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.
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Friday, July 31, 2015

July's Humdrum Numbers

The black month that I'd thought was in the bag has turned into another nail-biter. Quickbooks says that revenue's $124 in the red as of this morning while Excel argues that it's up by $37; the remaining day and a half might still persuade Quickbooks to go black.   

When Excel and Quickbooks argue, I always back Excel even though Quickbooks always wins in the end.

Whatever. Cash flow is king, and a lousy start to the week left me $200 shy of paying off Mastercard on time. Credit card interest is factoring into this year's numbers for the first time ever.


Total income: -3.6%
Total COGS: +3.3%
Payroll: -17.1%
Marketing: -47.2%
Net Income (Profit) vs LY: +46.9% (+$321)
Actual Profit/Loss: -$364

Year to Date

Total income: -8.3%
Total COGS: -5.1%
Payroll: -7.2%
Marketing: -10.5%
Net Income (Profit) vs LY: -10.8% (-$203)
Actual Profit/Loss: -$2,084

I lost less money this July than I lost last July, so I suppose that passes for a win. Really, though, a few percent one way or the other doesn't make much difference until the rubber hits the road in September.

Cost of Goods Sold is a bit of a mystery. I can't figure out why COGS isn't rising and falling in lockstep with income; the only line item that seems out of line is "COGS other", which is the aggregate amount that I actually paid for the specific merchandise that sold.

Friday, July 24, 2015

Water, Water Everywhere

After at least six nibbles in as many weeks, I finally landed one of those golf ball tournament inquiries that I keep mentioning. The "extra" $600 makes up for the business I lost to vacation and gives me a shot at hitting my mark for July. Thanks to a price discount, buying the merchandise will eat up 60% of the windfall -- but, as we learned a few weeks ago, cash flow trumps profitability, and this money will stay in the plus column for a full month before the piper must be paid. 

That means that I can pay myself on Monday and cover all or most of my Mastercard bill this month, assuming that next week stays on track. So it's sunshine and lollipops at last, right?

Well, no. Not to be ungrateful, but it was just a welcome drop in a leaky bucket. I plugged a couple of holes in Curio City this week: I spent most of one afternoon tracking down a vendor's $220 overcharge. The Commonwealth accused me of shirking my $456 excise tax last year; it turned out that I had paid for 2015 instead of '14, so I had to spend time straightening out my own mistake.

Our personal financial bucket is leaking faster. The IRS sent us a $250 tax penalty for "failure to file" because our CPA's deadline extension request apparently got lost in the snail mail. I've previously complained that our 1040-ES payments for the rest of this year shot up from $600 to $1,040 per quarter and this new penalty just adds more injury to injury. At the moment I don't know if the accountant's explanatory letter to the IRS will get us off the hook or not. Property taxes are due this week, too. 

The house painting went $1,500 over estimate due to more carpentry repairs than I had expected (hello, termites!) and some contract changes. At least the house is painted. After 25 years, it looked pretty shabby.   

That week in the Berkshires drained our vacation account and we're locked into a September trip to Michigan for a family wedding. I have some money earmarked for that, but not enough, and of course Curio City will be out another few hundred dollars when I shut it down. I've never closed in the Fall before because the stakes are higher than in July. Maybe someone will buy another $600 worth of golf balls. 

My $650 dental emergency almost ballooned into $1,000 until a series of phone calls persuaded the dentist that their up-charges were illegal under our insurance plan. Have I mentioned that Anne needs $4,000 worth of long-delayed and increasingly urgent dental work?  

To mangle the watery metaphor, we're drowning in bills...but at least Curio City is still afloat.

Friday, July 10, 2015

Social Media for the Antisocial

The movie Chef is entertaining if you like family-centric feel-good comedies or if you're into cooking; I wouldn't ordinarily recommend a film on this blog, especially one with little conflict and a happy ending. I mention it because Chef's treatment of Twitter demonstrated how one is supposed to use that tool for self-promotion. I doubt that Twitter would work for Curio City; I don't know how to attract followers or care about following anybody. I don't think in 140-character marketing bites. I don't even know my Twitter login. Once in a blue moon I get an email saying that somebody mentioned "me" (@CurioCity) in a tweet, but they're invariably talking about somebody else who uses my name.

Anyway, in spite of all that I think I "get it" now, although I doubt that an antisocial person like myself could profitably exploit Twitter. That ship sailed long ago anyway; I've read that it's sinking financially and won't survive unless they can figure out how to squeeze money out of their billion users. If they screw that up, the rats will desert. 

Facebook used to kind-of, sort-of work. My posts reached nearly 200 followers before Facebook starting blocking businesses a couple of years ago. Now one must either buy advertising -- which failed two expensive tests, one of them run by a third party -- or pay to "promote" one's post. My blog posts and email newsletters automatically get exported to Facebook (and maybe Twitter, too, I think) and I still post manually to announce coupons and new products. Thanks to two likes and one share, my last Facebook post actually reached 48 people (compared to the usual 20 or so). Forty-eight people is a lot. So Facebook isn't a total waste of time...just mostly a waste of time. 

That leaves Pinterest. I don't quite know what to make of Pinterest. Pinterest seems needy. It courts me with come-hither emails whose gist seems to be "We figured out how to trick you into giving us money!" Their "promoted pins" smell suspiciously like paying Facebook to boost a post...that's never going to happen. "Buyable pins," their latest gambit, only work with Shopify or Demandware, whatever that is.  

I've been threatening for years to suck it up and force myself to learn Pinterest, yet somehow I never do. I have an April email called "Step-by-step videos on creating pins and boards" in my Inbox. I created some boards and posted some products long ago and they apparently get "pinned" from time to time, so I do know the basic mechanics. I just don't understand the social aspect. Who goes to Pinterest to look at stuff, and why? I think that I'm supposed to pin other people's stuff to my boards, but I don't understand the etiquette of pinning somebody else's content or how that works to my advantage. Are they supposed to reciprocate? Am I supposed to contact them when I pin their stuff to my boards? I don't understand the motivation.  

Every time I do try to force myself to look into it, I quickly glaze over and wander off. Free advertising is my only interest in Pinterest. I just want to sell stuff. Tell me how to sell stuff.


No post next week because I'm closing for vacation. "Closing" means turning off my advertising, posting some warnings about shipping delays, and ignoring my phone for a week. Naturally I'll be checking email daily; there's no such thing as a day off, let alone a week.

Friday, July 03, 2015

Profits of Doom

At the end of last year, Quickbooks showed Kraken Enterprises sitting on a nice, genteel $800 loss. That meant no bonus for me and, more importantly, no corporate income to tax on our personal return.* But some accounting hocus-pocus changed that ending balance into a massive $1,762 profit. As nearly as I can figure out -- even a picayune little business like Kraken Enterprises has Byzantine tax returns -- my inventory ended the year $2,500 higher than it started out. Or maybe I sold $2,500 worth of stuff before I paid for it. I don't know. For some actuarially sound yet impenetrable reason, an accounting adjustment reduced my COGS and thereby increased my income by $2,500 without the benefit of having 2,500 more dollars.

By that reckoning, Curio City should have paid me $264 to cover the tax bill (15% of $1,762), plus a $1,123 performance bonus (75% of the remaining profit). But that accounting technicality didn't conjure 1,387 actual dollars out of thin air. Imagine how much louder I'd be bitching about cash flow if I'd given myself a huge payout last year.  

Anyway, my store was technically profitable last year. That's supposed to be a good thing, right? Capitalism fetishizes profits.** I paid my CPA's fee and still managed to squeak out last month's Mastercard bill. To cover those two huge outlays, I had to postpone last Monday's payday for what I thought would be a day or two; unfortunately, another damnable holiday lull is turning this into the second-worst week of the year. I'm only short by $150, but with sales averaging just $45 per day I might have to forgo this paycheck entirely.

Neither of my bulk golf ball customers came through, obviously.  I never expect those inquiries to pan out, but I always hope that they might.


I won't go into how we got reamed on our personal tax returns because Kraken's unexpected profit was only a fraction of the problem. I had to mail Uncle Sam nearly $3,000 (that's real money, not company money) on June 15 and he expects $2,100 more by the end of the year; I had only budgeted $1,600 for our property taxes. I should get most of those federal outlays back next year since Anne's not earning 1099 income anymore...but I was already stretching to cover the two vacations and house painting that we're locked into. $5,100 in taxes and $800 in emergency dental work...well, I don't know where that's going to come from. The home equity line, if worse comes to worst.

On the plus side, I'm optimistic that Curio City will lose money this year and deliver the healthy tax deduction that was snatched away last year. I need either that or a significant profit payout, and the latter sure doesn't look likely. 


* S corporations don't pay income taxes. Instead they pass their results through to their shareholders. A profit creates K-1 income that's taxed at the recipient's normal rate (without any employment taxes). A loss gives the shareholders a nice little deduction. So a profit is only welcome if it comes with more than enough money to pay the tax.    

** Did you know that Amazon has never had an operating profit? True story. You don't need to actually make money while your cash flow grows fast enough to pay everybody -- the same classic pyramid scheme that Barnes & Noble used to destroy the independent bookstore industry. Only when the expansion stops do your stores need to pay their own way. Unlike B&N, Amazon can theoretically keep growing forever.

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