Welcome to Curious Business

Every Friday, I post a small insight into running Curio City. 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 29, 2010

Economics 1001

The end of the month brings numbers, and numbers bring contemplation. At least, they do for me. Here are January’s results:

Total income: -0.2%
Total COGS: +15%
Payroll: +45.2%
Net Income (Profit): -150.4%

Cost Of Goods Sold is high because I wrote off $250 worth of greeting cards. Payroll, of course, is money in my pocket right now, so that’s good. Net income is tax-advantaged money in my pocket later on, so that’s bad. Some of that damage is from going way over my advertising budget, but most of it is obviously from taking the money in payroll.

Where’s the 15% sales increase I was looking for? Let’s spin the numbers and see if it flies out. My Excel spreadsheet makes the month look better (about $100 above LY) than does QuickBooks ($8 below LY). A couple of decent sales in January's remaining day and a half could still save it. Finishing ahead of LY at all is impressive considering that last January included a $1,200 sale; if you subtract that from LY’s numbers, you can pretend that this January beat LY by 30%. Pretending is fun!

February ought to be an easier target as I finally come back into stock on some key things (yes, Whisky Stones and 5-LED camo caps, I’m counting on you) that manufacturers were very slow to replenish.

Now let's spin the big picture.

Nationally, December’s economy was dreadful. I doubt that January will look any better. In the past week Verizon announced 11,000 layoffs, Macy’s is cutting 1,500 jobs, and Home Depot’s shedding 1,000. Only the tens of thousands of people who drop out of the workforce each month keep the unemployment rate from skyrocketing. With Obama’s newfound deficit evangelism, the federal government probably won’t keep propping things up for very much longer. My spin on the national economy says that the current “recovery” is statistical only, and we’ll revert to recession by fall. And yet, some corporations are reporting good Q4 earnings (more from draconian cost-cutting than from healthy revenue increases) and the stock market inexplicably remains elevated. The lords of capitalism must see bright spots that aren’t visible from down here in the trenches.

Locally, the housing market is struggling up off the floor. The Northeast is fortunate to have mature housing stock without a lot of new construction. We don’t have the large suburban tracts of McMansions that plague other areas, so the housing sector is better off here than elsewhere. State tax collections are up slightly and, thanks to about a billion and a half rescue dollars raining down from Washington, the governor has promised not to cut local aid. He is threatening to tax my beloved cigars to death – a $2 cigar that currently costs $2.67 would rise to an outrageous $4.45 -- but the legislature probably won’t let him get away with that (and cigars will become unattainable for me anyway when our household finances collapse). New restaurants are replacing a few of the dead ones. My spin is that as long as the federal dollars keep coming, our state and town will bump along in neutral.

Personally…well, as you can see, my Curio City paychecks are growing, but they still don’t attain minimum wage during the slow months. I don’t want to borrow any of the $30 billion that Obama wants to loan small businesses. His proposed tax credit for raising wages might be amusing if it reduces the tax owed on my K-1 income – I would consider giving myself a raise if it brings a tax break. My spin says that only reinvigorated consumer spending will get Curio City moving; I don’t see most Americans inclined to start buying unnecessary stuff yet, notwithstanding Apple's latest iThing.

Worst of all: Anne’s unemployment benefits end today. We’ll learn next week if she gets any more extensions. If not, we no longer have any reliable income. I don’t dare to spin this one yet. It would be catastrophic.

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I thought that some of my Facebook fans might hammer me after the Simplaris Blogcast app posted last week’s controversial political diatribe to my FB wall. But there was only silence. The blogcaster apparently stopped working two weeks ago. When I tried to update posts manually I saw: “Application Simplaris Blogcast sent invalid response. There was an application error. Please try again later.”

Later never came. After thrashing around for three hours I’d only managed to remove it from my Curio City page and add it to my unused main account page. Flailing for another hour the next day somehow got it working properly again – I think. Every time I check up on it, I have to reactivate the app as if it were never installed before – it just doesn’t seem to “take”, as if FB is not saving it or something.

Nothing on Facebook ever works the way I expect. Because my Curio City page is a sub-page of a personal account that I never use, I can’t even find it without using my bookmark. Everything defaults to that unwanted parent page. (FB wouldn’t let me create a new account with Curio City as the main page, and I would lose all of my fans anyway if I did that.) Whenever I finally do trick some new plugin into working, FB developers change some little detail somewhere and my apps fizzle out – my Twitter feed app has stopped working twice, too (not that I care about Twitter).

Working in software development for almost 10 years taught me to recognize a crappy user interface when I see one. And I certainly see one on Facebook. Well, I have no choice but to keep wrestling with it. FB will eventually reach more people than my newsletter and this blog put together.

Friday, January 22, 2010

Not My Cup of Tea

I couldn’t sleep Tuesday night after Republican Scott Brown won Ted Kennedy’s Senate seat. The ground trembled as hell froze over and poor Teddy spun in his grave, and the wailing of the damned echoed all night. Wednesday morning I cowered indoors like the other survivors, peering fearfully out my window at the shattered political landscape. Zombie Democrats staggered blindly through the rubble, searching in vain for brains (having long since depleted those of the Coakley campaign). Mutant Republicans emerged from dark burrows, blinking their little pig eyes and cackling with joy at condemning 30 million uninsured Americans to early deaths.

OK, maybe it wasn’t quite like that. On Wednesday morning the sun rose in the east. The Boston Globe waited on my front porch, crammed with verbiage trying to make sense of the apocalypse. The electricity was still on, the furnace worked, water still flowed. My cat had his breakfast and then went out. I had coffee.

Coffee always helps.

Don’t worry; you didn’t stumble into a political blog. I’m taking this detour because I’ve written about our health insurance struggles before (use the subject tags to see those posts), and because Curio City went to sleep as everyone’s Christmas credit card bills came due last week. Last year’s numbers were fattened up by a single $1,200 sale; without a comparable lightning strike this year, January probably won’t reach LY’s numbers -- forget about my 15% planned increase. 2010 is not off to a promising start. But one big sale can always turn it around, and that sale could materialize at any moment. (While I was finishing this post a $120 order from France arrived; a few more like that would save my bacon).

So this week I’ll explore why Massachusetts fell for a Republican who’s sworn to use Ted’s seat to kill the cause of his life.

Voter turnout was heavy in the wealthy suburbs. Independents went overwhelmingly for Brown, who favors extending the Bush tax cuts for millionaires. These people with big incomes and generous health insurance plans and investment portfolios and fat retirement accounts feel threatened by the Democratic agenda. Turnout in the urban Democrat strongholds, OTOH, was weak as the machine failed to rally the lower-class faithful behind their deeply flawed candidate.

These rich suburbanites were seduced by something called tea baggers. Besides its sexual meaning (Google it if you dare), “tea bagger” is also an unfortunate name for a populist political movement. The so-called Tea Party is an anti-Democrat movement disguised as tax rebellion -- not really a party at all, but a loose confederation of libertarians, Republicans, and mad-as-hell conservatives who oppose Obama and progressive society. We paid them no heed here, thinking that these right-wing nutjobs couldn’t breach our liberal stronghold. Underestimating the enemy within was the Democrats’ first mistake.

Things are bad in Massachusetts. The unemployment rate rose 0.7% in December to its highest level since 1976. The Democrats raised our sales tax last year and extended it to alcohol for the first time. Beer is all I've got! Things are not getting better; in fact, with federal stimulus money drying up and the state’s rainy day fund gone, they’re about to get worse. There is a lot of unfocused anger and anxiety that naturally gravitates to whomever’s in charge. When the Democrats put forth an arrogant, dull candidate whose campaign strategy was to run out the clock and claim what was rightfully hers, they gave conservatives an opening. Many people think that Martha Coakley’s career as a prosecutor showed a knack for doing evil, too. (I voted against her in the primary and did not intend to support her in the general election until the seat was actually threatened). Martha Coakley was their second mistake.

We are not accustomed to competitive elections in Massachusetts. The Democrats didn’t know how to react, so they didn’t. Coakley came out of the chute too late with a barrage of mean-spirited attack ads and robo-calls – the same vicious tactics that cost Kerry Healey the governor’s mansion in 2006. Being obnoxious was their third mistake.

For their part, the Republicans had a charismatic candidate with a well-organized campaign and a populist image. They also attracted a crapload of outside money in the final week of the campaign. His main message – I’ll kill health care reform – was exactly what the teabaggers wanted to hear. If they can kill insurance reform, they can cripple Obama and bring down his whole presidency…presumably so that we can return to the halcyon days of the Cheney administration.

How Americans can think this is a good idea eludes me.

Somehow they turned the election into a referendum on the federal health care bill. That shouldn’t have been possible. Massachusetts enacted stronger reforms and achieved universal coverage four years ago. We had very little stake in so-called “ObamaCare”. Some liberals oppose it for being too weak – an expensive giveaway to the very insurance companies that we ought to be dissolving. But in terms of state and local issues, it should have been a sideshow.

OK, so what?

A year ago I might have joined the Brown bandwagon. I’m not a Democrat and Coakley makes my skin crawl, even though her politics line up with mine pretty closely. I have a long history of backing underdogs and political insurgents. I do, however, support Obama’s progressive agenda – remember that he was the underdog just 18 months ago. The health care bill wouldn’t affect me much, but it was a first step in an ambitious agenda that will reduce our oil dependence, fight global warming, lessen income inequality, and address a whole roster of social-justice issues that get conservatives lathered up. After the disastrous Bush-Cheney presidency, and under the spell of Sarah Palin, Republicans should’ve been locked out of power for a generation.

A year of unemployment and dependence on government programs have partly resuscitated my 1970s-vintage inner socialist, purely as a matter of self-preservation. I want unemployment benefits and COBRA subsidies to be extended for as long as the economy remains in the crapper, even if that’s years more. I wish that other Americans had a federal equivalent of the Medical Security Program that will reimburse 80% of our health insurance premiums for as long as Anne’s unemployment benefits continue. Without these liberal programs, we’d have severely cut our standard of living and spent down our retirement accounts. I would’ve had to fold Curio City to beg for a minimum wage job. I’m no hypocrite; I have to support the party that’s supporting us during these hard times. If that makes me a reluctant Democrat for the time being, then that’s what I’ll have to be.

What have the Democrats done for me lately? Congress extended the 65% COBRA subsidy by six months, retroactive to last November. We are expecting our first reimbursement check from the Medical Security Program any day now; our mortgage payment this month depends on it. Anne’s unemployment bennies were renewed through the middle of March. We’re solvent into April, and possibly even as far as June. But take heart, teabaggers: Our COBRA eligibility expires in August. The MSP will drop us when Anne’s unemployment benefits run out this spring. By then we’ll be suffering the way we deserve to suffer.

Maybe Anne will find a job before it comes to that. Never mind that Massachusetts employers destroyed another 8,400 jobs last month and drove the state unemployment rate to its highest level since 1976. Maybe the Democrats will come through in time with another rescue plan. The Republican now moving into Ted Kennedy’s chair makes that a little less likely.

In spite of our insecurity and my misgivings about Scott Brown, I’m taking a wait-and-see attitude. What else can I do -- move to a more liberal state? Perhaps some good will come of this. Perhaps strengthening the moderate, secular wing of the Republican Party will weaken the evil religious wingnuts. Perhaps the Democrats will focus on jobs and the economy before they take an even weaker stab at health insurance reform. Perhaps Democrats at the state level will straighten up and fly right. Perhaps having a friendly new Republican in Congress will blunt their "Party of NO" tactic of kneejerk opposition to every Democratic initiative.

Leaving all of that aside, a Senator’s primary responsibility is to bring home federal tax dollars. Taking out more than you paid in is all that really matters in the end. Kennedy was a master of pork; no conceivable successor could fill out his money belt (although Coakley might be ruthless enough to have made a good show of it). Some pundits say that having one foot in the enemy camp might open the federal spigot a wee bit more for us. I’m not sophisticated enough to understand how that’s supposed to work, but the idea’s out there.

Friday, January 15, 2010

Jewelry, Recycled

If the definition of insanity is doing the same thing over and over while expecting a different result, call me crazy: I rolled out a new jewelry line for Valentines Day. Bottled Up Designs ties in with my recycled products theme and might entice the Switchables demographic, too.

Jewelry is a low-risk proposition: I create pages, then sit back and collect money; the jeweler actually fulfills the orders. If it works out, I get a few high-end sales each month for very little labor. If it flops, all I’ve lost is my time, which is worth less than $8 an hour anyway. I spent the best part of last week creating pages for just half of the available products.

Previous jewelry lines all failed for one reason or another. Typewriter key jewelry started out well, but the supply of popular letters was limited – every typewriter keyboard has only one M key, after all; if you want a necklace that spells out “mom” you just depleted two typewriters. It died out when customers could no longer order the messages they wanted.

Then I tried a line of silver nature jewelry from Lovell Designs. Its main merit was that Anne likes it. It wasn’t particularly unusual and didn’t enhance the Curio City concept. The company was unenthusiastic about selling online, let alone dropshipping, and they didn’t communicate well. I finally pulled the plug for lack of interest. Their money clips and cuff links did alright (men’s jewelry being comparatively rare), but not well enough to keep the relationship open.

Switchables jewelry sells a piece every now and then, but not nearly enough to justify adding more styles. They don’t dropship so I’d need to tie up inventory dollars. I keep it alive for cross-marketing with their very successful night lights.

I negotiated for weeks to land a Morse code jewelry line that would have done very well, but the jeweler finally refused to customize and dropship her jewelry. Customization was the key to this concept’s online success, so that was the end of that.

This fourth attempt will be different. Oh yes, it will. It complements my other merchandise, commands a high (but not prohibitive) price, carries a good markup, and requires minimal work after the initial setup. The strange thing is I’ll probably never actually see any of this jewelry myself.


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An email from “Quest”, the Department of Unemployment Assistance’s new website, said that I had a message waiting in my Correspondence section. Well, it must be important if they felt that they had to send me an email telling me that I had email. Hmmm, nope; nothing there at all. Oh well, they no doubt want their money. Holy crap, did DUA ever make it hard to pay them! Quest is a program only a bureaucrat could have approved. The Department of Revenue site that slurps up my other state tax payments is much, much easier to use. Oh well, at least the amount due came out right to the penny. I’m a little nervous that I now have to report hours worked, since I’m below minimum wage for three quarters of the year. I guess I’ll just have to divide my total pay by $8 to figure out how little I should have worked each quarter.

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The blogcast thingie for Facebook looks like it’s working (props to Dave for suggesting it). I’ll try to jazz up my lead sentences now that they’re going to appear before my FB fans every Friday. In the interest of perfect entanglement here’s a link to the blogcast tab on my FB page. I can't see why anyone would want that, but I'm being thorough.

New readers: “Curious Business” is about the weekly ups and downs of running a home business. It’s not a marketing tool except inasmuch as it converts the rare new Curio City groupie. You’re reading my 183rd post since I started blogging in 2006, so you can trace the whole history of my company if you’re a masochist. My posts are sometimes tedious and narcissistic, but they’re always candid.

Friday, January 08, 2010

What About Facebook?

This week just brings a few random thoughts.

I got these brief replies when I asked my Facebook fans (now 56 strong, woohoo!) how I could make my FB page useful and interesting:

• “New products”
• “there's a simplaris blogcast app that you can use to broadcast your blogs each week.”
• “Items that have gone on sale”
• “Sale items and seasonal merchandise”

I integrated the simplaris app today, but haven’t tested it yet. Hopefully this post will just magically appear on my store's FB page. Turnkey says they’re developing a FB plugin for Sunshop that would let me put my whole store catalog on my FB page. I need to see if Constant Contact can integrate my newsletters as well. I expect that they can, for a price.

I’m slowly forming an idea of FB as a portal to the Kraken Empire. I’ll post a biography and a company history and supplement that with a few photos. I’ll use those plugins to port content from my store and my blog to my FB page. And I’ll try to direct FB visitors to the blog and store. Actual news will be confined to wall posts, as I’m doing now.

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Charter.net recently joined Comcast in blocking email from Constant Contact. I only lost four newsletter subscribers this time. I hate seeing interested customers get blocked by overzealous ISPs…oh well, I’m sure Constant Contact serves up a lot of real spam. Maybe the blocked customers will join Facebook.

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I finally wrote off $250 worth of greeting cards and closed the department. I wanted to get this insult to my bottom line out of the way early. My wife was happy to inherit them.

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Speaking of the bottom line, sales were decent vs. LY but well short of plan. I realized that my 2010 accounting January has one less week than 2009’s January, so plan is kind of hard to gauge this month.

Might as well pay taxes. I spent two hours filing four returns for $1,897.42. I know that payroll and sales taxes aren’t Kraken’s money in the first place, but it sure did take a whack out of my checking account. And I’m not done: the state isn’t ready yet to accept my $300 in unemployment taxes and $456 in corporate excise. There’s also something called a Pass-Through Entity Withholding Tax. I think this closes a loophole for big corporations. I don’t owe it, but I still have to file a form.

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Thank me for greatly condensing this next bit; my first draft reported each line item to three decimal places. Instead you get this summary: Four budget items – payment processing, printing, write-offs/shrink, and shipping supplies – cumulatively came in about 1% under plan last year. Another item – customer discounts – was half a point over. If 2010 makes plan then the half percent in play amounts to $344. I put $250 of that into my web support budget and $65 toward computer hardware/software. The remainder can go to profit. By such baby steps does a business crawl ahead.

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.

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