State of the Company

State of the Company

3 June 2015

I am leaving for a flight to Oregon in nine hours. The final hours before a flight always leave me in a state of mild anxiety, so now is as good of a time as any to write about how the past six months have progressed.

I have been self-employed now for six months and two weeks. It has been quite the experience, I must say! When I quit, I had twenty thousand dollars, but after a trip to Thailand and a nine-grand tax bill in April, my accounts going into the summer months totaled about seven-thousand. This is just to give some background on where things started from.

In January, I had a handful of sales due to a Google AdWords campaign. It was my first campaign with a limit of ten dollars per day. It brought in a number of off-season sales I probably would not have gotten and was good practice in campaign management. When I returned from Thailand at the end of January, I had a post-travel depression and business got pushed to the back burner. Not really a good thing when it is your only source of income.

By mid-February, I was beginning to realize just how much my tax liability would be, at an effective rate of twenty-six percent, so I finally got into gear and started prepping for summer.

In March, I began preparing to order about eight thousand dollars worth of inventory. The first three-quarters of this inventory has arrived and the last shipment should arrive in the next few weeks. This inventory should get me through summer and maybe over the winter months.

By April, my revenues were one-thousand one-hundred percent greater for the year so far as compared to the prior year. Pretty incredible improvement, and I saw it as a good sign for the rest of this year, considering that in that time last year, I had by then only received seven percent of my total orders for the year.

It is now June and from January 1 of this year, I have had nearly six times the revenue and three times the orders as compared to this time last year. Good progress.

With all this good news, I must admit that running a business without secondary income is quite challenging! With every dollar that comes in, I can choose to reinvest it into the business and eventually get two or three dollars back or I can pull it out and use it for myself. That is a very difficult choice to make right now.

Additionally, I am beginning to encounter a paradox of sorts that I had not expected. While the business is doing well and revenues are high, I am not actually making a lot of money in income because I must continually grow my inventory to keep up with expected increases in sales. So in the future, with inventory totaling fifty thousand dollars, I could expect to make one hundred thousand per year, but now, all of my income is tied up in growing inventory and I only have thirty thousand dollars in inventory. The more sales I have, the more money I get, the more inventory I need for future sales. I see no point at which this will plateau in the near future because there is no plateau for potential sales.

Perhaps the biggest challenge is the beast that is moving a company. I am now twenty-three years old. I live in my parents’ house. I enjoy living here, it is true, but I must set off on my own in the near future. How easy my life would be if I had no company. If not for this business, I could move into a four-hundred dollars per month room and live off about twelve-hundred dollars per month with relative ease. But alas, that is not the case!

Moving a business seems to be like moving yourself out twice. You must have a home and your business must have a home. How I wish I could move this business into a warehouse and live in said warehouse. Curse you, zoning laws! I must have internet in my home and I must have internet in my warehouse. I must have insurance in my home and I must have insurance in my warehouse. Nearly every cost that is incurred in moving out is seemingly doubled again in moving a business. Potentially, I could move into a relatively large house and use the house as a warehouse, but it is not particularly ideal, since houses are not designed to function as large-scale warehouses. More ideally, again, I would prefer to live in a warehouse.

While I may be able to move out or move my company, it does not seem like I am in a position to do both, so that is difficult to work around. Nonetheless, my goal is still to move out before my twenty-fourth birthday. Perhaps I will have to rent out rooms, I am not sure, but I aim to make it work.

When I return from Oregon, I will be arranging an appointment with zoning officers of the various valley cities to determine if there are any areas where I could live in my ideal situation. Nevertheless, it is certain that the next six months will be as interesting as the last six months!