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, June 16, 2017

The How and When of Closing a Store

Closing a store is similar to what I imagine divorce must be like: One must endure a lot of confusing and emotionally charged milestones before one breaks through to a promising, yet seemingly distant, future. Here's my tentative roadmap for Curio City:

ONGOING: Stop ordering new products. Debt has already forced me into this; now I'm just formally stating that it's a policy.

ONGOING: Stop replacing sold-out products. Again, I've mostly stopped already. I'm only reordering 100% sure-fire sellers (kites, basically), and I'll continue to do that at least until I'm entirely out of debt.

ONGOING: Discount/write off very old stuff: I need to round up some ancient products and test them to see if the batteries are dead. If they are, I need to decide whether they're worth the cost of reviving with new batteries. They usually won't be worth spending money on. For example, I paid $2 apiece for these PetLits in 2012. After five years in storage, they're probably spent. They aren't selling at $4. Maybe they'll sell at $3, or maybe they won't; does a buck really make that much difference in someone's purchase decision? If it costs me a buck to replace each one's battery, the cost goes up to $3, so in the best case I'm merely recovering my cost, and it's more likely that I'll end up with dead products that cost me $3 instead of $2. It's better to write them off and cut my losses. I should be doing this right now, but handling old failed products is really depressing, to be honest. Somehow it never floats to the top of my to-do list.

ONGOING: Cut back on advertising: This has been a long-term goal, and it's down by better than 50% (while leaving sales flat). At some point I will cut it to zero; probably not until after Christmas, though. Meanwhile, I continue trying to stomp on it.

AUGUST: Let unneeded URLs expire: I only need to keep curiocityonline.com and krakenenterprises.com. It never made much sense to pay for .biz or .net except as a defensive thing.  

DECISION TIME, Sept. 30, 2017: Am I going to support this Christmas with new/replenished stock? If so, I need to do some very careful, limited buying beginning in October. This will largely depend on whether my debt is paid off by then. Right now, I'm inclined to simply sell down as much existing stock as I can without buying anything more. 

November? Announce a clearance sale. I'd need to find a way to exclude kites from that.

MARCH 2018: Let the UPS Store box expire, or renew it for another year? I only need this address for receiving packages and deflecting junk mail. I won't need it once I'm sure that I won't get any more shipments. But I probably ought to keep it as long as Curio City is still doing business. It's my Blue Hills address, too, but there is no reason that Kraken Enterprises can't "relocate" to my home address after Curio City is gone. 

This will mostly depend on whether I decide to sell kites through another summer. I'm inclined to do so after this year's successful May and June, but $200 to renew this for another year (even though I'll only need it for six months) seems pricey. 

JUNE 2018: Close hosting account: This is a point of no return. I'll need to pony up another $150 if I want to keep going through the end of kite season. This looks like a fairly likely closing date; it will depend (a) on how much non-kite stock I'm still trying to get rid of, and (b) on how steady my Blue Hills income has become.  

SEPTEMBER 2018: Let curiocityonline.com lapse. Another point of no return. Renewing it only costs around $20, but coming as it does at the end of kite season, and before another Christmas season, makes it seem very sensible. I really don't want to flog another Christmas after this one, so if I didn't close in June, I will certainly do so in September. 

One of life's cruelest ironies is that time flows subjectively faster as one grows older and closer to death. By age 60, a year seems to fly by. So, while a year from September might sound like the distant future to a younger person, it's right around the corner in my mind.  

AFTER CLOSING: Write off everything that's left. Even after spending a year winding down, I'm still going to have $10-15,000 worth of stuff in the cellar. Writing it all off will be a huge one-time tax deduction. I'm not sure yet how I'll physically dispose of it. 

Cancel the Curio City Mastercard...but not the Kraken Enterprises Amex. Think about opening a Blue Hills Visa.

Close the Curio City checking and savings accounts.

Reevaluate maintaining Kraken Enterprises. Being a corporation costs me around $1,000 per year. It made a lot of sense for Curio City, but it doesn't offer any tangible benefits for Blue Hills alone. Killing Kraken without shuttering Blue Hills would be messy, though. And since Blue Hills has almost no other expenses, it won't be hard to cover the cost of keeping it going. The main drawback would be continuing to pay my CPA for a separate corporate tax return instead of folding Blue Hills into our personal returns. I might have to reconstitute Blue Hills as a partnership or sole proprietorship. This gets into lawyery/accountanty stuff that's over my pay grade.

Friday, June 02, 2017

Blow-away May

This was the second-best May ever (ending with the best YTD week). It even managed to close half of the astonishing $1,800 gap between first and second places. Might have had a shot at the record, too, if I'd been more actively engaged in daily operations, and if Jackite hadn't run out of Dove kites during the runup to Pentecost. Let's put it this way: This month actually beat last December. That not only tells you what a great month May was, but how awful last Christmas was.

All I've been doing is filling orders and restocking kites; the store's on autopilot while I peck away at a large Blue Hills project and plant my vegetable garden. Kites are going gangbusters, and I even sold off some of the old dead stock that I'd really love to move. If it weren't for this year's 50% pay cut, it would have covered my beer-and-tobacco budget with money left over. June might pull off the same trick if Jackite doesn't run out of bald eagles and I don't tweak anything, since autopilot is working just fine. If June holds up, I'll have to rethink my store closing strategy. Paying off my debt a month or two earlier than I had foreseen would enable me to flog another Christmas, if that seems worth doing. 

The following QuickBooks numbers are getting flaky as they start to capture Blue Hills activity. From here on out, they'll represent "Kraken Enterprises" as a whole rather than "Curio City" itself. Curio still made up the lion's share in May so these numbers are pretty close to Excel's opinion that Curio was up by $1,200 this month and is up a healthy $1,400 YTD. The huge Blue Hills check that we earned in February and March was delayed again, so it will almost surely blow June's numbers out of the water. If that actually happens, I'll think about revising my traditional monthly report.


Total income: +40.7%
Total COGS: +32.4%
Payroll: -17.7%
Marketing: -25.8%
Net Income (Profit) vs LY: +341.3% (+$1,943)
Actual Profit/Loss: +$1,055

2017 YTD

Total income: +12.2%
Total COGS: +10.9%
Payroll: -42%
Marketing: -41.5%
Net Income (Profit) vs LY: +158% (+$3,742)
Actual Profit/Loss: +$1,374

I gotta say that Aaron was right about those fidget spinners; media coverage is still growing, and I've even seen them as the butt of some jokes. You know a product has made it big when it's recognizable enough to become a punchline. If I weren't so far in debt, and if I were actively trying to grow my store instead of ruthlessly reducing inventory, I'd plunge into them right now. There is surely a few hundred bucks to be made before they peak this Christmas, and possibly a few thousand. I might reconsider and go there after my debt is gone. 

Friday, May 26, 2017

Taxing Decisions

Anne's lifetime of credentials and contacts landed another Blue Hills job in my lap: Editing a 60,000-word young-adult novel. The flat rate that we're charging is lower than I would have liked because Anne works a lot faster than I do. She figured it would have taken her 35 hours; it looks closer to 60 to me. But it will still work out to around $18/hour even at my pokey pace, and that's 10 times what I make working for Curio City. The client is a home-based publisher, so there could be more jobs ahead. Editing fiction is an interesting challenge. English clearly isn't the author's first language, so I'm struggling to correct her grammar without unduly Anglicizing and changing her voice, or introducing words too advanced for youngsters. I hope that she'll be satisfied with the result. She's going to get back a better book. Turning it into a good book would require at least twice as much of my time and the result would barely be recognizable...so she's not getting that.

Curio City is mostly a distraction nowadays. It won't even provide most of my income this year, and it's way too needy. I still need it, too, and thinking about the process of shutting down saddens me. But I begrudge it my time. I have even started thinking of orders as an imposition.     


Without getting too specific, each new Blue Hills assignment has tax implications. You are required to issue a 1099 to any individual, partnership, or LLC to whom you pay $600 or more in a year; the internet tells me that payments to corporations don't carry this requirement (which might be a good argument for keeping Kraken around after Curio City closes). A check made out to Kraken Enterprises or Blue Hills Editorial goes through QuickBooks and my Blue Hills bank account and comes out as payroll, so the IRS gets its share. If that same client writes the check to me or to Anne personally, I could gamble that s/he will not ask for a W-9 or issue a 1099-MISC, making the unreported money unofficially tax-free. In that case it won't show up as Blue Hills income or contribute to my Blue Hills salary, and that offends my bookkeeping sensibilities. Worse: If the client realizes his/her accounting obligation and requests a W-9 at the end of the year, that income is suddenly official and taxable, and since I didn't withhold and submit the appropriate taxes in the quarter received I risk interest and penalties for late payment (assuming that I can even scrape together the amount due next April). Escrowing the tax portion off the books would cover that contingency, but that's both messy and shady. 

Will an individual or corporation be paying me? Will they pay me more than $600 a year? Will they make a single payment, or several small ones? Will they ask for a W-9? Will they mail a check, use PayPal, or transfer bank-to-bank by ACH? Will they issue a 1099-MISC to Blue Hills (i.e., report it to the IRS), even though Kraken Enterprises is a corporation? Should I ask that their check be made to myself (or my wife), to Blue Hills, or to Kraken? And, finally, will they follow those instructions properly or not? 

Untaxed income is, of course, worth 15 to 25 percent more than taxed income, and that could add up. The odds that little low-profile Kraken Enterprises will ever be audited by the overworked and underfunded IRS are comfortably close to zero, so the risks are low. But because I'm an honest and risk-averse person, I intend to stay clean unless I'm very confident that the client won't hit the $600 trigger and/or won't report the payment. I'm also more inclined to keep the income under the table if the client was undercharged.

Incidentally, I did NOT just admit to tax fraud. Philosophically, I believe that taxes are the price we pay for civilization, and (being fond of civilization) I always pay my fair share. Corporations and wealthy Americans are chronically undertaxed for the level of services we demand. So far all of my clients have been companies whose paperwork is in order. Sooner or later, though, a handwritten check with my name on it is going to be tempting.  


Speaking of escrow: The bank problem that I wrote about in my last post week turned out to be more complicated than I had thought. I ended up having to phone CapitalOne after they sent an email to the wrong address. Long story short...they needed to officially locate Kraken Enterprises at my home address because the stupid PATRIOT Act won't allow a business to locate at a drop box. Apparently I could be laundering terrorist money, or something. It took me a couple of hours to figure out and supply exactly what they needed. Then it took another week for them to officially open the account, and another several days for me to link it to the proper checking account. But I think it's finally up and running, FWIW.

Friday, May 12, 2017

Calling In Sick, and Certifiably Existing

After torturing the proclamation of Curio City's eventual end from myself last week, I got a nasty case of the flu that confined me to bed for two days and kept me dragging through the rest of the week. Curio City used my sick-out to deliver its best two-week performance of the year. Jackite's long-anticipated pole shipment finally hit and a dozen backorders shipped all at once. The record-keeping was...delicate...and my head was not in a good state to handle it. 

That ought to take a big bite out of the ol' debt, huh? Yes and no. All of those dropships have to be paid for next month, and most of them came in below the 50% margin that I need to eke out a profit. I've whittled it below $7,000, and I hope to break the $6,000 barrier next month. Remember that, whatever else I decide about my store's future, nothing can happen until the debt is gone. 

I half-wonder if I should keep Curio City going just as Kite City. That's essentially all I sell now anyway. But Jackite has a chronic history of supply problems, and when they run out of something, they're often out for months (or even years) at a time. Formally slaving my fate entirely to theirs would be frustrating, at best.

Next week I'll take a first pass at defining some milestone decision dates. Closing my store will be a long, delicate process that has to be done in the right order to squeeze out as much money as possible while curtailing costs. Fortunately, that's the kind of management challenge that I'm good at.  


In 2009 I hit on the idea of escrowing my payroll taxes in a little savings account. Earning a few pennies in interest is fine, but socking the money away for my quarterly payments is the real point. Now I need to do the same thing for Blue Hills. After mulling it over I decided to open a second account to keep things neatly organized, rather than transferring Blue Hills taxes in and out of the Curio City savings account. It's all just Kraken Enterprises as far as the IRS is concerned, but I'm compulsive.  

Wrong decision! Capital One not only declined to activate my new account, they also froze my seven-year-old account. They did not bother telling me this; I only found out when the transfer that I had ordered two weeks ago didn't take place. When I followed up yesterday, their website told me that my accounts would be activated as soon as they received the "necessary documents"; as you might guess, they didn't tell me what those documents might be. Since there's no way to email them a question, I finally concluded that they want their own authorized signer form filled out, plus a "certificate of existence" from the state...which Massachusetts will email for the low low price of $10. After the requisite printing, signing, and scanning, I emailed those two pointless forms yesterday. Naturally, I have received no response. It would not surprise me to find out that they'll want some other random forms. 

These accounts will never earn even enough interest to recoup that $10 fee, but at least now I have a certificate that I exist. That's oddly validating. I wonder how I got through 12 years without one.

Capital One used to be ING Direct, one of the earliest web-only banks. I liked ING. I have never liked Cap One. But inertia keeps my Roth IRAs and household savings there, so they'd have to really, really piss me off to make me move my tiny business escrow accounts. They're off to a good start, but they aren't quite there yet.    

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