When Battle Plans Go Awry

"No battle plan survives contact with the enemy," said the German strategist, and the recovery plan that I outlined last week collided with reality this week. The 10-hour editing job that I had expected to start right after the first of the year is not even an actual open position yet, and I'm not a shoe-in if it does open up. What's worse, I might have shot myself in the foot when I balked at being on-call 24/7 in addition to the 10 scheduled hours. I don't mind doing some ad hoc night-and-weekend editing within some reasonable parameters, but I can't be available all the time just in case, and I find it hard to believe that anybody else would go along with that, either. It's copy editing. Lives are not at stake here. I would still very much like this gig, but I think my chances died with that exchange.

Well, Eisenhower said that "Plans are nothing; planning is everything," and I'm still doing that. Since I can't go entirely without income I'll have to start bleeding Curio City again until I can figure out something else. I took one last mini-paycheck ($62.55 gross, baby!) for the last week in December. I'm going to skip the other half of the check that would be due on Monday. Then I'm going to start taking 10% of net sales rather than the 15% that I took in December, or the 20% that is my historical due. This will hurt Curio City's debt repayment plan without helping me very much. 

If I can't find at least one copy-editing client within the next month, I'm going to have to find a part-time minimum wage job. Eleven bucks an hour is still a lot more than Curio City can pay me, and I don't mind doing menial mindless work, but I really want to avoid being servile to the public. Most of the menial jobs that haven't been automated yet are customer-facing, and I have already spent too much of my life doing that.  

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I was going to say "At least LY set some easy sales targets for this year," and then I noticed that the second week of 2016 brought in a $750 bird kite sale. Sigh. $750 would be a pretty good total week in January. That one lucky strike will almost surely make this January yet another double-digit loser. Not a cheery start to the new year.

This week, at least, was halfway decent, thanks entirely to Switchables. I still can't believe those are going away. I'm announcing their demise in a newsletter tomorrow morning. It only goes to 185 people, and only some of them will open it, and only some of them are Switchables customers...but some collectors are going to be as shocked and disappointed as I was.

2016: The Plan

I'd clean up if I could repeat last Christmas right now. Applying the lessons that 2015 taught me 10 months from now will be like a general fighting the last war. I want to emphasize the nine months of the year that aren't Christmas this time around instead of gambling everything on Q4. That plan is off to a lousy start.  

Blowing out my December ad budget (see last week's post) hamstringed 2016 right out of the gate. Because I vowed to stop numbing you with numbers, I'll paint with broad strokes: January-February started out more than $4,500 in the hole, and I can expect to rack up at least another $2,000 in unavoidable costs during these months. Last January and February together only brought in $4,600. Back in the day, those months were good for at least $6,000 and as much as $10,000, which would fill the hole that I'm in and cover my operating expenses. Reaching the high end of that range isn't impossible, but even the bottom-end $4,600 revenue expectation already looks rosy. 

This December crept past 2013's December by $15, making it the best since 2011. Then my fortunes flipped with the calendar page. One week into the new year, I'm already running $850 behind LY and looking at the worst week since last September. Business has been so poor that I wondered if there was something (technical) wrong -- my "IT Department" periodically gets jargon-filled emails from PayPal and my web host; crossing my fingers and hoping for the best usually works out fine, but one never knows. I turned my Search ads back on, because what choice do I have? The meter is running again. I feel like a taxi driver in an Uber world.  

I would love to restock the 21 Metal Earth models that sold out completely. Even better, I'd also back up the dozen that are down to one or two pieces. Better still, I'd bring in some of the new titles that were out-of-stock when I wanted them in November. In an ideal world, I'd add all 82 of the models that I don't yet carry to the 74 that I do. I'd use more debt to do at least some of that if I were confident that it would pay off. Most of December's advertising blowout was spent on stronger-than-expected Metal Earth clicks and those ads still get more hits than I can afford, so I can see the interest. The trick is refining that expensive traffic into profitability. Having the most desirable models would be a great first step, but that takes money, and if you're paying attention you can see my dilemma.

But wait: There's a wild card. Next month I'm going to launch an arrangement with a specialty retailer who will sell a limited selection of models through his store, which I will then dropship. I'm skeptical that there's enough markup there for two retailers to profit from the same item, but if it works it will be like selling the line through a second store at a modest additional cost...but without having to buy the rogue advertising clicks. I can't say anything more about that until after Valentines Day. If it all goes swimmingly, it might be enough to float me back above water by the end of March.

This is where I usually resolve to find some great new products. Even though I barely have the money to keep my existing stuff in stock, I have to find a way to expand, and I can't afford any missteps. Who knows? Maybe Jackite will finally bring back the Create-a-Bird. The $500-1,000 a year that that one item used to bring in would make a nice addition after a two-year absence. 

OK, that was still a lot more numbers than I wanted to lay on you, but I'm going to leave you with one more: I've planned 2016 to end just $1 higher than 2015 did. Reversing my years-long slide will be a victory. If I can't do that, then squeezing a profit out of my declining sales will be an acceptable consolation. 

OK, 2014, Let's Dance

I wish that I could predict sunshine and lollipops for 2014. I ought to be counting my money and planning how to invest it; this year I’m not going to be able to pay my January Amex bill. Mastercard will want a few hundred bucks a couple of weeks later, and then I’ve got to scrape together $1,115 for tax preparation and fees. Right now all I see are bills stretching out forever and a checking account that’s stuck in neutral.    

I have two goals for this year. The first is simple: Don’t fail. That just means paying the bills and beating the low targets that 2013 laid down. In business as in life, I only ever hope to survive, but that won’t cut it this year, so the second goal is to succeed: That is, to beat 2011’s high water mark by 1% and restore real growth. That requires a seemingly impossible 22% increase over LY. 

The only strategy that I have in mind will cost a little money, but maybe not too much money.  

  
I passed up the last two Sunshop updates because they didn’t contain enough features or fixes to justify the cost and risks of upgrading. The only intriguing item is something called “responsive themes.” I’m not entirely sure what that means except that the new templates are supposed to make the store display better on smartphones. 

Who cares? I don’t have a smartphone, I don’t understand them, and I can’t afford to get one, so adopting a “responsive theme” is a shot in the dark. My existing website already looks better than I expected on my wife’s Android phone. Analytics says that nearly half of my December visitors arrived on a smartphone and that they were worthless. 84% of mobile users bounced away without looking at anything (vs. 67% of desktop users); those who stayed only looked at 1.5 pages (vs. 3.33); and only 0.48% of them bought anything (vs. 3.9% on desktops and 2.6% on tablets). Knowing that smartphone traffic is of notoriously poor quality I had already reduced my ad bids for mobile devices by 25% to avoid wasting money on their clicks. But they came anyway. If I can’t get rid of them and I can’t force them to use real computers, I have to figure out how to exploit them. 
  
Even if the “responsive” thing goes nowhere, a new coat of paint can’t hurt. Curio City’s appearance hasn’t changed since 2007. Turnkey will do the upgrade for just $75, which is considerably less than I usually pay my own developer (assuming they don’t charge $75 per version!). I might be able to squeeze in $75 as early as next month. I'll be throwing away six years of accumulated customizations in my old “modern black” template. Bringing them along could cost hundreds of dollars in developer time plus potential downtime. But I need to play the only ace up my sleeve early in the year if it’s going to make any difference, even if that means starting over with a generic, uncustomized template.

If Turnkey releases the all-new Sunshop 5 it negates all of this, but that’s been just around the corner for two years now.  

I need to do this as soon as we get through the holiday hangover and I can cover my immediate bills. Meanwhile, I’ve cut my bids for mobile devices further so my limited ad budget can reach better quality customers.

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Advertising is my only major variable expense. I probably can’t cut the actual spend without slitting my throat, but I might be able to squeeze more revenue from it. For starters, I’m taking another hard look at Bing/Yahoo ads. I spent $200 for just 13 conversions in December, but I screwed up the statistics when I wasted $84 advertising cheap Buglit flashlights -- 3,359 clicks and 0 conversions before I caught that mistake. I’m going to monitor my Microsoft Adcenter spend through January and cut it off entirely if it doesn’t perform. This isn’t the first time I’ve threatened to do that, but it’s the most serious I’ve been about the threat.

How did 2014’s first accounting week go? Well, I beat LY on five out of six days and would have enjoyed a small lead had it not been for a $500 bolt-from-the-blue Switchables order LY. So I’m already running 50% behind LY. And I had two other bulk orders in January 2013 that I can’t expect to repeat this year. I’ll declare victory if January 2014 can merely match LY without the benefit of any big shots in the arm.

I like to end on a positive note whenever I can. That’s a reach this week. Economists are predicting two or three years of normal, healthy growth, and that passes for boom times in the wake of the Great Recession. Curio City has historically done best when the economy has done worst, and vice versa, but I don’t think there’s a causal relationship there. Trickle-down economics has been resoundingly discredited, but a rising tide should lift all boats by at least a couple of millimeters if we can stop the leaks.

I’m in decent shape for merchandise and supplies. I shouldn’t need to buy anything for a few weeks.

There are a couple of silly tricks in my favor: First, Excel’s 2014 will have 53 weeks after it steals December 29-31 from 2013 and January 1-3 from 2015, because both of those three-day segments belong to the four days of their adjacent weeks. That fiction won’t affect the Quickbooks numbers that I report here, but it ought to be good for a few hundred bucks in the numbers that I use for planning and measurement. Second, we decided not to take a summer vacation this year because our cat is too old and fragile to leave alone and we need to put the money toward a new roof. That ought to be good for another few hundred dollars, but this plan could change if Iggy dies soon.

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I realize that this blog is in a hand-wringing rut. I’m tired of writing about lousy sales and broken budgets, so Friday entries are going to become more sporadic. Readership has fallen into single digits anyway; maybe more engaging topics will lead a surge back to double digits.

Existential Crisis Part 3: Getting Better at This

Saturday is usually the weakest day of the week. Last Saturday belied that trend and bent the needle on September’s numbers enough to warrant a happy revision.

September (rev.)

Total income: +28.3%
Total COGS: +61.7%
Payroll: +18.1%

Marketing: +158.3%
Net Income (Profit): -1314.7% (-$569)

Year to Date (rev.): 

Total income: -15.4%
Total COGS: -16.6%
Payroll: -16.1%

Marketing: -3.2%
Net Income (Profit): -48.3% (-$629)

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A big increase in sales would make my whole existential crisis moot. By “big increase,” I mean recovering this year’s anticipated 16% decline AND adding a little bit of real growth on top of that. A 20% increase from 2013 to 2014 would do it. I can roll with one down year…but not two.

The Christmas rush pumps me up and then my enthusiasm gradually deflates along with sales. Putting more time and effort into the business does help in a general way, but there’s no obvious payoff for working hard during the slow season. As the song says, “Ninety days is a long time to work for no pay/Building a boat that might sink in the bay.” By summertime the becalmed Curio City has slipped down my priority list. 

Staying focused would make at least some difference, and the prospect of getting another job does focus my mind. Can I make 2014 a turnaround year? It’s not like I’ve been holding back any brilliant ideas for just this occasion. Getting an outside job, though, would make it very difficult to step up my Curio City game in any meaningful way.

When I looked for 2013’s punch list of objectives to see if I could tick anything off, I couldn’t even find it. In fact, the last time I listed goals was January 2012 and virtually nothing on that list got checked off. So making a new list and following it through is a good place to start.  

There’s no mystery about what caused this year’s decline: The death of long-time mainstay Panther Vision caps. Either reviving that line or finding a new one like it would solve everything. The trick is figuring out what caused the decline. I don’t think that the product is dead or the market is saturated, and I’m not aware of any killer new competitor. Did my advertising die because nobody’s searching for them anymore, or do I just need to refresh my advertising? Writing new ads didn’t make any difference. Maybe the six-part course in Google Analytics that I signed up for will help me answer that. 

And therein lies the rest of the answer: I have to get better at advertising and marketing. As much as I hate doing that, it beats bagging groceries. Last month’s numbers demonstrate the futility of simply throwing more money at what I’m already doing. In May I changed an email’s subject line to “Marketing/SEO crap I ought to check;” it’s still sitting in my intray, because who cares about marketing/seo crap? Same deal with Pinterest; I created an account two years ago and never went back to it, because who cares? Well, I need to make myself care.

Finally, I have to make some stab at optimizing my store for mobile devices. There might be some halfway measures I can take while waiting for the long-promised, oft-delayed Sunshop 5.

I did do a couple of things right this year. Corn-n-Tater bags will never have the universal appeal of lighted caps, but they are finally coming up to speed. The 70 that I’ve sold so far have brought in over $900 at a good markup, and they have the potential to sell hundreds more as long as I can remain the exclusive online distributor. 

Adding poles and dropshipping to bird kites also paid off. I’ve sold 42 poles for almost $1,800 and who-knows-how-many kites to customers who would have gone elsewhere if poles weren’t available. Dropshipping brought some new headaches but no disasters. In fact, I just changed all of my on-hand kite quantities to 999999 to prevent missing sales due to the small inventories I keep on hand. I’ll still keep a few of each in stock to fill small orders myself. I still might regret this flat-out commitment to dropshipping, but it’s worth the risk.