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.