Ending 2011...Initializing 2012

I promise that this will be my last boring numbers post for awhile. My year-end profit-taking was based on these stats as of mid-afternoon on 12/31. Being only slightly different from what I posted last week, they’re just for my own reference. You’re invited to skip down to the forecasting part.

Excel says that I beat LY’s net sales by 4.41%. The year came in $3,100 below plan.

Quickbooks says:

December: 

Total income: +0.6%
Total COGS: +4.2%
Payroll: +11.3%
Net Income (Profit): -3.2%

2011 Total:

Total income: +2.3%
Total COGS: +2.5%
Payroll: +2%
Net Income (Profit): -4.8%

My profit was $2,950 (down from $3,100 LY). I withdrew 20.3% for income taxes, or $600. Of the remaining $2,350, I pocketed the traditional 75%, or $1,750 (plus $600 for taxes = $2,350). 

My salary was $12,718. My total 2011 compensation (salary + gross profit) was $15,668. That’s $509 below LY’s $16,177. My high water mark was $16,737 in 2009. 

Advertising was the killer, up a whopping 27% (or $1,700) over LY. Advertising is now running at more than 11% of gross vs. a budgeted 9.5%. Reducing that expense will be hard when competitors keep bidding up my keywords; I’ve already surrendered Page One placement on a lot of words. I was still getting 200-250 visitors a day last week at a cost of $25-30…which would be marvelous if they were dutifully spending the expected $250-300. They weren’t. In fact, most days this week were in double digits.

This is going to take some finesse. For now, I’m just cutting my bids by a few cents a day, but that’s potentially self-defeating. This year I’m going to add another line to my monthly numbers reports: Advertising Spend.

So…how’s 2012 look? 

What economists like to call “headwinds” doomed 2011’s planned double-digit increase from the start. First, USPS’s rate restructuring broke my shipping tables for three days. Mochahost’s always-marginal service gradually deteriorated into no service at all by May. After a promising start, Hostgator shut me down twice due to “excessive” server use (meaning they run overloaded servers). I lost at least $1,000 worth of business to substandard hosting before I finally came to roost at MDD Hosting. I can’t recommend MDD highly enough. If you need reliable, affordable shared hosting with excellent support, use my affiliate link to sign up today. Curio City has not suffered any measurable downtime since mid July.

There was no engine to fight these headwinds. I didn’t have any major new products or any lucky marketing or media events to drive sales, and the economy was stuck in neutral for the first 10 months of the year. I only eked out my 4.41% gain because the American consumer rallied in November and December (and Quickbooks, as we see above, says I only gained 2.3%).

This year I’m planning a 7.5% increase – nearly double last year’s gain, but I believe it’s achievable for five reasons. First, I don’t foresee major technical problems (not that I foresaw them last year, either, but never mind that). Second, I expect a slowly strengthening economy and more confident consumers unless tea party Republicans successfully torpedo the economy or the Republican presidential candidate ruins consumer confidence. Third, I have a whole year to find a killer new product or line. Fourth, I can’t possibly get less free publicity than the one failed media mention that I had last year, so there’s nowhere to go but up from there. And fifth, the percentages don’t involve a lot of dollars. LY’s year-over-year increase was just $2,750. This year I’m looking for $4,850. A $2,100 increase in my increase isn’t trivial, but we aren’t dealing with megabucks here. Two or three big B2B sales, or one major hit product, would do it.

To motivate myself, I will raise my salary from 20% of net sales to 20.1% if Excel says that I am ahead by 7.5% in July, and to 20.2% if I make the year. 

Next week I’ll mull over some specific goals. Right now I have grunt work to tackle. I really ought to trash out my office. I’d like to rearrange the cellar to condense some boxes and make some room. I need to issue my W-2. I should place some reorders and small new-product orders with Valentines Day in mind – I’m holding off because tax deposits and payroll have already reduced Curio City’s checking balance from over $10,000 to just $5,100; with $4,900 worth of credit card bills already in front of me, I have to wait until the next statement period starts on the 12th. But if I hold off too long, I’ll miss Valentines Day (not that that holiday has ever shown me any love).