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:
|Cost-of-Goods Sold Expense||($1,505.91)|
|Earnings before interest and Income Tax||($2,457.43)|
|Earnings before income tax||($2,457.43)|
|Income Tax Expense||$0.00|
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.
|Subtotal of current assets||$2,421.78|
|Property, plants and equipment||$0.00|
|Cost less accumulated depreciation||$0|
|Liabilities and Owner’s Equity|
|Advanced payments from Customers||$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|
|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!
Mr. 39 Months