Great Recession

Stats and spreadsheets are my favorite part of running a business. (I’m a manager, not an entrepreneur.) If you're not of similar mind, you might want to skip this post.

Here’s a fun one: In November and December I shipped 705 (44.7%) of the year’s 1,575 orders. December alone had 457 sales, or 29% of the year. Compare that to 64 sales in the entire month of July.

Thirty-one of those December customers subscribed to my newsletter. After tossing out the three Comcast addresses (because Comcrap blocks Constant Contact), that leaves 28 likely repeat customers.

I awarded myself my annual bonus. When I did my ciphering on Wednesday, the tentative bottom-line profit was $5,900. As planned, I took 75% of that and let Kraken keep the rest. My payout was $4,425; the other $1,475 boosts retained earnings (i.e., cumulative losses) from an all-time low of (-$12,243) to (-$9,478). Federal income tax on my $4,425 is about $885 and the state gets $295, leaving me $3,245 free and clear. I took my money as a loan payment rather than a shareholder distribution. (I went into great detail about this a couple of years ago, and I trust that it’s still valid.) The company now owes its shareholders (me) just $20,275 of the $28,500 that I originally put in.

Thanks for all your hard work, Ken, here’s your big juicy bonus. Get out there and stimulate the economy! Hah! I don’t dare to spend anything until Anne gets a job. I threw $1,000 at her consumer debt -- $500 to principle and $500 to cover interest payments for the next few months -- making only a tiny dent in the staggering total, but at least it's something. The remaining $2,245 went into my personal savings. In the above-linked post I mentioned wanting to replace my five-year-old gaming computer. That machine’s now seven years old, and I still want to replace it.

Moving big piles of money between accounts was fun. When the dust settles I should have $500 left in Kraken’s checking after all current obligations are met. I also stashed $4,000 in a new savings account for a cash reserve beyond ordinary operating costs. I do like having money in the bank.

Here are the numbers for this dreadful December. The month finished $1,500 below LY and a truly painful $4,500 below plan.

Total income: -8.8%
Total COGS: -7.2%
Payroll: -20.5%
Net Income (Profit): +18.9%

The raw “final” 2009 numbers:

Total income: +12.7%
Total COGS: +9.8%
Payroll: +20.4%
Net Income (Profit): +3.1%

So December wiped out half of my previous YTD 25% sales increase. More money went into my paycheck at the expense of the company’s profit (but both end up in my pocket anyway). The ultimate bottom line – dollars in my pocket – rose by 13.4% (from $14,758 to $16,737). 2009 ended $6,700 over LY but $5,000 under plan. I’m $34,000 behind my cumulative plan since 2006. “Plan,” of course, is just a number I pull out of my ass. I could just move the target. But that would be cheating.

Despite the weak finish, I’m content with 12.7% growth during the worst year of the Great Recession. Planning a 15% increase in 2010 still seems reasonable if the economy doesn’t crumble again when the government stops plumping it up. I aim to earn a smooth $20,000 in 2010.

The first sale of the new year was transaction #4,500, and it uncovered an inventory error (fortunately Excel and QuickBooks were wrong, and I had the merchandise). The second sale is going to London. International sales are 50% of my business at the moment – rather ironic in light of what I wrote last week.

Last item: A customer named gigi took the time to write: “love your emails. … you guys take a lot of time to make your content fun!” Aw, shucks. Thanks Gigi! I’m tickled to know that at least one reader enjoys my newsletters.


  1. I'm curious why you keep citing Federal income tax since you're effectively making minimum wage. Or does that come from Anne's previous employment?

  2. My income alone doesn't trigger the withholding tables. When combined with Anne's unemployment checks, part-time teaching pay, and freelance income, though, we're in the 15% federal bracket. Although I know that using tax withholding to enforce saving is illogical, I would rather get a big refund check in time for summer vacation than have to write a check to the Treasury. Our unreliable income stream makes it safer to put that tax money out of reach than to try to hold onto it until April.


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