TKD Woodworking – How did we do?

Well, it appears I sure picked the wrong time to start a new business/side hustle!

I’ve written several articles previously on my attempts to start a side hustle with my woodworking

So, the year is coming to an end, and its been interesting. As you might expect, sales did not exactly go according to plan. My sales for 2020 were $0. I believe that reflects a lack of marketing on my part.

My initial plan was to use craft shows and farmer’s markets to sell my products. As you would expect, once the virus hit, this got hit hard. In my area, they’ve had no craft shows, and the farmer’s markets have opened up with reduced volume and lots of requirements. So my major source of potential sales dried up.

I sought to use online sources (ebay, etsy, etc.) but the competition on there is pretty fierce (I’m competing in some cases with overseas low labor, and its hard to differentiate my quality online vs. folks being able to see/touch it). That competition only ramped up higher with the virus.

So here are the end-of-year financials for TKD Woodworking:

Income Statement

AreaAnnual
Sales Revenue$0.00
Cost-of-Goods Sold Expense($1,505.91)
Gross Margin($1,505.91)
Operating Expenses($951.52)
Earnings before interest and Income Tax($2,457.43)
Interest Expense$0.00
Earnings before income tax($2,457.43)
Income Tax Expense$0.00
Net Income($2,457.43)

So as you can see, I’m spending about $1K a year just to stay in business (insurance, business registration, etc.) The remainder of the money if for wood, hardware and finish, which I will hopefully get back once I can start selling items.

Balance Sheet

Assets 
12/31/2020
Cash$1,960.48
Accounts Receivable$0.00
Inventories$461.30
Prepaid Expenses$0.00
Subtotal of current assets$2,421.78
Property, plants and equipment$0.00
Accumulated Depreciation$0.00
Cost less accumulated depreciation$0
Total Assets$2,421.78
Liabilities and Owner’s Equity 
12/31/2020
Advanced payments from Customers$0.00
Accounts Payable$0.00
Accrued Expenses Payable$0.00
Short-term notes payable$0.00
Subtotal of current liabilities$0.00
Long-term notes payable$1.00
Total Liabilities$1.00
Owner’s Equity – invested capital$2,421.78
Owner’s Equity – retained earnings$0.00
Total Liabilities and Owner’s Equity$2,421.78

For the Balance Sheet, I had to add about $500 into the company’s account in mid-December (if the cash in my checking account drops below $1,500, they start charging me a fee every month.

Overall, I’m disappointed in sales not being able to at least cover the operating expenses. With the items I’ve built, I think I’ll be in a good enough position to recover in 2021. I’ve got one other item that I want to make some of, and then I will probably stop until I can actually start selling product.

Let’s all hope 2021 is a good year!

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Mr. 39 Months

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