We Have Achieved Mediocrity!

Excel says March was a black month. QuickBooks sees red. Just a couple of average sales in the remaining day and a half would push grouchy old QuickBooks' $69 drop into positive territory. As the seventh-best (or fifth worst) March ever, it was comfortably average. Mediocrity is about the best that I can expect, considering how little money I can devote to fighting the headwinds that I'm facing.

March

Total income: -2.1%
Total COGS: -1.8%
Payroll: -66.6%

Marketing: -67.8%
Net Income (Profit) vs LY: +61.4% ($1,094)

Actual Profit/Loss: -$689

2017 YTD

Total income: -5.5%
Total COGS: -4.3%
Payroll: -62.7%

Marketing: -43%
Net Income (Profit) vs LY: +78% (+$1,436)

Actual Profit/Loss: -$405

Excel shows a $145 gain over last March despite that $160 kite return and the day's business that I lost to the Russian hackers. My CPA's hefty tax-prep fee and another year's rent on my UPS box turned the bottom line especially nasty; without those two confounding factors it would be within a few bucks of zero. I confess, though, to being disturbed at seeing red ink despite cutting payroll to almost nothing. Theoretically, the "actual profit" amount should be what's available for debt reduction; in reality, the variance to LY more accurately reflects what I've paid down. I wonder if profitability is even possible for Curio City anymore, or if its income has fallen so far that it can no longer cover its baked-in costs. We'll see if the next few months can bring back the black.

Prospects for April: Kite sales perked up nicely this week, which bodes well. Jackite's promise to restock poles "in late April" could provide a minor boost, since the six months that they were gone might have created some pent-up demand...but the real impact of that will be on May and beyond, and even then it will probably just mean keeping up with LY, before poles went out-of-stock. Kite season is starting to fly and I think Easter is somewhere in there, too (churches buy a lot of dove kites). With my biggest expenses out of the way, I hope that April can be a turnaround month.

Blue Hills didn't affect March at all. If the huge chunk of income that we're expecting comes in April, next month's QuickBooks numbers will go haywire, and these reports won't normalize again until next February, when I can run apples-to-apples comparisons on the classes that I created this February. As far as QuickBooks is concerned, it was all just Kraken Enterprises up to that point.    

First America, and Now Curio City

How's that whole "getting out of debt" thing working out? About as well as could be expected, thank you for asking. So far I've paid off slightly more than I added each month despite the $100 interest charge, and I did that while my biggest annual expenses (taxes and tax preparation) took a bite out of cash flow. My balance went from a high of $8,800 in January to $8,400 last month and will dip a little below $8,000 next month. With the biggest bills out of the way, I should be able to reduce it by close to $1,000 per month for the rest of the year, leading to break-even in October or November. 

That's too late to finance next Christmas, so I'll have to decide whether to take on more debt to buy enough stuff to match LY's anemic holiday sales, or just hunker down, expect another big decline, and sell off whatever I can, with an eye toward starting 2018 in the black and making that my comeback year. 

This week I billed my first $100 for two hours of editing. Curio City currently pays me $50 per week, and that's in a decent week. I also finished a package of stories for MIT that will pay me more in two weeks than I earned from Curio City in all of 2016. I actually caught myself hoping that I didn't have any new orders one morning because I didn't want to spend the time filling them; wishing that your own business would go away and leave you alone is not exactly an attitude for success. 

The next sentence in the first draft of this post said "I'm still committed to staying open through Christmas," but I'm not so sure about that after what happened last Friday.

I needed to finish three stories on Friday out of the nine in that MIT package that was due on Monday. I quickly tended to Curio City's needs in the morning and reserved the rest of the day to write. Then the emails and phone calls started. In the wee hours of Friday morning, credit card thieves had used my checkout page to repeatedly submit a transaction for $2,958.58 with a different credit card each time. I later learned that their script selectively targets Sunshop stores. PayPal shut down my payment processing ability when they detected what was happening. I closed my store overnight so that the script would move on to some other poor soul. Soon, people who saw a huge charge authorization attempt with my store's name on it began calling me for an explanation. 

By the time it was over -- and I hope it is over, although I was still getting calls yesterday -- 14 people had complained. All of them had recently-opened business credit cards. All of them were in Virginia, Maryland, or one of the Carolinas. Based on the time of day that the script ran, PayPal guessed that the attackers are in Russia or Eastern Europe. These are probably not the same Russian hackers who installed Trump, but who knows what's really going on? People are saying, I don't know, what do you think? These particular slimeballs are "carding," which is a common practice whereby they validate the stolen card numbers for resale. They used a huge transaction amount because high-value cards are worth more on the black market. Wiki tells me that validated credit card numbers can be resold for up to $30 apiece. 
 
Curio City sucked down enough hours and raised my blood pressure sufficiently to prevent me from finishing more than two of the scheduled three stories and leave me feeling like I literally don't need this crap anymore. Blue Hills pays me way, way more than Curio City ever will, and it's far less aggravating because it doesn't face the Great Unwashed Masses. Blue Hills operating costs are close to zero. The big caveat is that all of my work so far has come from assignments that my wife handed me because she has more jobs than she can handle. Nobody would knowingly hire me to write something at $1.50 a word; even though I can deliver quality work that's worth the price, I have no credentials of my own. It will take months or years to develop those. Anne is technically an employee of Kraken Enterprises for tax purposes, but I'm effectively working for her. 

If the editing work becomes steady enough I might finally fold Curio City. I really only need to earn about $600 a month; 12 hours of editing would do that. On one hand, Curio City doesn't pay squat, I don't enjoy it, I don't care about retail, I'm apparently not as good at it as I used to be, it doesn't make the world a better place, and its passing would scarcely be noticed. OTOH, inertia is strong in me; in the short run, it's easier to keep it going than to shut it down. I'd rather convert some of the $20,000 worth of junk in my cellar into dollars than trash it...but, because they are both Kraken Enterprises, what I do write off will offset Blue Hills' considerable profit. The decision to close has big implications that I'm not ready to consider yet. The immediate question is whether I will invest the time and money to actively pursue a successful Christmas, or sit back and take whatever it brings...and I don't even have to address that for a few more months.

Blame Canada

I mentioned last week that I'd given someone permission to return the nine blackbird kites that she had bought for a school play. They showed up on Wednesday along with the four Create-a-birds that she had said she was keeping, inflating the refund from $125 to $182 and pushing the week's sales to a negative $61. It subsequently clawed its way back into positive territory to avoid becoming my first-ever negative week. 

I've lost money on two international sales this month (different products). The product weights are set to 0.5 lb so that I can ship two widgets for the 1 lb rate. In my lightest possible packaging, the shipments each actually weighed 8.4 ounces -- no biggie for a domestic shipment, but First Class International rates jump from $13.75 for 8 oz to $22.75 for 12 oz with no steps in between. Four tenths of an ounce cost me $9 out of pocket. I gave away the product with the $10 markup and actually lost money filling the order with the $6 margin. 

Have I mentioned that it takes me a day and a half to earn $9? I'm resigned to not making any money until Curio City gets out of debt, but actually losing money is a different story, and this was definitely a losing week.

Aside from doing a slow burn about spending my time shipping money-losing orders, I'm cheesed off because I've spent 10+ years refining my product weights. Changing those weights from 0.5 to 0.6 lb will cover me against future international shipping losses while screwing over US customers who buy more than one piece. But I can't afford to lose $9 per shipment because the USPS decided to skip a 9-oz rate, so 0.6 lb those products shall henceforth be. Sorry, Americans. Blame Canada.

The Beginning Is Finally Finished

I hereby pronounce the Blue Hills website finished. Creating the final page took forever. The BoldGrid editor works fine when adapting one of their templates, but it's persnickety when creating a page from scratch. I just want a simple text page with some headings and columns and tinted backgrounds. I struggled for hours to set it up (more or less) the way I wanted it...and then I lost connection to InMotion's database and, with that, the whole morning's work. I finally slapped the text up there without any of the painstaking formatting. That light blue background on some blocks? Completely random, and it doesn't even show up in the editor. Maybe someday I'll redo the page from a template so that I can gussy it up, but for now, I'm sick of looking at it. So: Done.

(Sorry, Matrix: Antique typewriters are a common and time-honored image among writers and editors and a big solid typewriter reinforces the tradition and experience that we're selling. Plus, Anne and I both like it. So my pictures stay.)

In addition to finishing the website, I established a PayPal account and re-recorded my voicemail greeting. Every detail that I can think of is checked off. I'll announce Blue Hills to the world and start beating the bushes for clients on Monday. No point in doing that on a Friday.

I am less than impressed with InMotion Hosting so far -- the connection is always slow and uptime is less than 100% -- but I've put far too much effort into building the website to chuck it and start over elsewhere. My site is more of a place to refer personal contacts than a sales tool to recruit strangers, so I don't expect a lot of traffic anyway. 

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March was off to a great start until a school teacher requested permission to return $125 worth of kites that aren't suitable props for her play. Crap. I had already restocked them, so when those come back I'll have a three-year supply of blackbirds. Oh well, that's retail for you.

On the plus side, it's already shaping up to be a good spring for bird kites...and since kites are really all that I have left, that's very good news.