The meme
of the moment would have us believe that 2016 was the worst year ever. It
certainly did bring losses, from celebrity deaths (David Bowie) to heroes'
deaths (John Glenn) to the death of the American republic and even, in a harbinger
for the rest of the country, the death of democracy itself (North Carolina). Legalized
marijuana was some consolation, but we can't even buy it over the counter until
2018...and our legislature just postponed that small comfort from January to July.
How awful was it, really? People --
celebrated or not -- die all the time. Companies and nations eventually do, too.
Except for temporary hiatuses under Clinton and Obama, the US has been declining
since the Reagan administration kickstarted inequality; the country only had to
hold it together for five or 10 more years to outlive me -- 25 years in the
worst case -- yet here we are, staring down apocalypse. Does Curio City also
belong on 2016's hit list? The top-line
numbers certainly look that way, but the bottom-line numbers hint that maybe
it's not time yet:
December
Total
income:
-44.4%
Total COGS: -45%
Payroll: -66%
Marketing: -64.7%
Net Income (Profit) vs LY: +559.7% (+$729)
Actual Profit/Loss: +$599
2016
(preliminary)
Total
income:
-22.9%
Total COGS: -23%
Payroll: -28.7%
Marketing: -28%
Net Income (Profit) vs LY: +22.5% (+$568)
Actual Profit/Loss: -$1,953
If I'd hit
my marks I'd be a manageable $4,000 in debt. Instead Christmas came up short by
at least $4,000 and left me $8,000 in debt. If you're a middle-class person or
above, $8,000 might not sound crippling to you. To a bottom feeder like me, it's
more than one-fifth of 2016's total sales, and $1,000 more than I paid myself
last year. I have to come up with $1,100 in annual taxes and tax prep expenses
before I can even start to whittle it down, and interest is accruing.
Yet, 11
years of experience says that I can still turn this around, and the bottom line
backs me up. In December 2015 I blew an outrageous $2,000 on advertising; I
held this December to just $712 and could have pared it even more if I hadn't foolishly
wasted $200 on Bing for some reason. Along with the reduction in sales, cutting
my paycheck from 20% of net sales to 15% saved me $1,550 on payroll. That's
bittersweet since "payroll" means "my pocket"; December
2015 lavished $2,200 upon me, compared to a paltry $734 this year. But my loss
is the company's gain, leaving this December comfortably in the black, whereas
December 2015 ended $130 in the red. The year as a whole lost only $1,953,
compared to $2,521 in 2015. If sales don't tank I can turn that black in 2017.
The
implications of declaring bankruptcy are too complicated for my little brain,
but I gather that it isn't a viable escape plan. The internet says that
declaring a Chapter 7 personal
bankruptcy discharges my personal
responsibility for corporate debt, but not the corporation's liability. For
that, (somebody) would take Curio City's assets to pay American Express. I'd
lose my inventory and probably my laptop and cell phone, and I'd obviously have
to fold the business...but they couldn't come after my sorry ass. That's good
to know as a last resort. First, my wife absolutely refuses to even discuss
declaring personal bankruptcy; second, there would be legal fees; third, it's a
drastic way to make just $8k go away; and finally, I can't imagine that it
would be good for my perfect 850 credit score. No, first I have to try to dig
out the old-fashioned way, one dollar at a time.
I can see
two paths through 2017.
In the
most likely route, I won't take any salary at all until solvency is restored. Assuming
that 2017 sales match 2016, that $7,500 (including payroll taxes) is almost
enough in itself to retire the debt, exclusive of interest. I've lined up a
part-time copy editing job that will pay me three times as much as Curio City
did per week for just 10 hours of work, and I can probably find another client
or two as well. Curio City goes on autopilot while I focus on my second, much
more lucrative career. All I do is fill orders daily, tweak my advertising here
and there, and reorder as little stock as possible. If my editing business
thrives Curio City might cease being worth the grief...but
I won't make that determination until next Christmas. I would like to keep it
going, if only because I've already invested so much in it. But, for now, I just
want to clear some of the stock out of my cellar and get out of debt.
The less
likely path involves angels. I know at least three people who probably have
$10,000 they don't need; who would trust me to repay them $12,000 over four
years; and who would be willing to settle for a 5% annualized return on their
investment. Ten grand would get me solvent immediately. In this scenario I
would start taking a salary again and devote most of my attention to Curio
City, holding the editing business to the 10 hours a week that I've already
lined up. I would immediately set to work refreshing my product lineup, as
explained last week, and would most likely become profitable again by the end
of the year. I only see myself praying to angels if the editing gig falls
through...and it's entirely possible that none of them would bless me anyway.
So the
meme is right: 2016 was a bad year all around. Politically, 2017 will surely be
worse. Economically, Wall Street thinks it'll be good for the investing class;
for the rest of us? Who knows. Personally...well, as a heterosexual white male
of a certain age, at least I won't have to fear the pogroms, but I was really
counting on Medicare and Social Security. Professionally, only one thing is
certain: The spambots will flock to the words "loan" and
"debt" in this post and the volume of daily robocalls will increase.
I'm already blocking four or five new numbers every day (they seldom use the
same one twice), and have completely stopped answering the phone.
Incidentally,
blog posts will be less regular next year. I won't have much to write about if
I'm only paying minimal attention to business.
*********************
For all
that Christmas set new records of suckage, I still shipped 96 orders in
November and 175 in December with zero errors. Yay me.
