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Tuesday, May 16, 2017

Sales Approach $4,300 Half Way Through May and The Importance of Controlling One's Emotions in Business

Sales have continued to be nothing short of phenomenal this month. In addition to strong E-bay sales, we have begun to develop a very strong clientele outside E-bay, and these collectors have placed lots of orders with us for material. We attended our first show in over a year, which was held her in Saint John. I went in with very few expectations this time: my only objective was to put on a good display for the people walking by, to hand out business cards and copies of our blog posts and establish some rapport with the people I met. As it turned out, I was able to meet these expectations and sell $630 at the show as well. Then after I got home last night, a relatively new customer, who collects covers bought over $200 worth of covers, and this purchase led me to start showing him the rest of my covers today. So there could be several hundred more in sales coming from this customer over the next few months. So by the end of today, we have just under $4,300 in sales with 16 days left to go in the month. This is set to be our absolute best month yet.

However, there have been a couple of situations that left me fuming last week:

1. E-bay has announced that we are no longer to have any contact information for ourselves in our listings. So I would have to spend a few days to remove our telephone number from every one of almost 6,500 listings.

2. This comes a month after E-bay announced that we had to get rid of any active content in our listings by June. Fortunately Auctiva was able to do this for me on all but 122 listings. However, they should have been able to do that with all of them. So I'm going to have to spend at least 1 day of time I could be spending doing more important things to fix listings on E-bay that I have already created months ago.

The E-bay situation is not new, but this time it has become abundantly clear that E-bay is never going to stop trying to micro-mange my business. It's what they do. I have long believed that eventually the wholesale changes that they come up with would eventually slow down and ultimately stop - at least for a time. But, there seems to be no limit to the number of ways that they can micro-manage the businesses of their sellers, and I'm just waiting for that fatal policy change that comes at me  when I have 20,000 listings up and I'm half way through my contract. I feel fairly certain that this type of change is coming eventually. I just have no idea of when. It is that feeling of uncertainty and fear that gets me really down every quarter. You expect in business to have to be on your guard for external threats from demographics and your competition, but you never expect your largest threat to be one of your suppliers or service providers.

An astute analogy is to imagine that you are opening a store in a shopping mall. You sign a 5 year lease and pay $100,000 for leasehold improvements and fixtures, and another $50,000 in moving expenses. At first everything is wonderful, with sales coming in and lots of traffic. Then after a few months, you notice officials from the mall standing outside your store telling customers "You know, if you are looking for XYZ product sold by this store here, you can actually find it cheaper down there in that store". The mall management assures you that this is a good business practice because they want to make sure that the shoppers in the mall have the best shopping experience and that they will direct traffic to your store if your prices are lower. You tell them, that you don't understand how they can do this when you are paying them RENT and that you are not a store that competes on price. You try to explain that you compete on the quality of your product and your service, but it falls completely on deaf ears. You are told, "Well, you can cancel your lease and move out with no penalty if you wish. Thank you for being a valued mall tenant.".

Of course after dropping $150,000, you're not going anywhere, so you grudgingly accept this annoying practice and carry on. Then a few months later, mall management comes into your store with a new lease and tells you that by staying in the store, you are accepting the new terms of the lease. They leave and you begin to read the new lease. In the lease they tell you that after two months have passed, you will no longer be allowed to sell one of the products that you carry. No reason is given. You are also told that your prices all have to end in $0.99 because they have done studies that show that this is what shoppers prefer. So you have to go and re-price your entire stock, closing the store for a week, to do this. Again, you aren't going to leave, so you do your best and re-price everything, losing out on a week's revenue to do this. Of course, it doesn't wind up making any difference to YOUR sales, and you knew it wouldn't, because you know your customers. After its all done, things get back to normal, and you have a few really good months in the mall.

Then three months later, they come back to you again, with you guessed it, a new lease. This time they don't like your use of colourful window displays. They tell you that it is distracting to shoppers and you have to change your displays or move out. They also tell you that you are no longer allowed to have your website on your business card or a telephone number, and that the only way your customers can reach you is by coming to the mall in person. When you ask them why they are instituting such a rule, they tell you it is because they are seeing too many instances of sales being completed outside the mall and they just can't have that happening, since they feel entitled to a percentage of all the potential revenue from these shoppers. You've never had any calls from customers before, so you agree to the rule change. But you are annoyed because you just ordered all your business cards the month before, and took out an ad in the yellow pages. Now you are going to have to change everything.

And you sit there wondering: "what's next?" Are they going to tell me how many staff I have to have? Are they going to tell me what my price tags have to look like? What credit cards I must accept? and so on.

Sounds pretty absurd doesn't it? Yet, this is exactly how E-bay today does business and treats its sellers. They were supposed to be a venue, like the yellow pages, where a business could go to sell its product. For the privilege of the traffic, they paid E-bay a fee, and E-bay minded its own business. That is how it used to be before the MBA types who now inhabit management got a hold of it and started the metamorphosis that has turned it into what can best be described as a "racket". These people have clearly never taken ethics courses, or if they have, they weren't paying attention. There used to be certain ethical rules of good business that just didn't get broken when I was growing up in the 1980's and 1990's. I can well remember stamp auctions where you had to be a dealer, with a registered business to bid. Why? Because the auction houses at the time correctly recognized that if they allowed members of the collecting public to bid against dealers, they would be harming the businesses of the dealers - their largest customers. Nowadays, its a free-for-all at every auction, and I have had many collectors tell me that can't pay my retail prices for the full service I provide since they can just bid against me at the same auction I source my material from and get it cheaper.

So, not competing with your own customers used to be a big one. If you were a wholesaler, you didn't go into retail too, or if you did, you did it through a completely different company, so that it at least looked like you weren't doing it. Not taking actions that have the effect of injuring your customers businesses is a fairly well known ethic in business. In common tort law there is  concept of "tortuous interference", which is basically interfering in someone's right to conduct business freely, and it is a tort that historically has allowed the injured party to sue for damages. But E-bay does this all the time by a variety of different things too extensive to list here. However, a few of those things are:

1. They would place ads in your listings for competitors product if that competitor was selling something cheaper than you. They would also put ads from non-e-bay stores that were paying them into your listings. So if you were selling computers, they could put a "Best Buy" ad in your listing. WTF? right? You are paying them, and your competitor is paying them and they are advertising for your competitor in your listing. Unethical? Yeah just  bit. This year, they have stopped that, undoubtedly because they realized they would eventually be sued, but what they have replaced it with now is "promoted listings", which is a form of pay-per-click advertising that is only available to anchor stores like myself. This may benefit me, but it will hurt any seller without an anchor store.

2. They tell you that you have to accept paypal as a form of payment. You can't use any of the other payment gateways, which is odd now, given that supposedly Paypal was spun off from E-bay and is a completely separate entity now. To me this is a form of "tied selling" and tied selling as far as I know is illegal, or at least it was.

3. They manipulate the search results where they put the sellers with the lowest price first, regardless of how much inventory they have, or how much history they have with E-bay and regardless of the overall quality of their item descriptions. They do this to force their sellers to compete on price. They bump listings to the top that offer free shipping and downgrade those that don't. Again, they are trying to force sellers to offer free shipping if they want to be in the top of the search results. Sometimes they hide your listings altogether and don't display them at all. This later practice was clearly illegal and fraudulent when sellers were paying e-bay for each listing. So what E-bay did to get around this was they started offering free listings, but cut the top rated seller discounts and raised final value fees instead. This way they can always say that they can do whatever they want with your listings since you didn't pay for them anyway. The problem with all this is competing purely on price is not competing at all. It doesn't take any business acumen whatsoever to compete on price, and few businesses that do this blindly will succeed. Those that do have a very clear strategy and are aiming at a very specific market. To try and force every seller to compete this way is bad for the sellers, e-bay and ultimately the buyers, because it means that the sellers of quality items will be forced out and replaced by sellers of junk, and that is exactly what is happening.

So as you can see this makes me very upset. Unfortunately for me managing my emotions and concealing them at appropriate times is not my strongest suit. I tend to get worked up and my usual routine is to call customer service at E-bay and complain, trying to get someone more senior up the chain. For a while I actually thought I could reason with someone senior there, but after many conversations I realize that such is not the case. They really don't see good sellers as their greatest asset. To them, it is only the buyers that count, and there is no persuading them to alter course on this. Actually, they may well realize that we are a great asset to them, but they also realize how vulnerable we are as sellers. So the short term consequences of upsetting us is not great, since if one seller leaves, there are many sellers just waiting to give it a shot.

So I've had to realize that while my emotions may be white hot, and I might want to call E-bay and threaten to close my account or some such thing, it is not a good idea, and it is not going to help me deal with the problem, which is over-dependence on one sales channel. E-bay is convenient and relatively easy, but I can see that it is a very bad idea to continue being wholly dependent on them. The sooner I can develop a presence at stamp shows and a customer base outside of E-bay, the better off I will be. So this is just one example of many in business where one has to take a deep breath, step back and think strategically. Getting worked up, angry and depressed doesn't help you think clearly and it doesn't help you deal with the issues at hand. In business, as I am learning, there are going to be a lot of these situations, and while it is OK to experience all these emotions, it is important to be honest with oneself about what the primary driver of the emotion is. In other words, while I may feel very angry at E-bay for what they are doing, my real anger is to myself for being too trusting and not accepting sooner the fact that the rules of business have changed for a lot of businesses. If I accept the new reality, then I can't really be mad at E-bay. I simply make a decision to restructure my business to make the best use of them that I can. Maybe what it means is I only list the cheap stuff on there from now on. Maybe it means that I don't list stamps that have any probability of return, and so on. I'm not sure - I'm still figuring it out. But I wouldn't be able to see any of these clearly if I were still caught up in my emotions.

So, in closing, it is a very important lesson to learn in running a business: feel how you feel. Experience your feelings and get them out, preferably in  safe non-judgmental space, and then once you have let them out, let them go. Refocus yourself on identifying the real problem and finding a solution. But whatever you do, don't waste your time calling management, filing complaints, talking to ombudsmen etc. because whatever victory you will have will be nothing compared to what you have lost in your emotional health and serenity. 

Tuesday, May 9, 2017

Sales Pass $2,350 8 Days Into May and The Importance of Reflecting on One's Accomplishments to Maintain Perspective

My posts on this blog have become less and less frequent, and have gotten more and more business focused. This is a reflection on the reality of becoming an entrepreneur: In the summer of 2015 when I started this blog, I was excited by my newfound freedom. I was taking time to garden. I was literally stopping to smell the flowers. I was quitting at 5:00 pm every day. I was cooking gourmet meals and posting the recipes here. I was working out every day. But this was when my bank accounts were flush with one full year of my savings and when I either had fresh investor money coming into the bank account, or the promise of it. The reality of actually having to generate enough sales and re-invest to sustain the business had not hit.

In 2016 as the expenses of living in Toronto depleted our savings and I watched the bank balance go down, the reality hit me HARD. At the same time I became acutely aware that the interest clock was ticking on the money that the investors had put in. I was going to have to find a way to generate enough sales to:


  1. Make a living for Steph and I.
  2. Re-invest in inventory so that I don't run out.
  3. Pay my investors and have enough to buy them out when the time comes. 
It became apparent very quickly that as encouraging as it is to sell $100 in one day, I was going to have to get to a point where I'm selling between $300-$500 a day if I really want this to succeed. Little by little, as that realization set in, I began to sacrifice  and work harder and harder. Now, I am working late every weeknight until 2 am or 3 am, and I still don't feel like I'm getting enough done. 

What has happened in large part is that I have lost perspective. I have lost the ability to see my and Steph's accomplishments objectively. I've been so focused on putting one foot forward and then the other foot, that I haven't really sat back and reflected on what Steph and I have accomplished as a couple and what I have accomplished since I began this journey 4 years ago. 

So now, as our sales reach $2,350 in just 8 days, I want to reflect a bit and share our accomplishments as well as mine so far:

  • In January 2013 I moved out of my downtown Toronto home that I owned jointly with my now ex-wife, taking only my stamps and a few family heirloom furniture pieces with me. It was a major loss of nearly everything I had spent 15 years working hard for, as my ex had not contributed financially for more than half of our relationship. Yet, she got the house, which is now worth almost $600,000 more than we paid for it, at least. I was a new partner in a Toronto accounting firm, and although I made decent money, I owned nothing but my stamps. I was completely dependent on my position at the firm. Although I liked working with my clients, I grew to hate working in a firm environment. I hated the wasted time, pointless meetings that accomplished nothing and the constant politics, politics, politics. I spent the last year of my employment wanting to end my life - literally. 
  • In February 2013 I met Steph at a meetup for Beer Lovers, which is funny because Steph doesn't drink. She was wingwoman for her friend Jackie who was there to meet people. But she got more than she bargained for. She met me. Within 10 minutes of talking to her she revealed that she knew what a philatelist (stamp collector) was. I revealed my knowledge of gender politics, the Kinsey scale and fluidity of gender, and from that point on we were destined to become one. We dated for close to a year before we moved in together in January 2014.
  • In July 2014 I made the decision to leave my position as partner and to save as much money as I could to start my business. I spent 2 months on my business plan, and in November 2014, while I was attending a conference in New Delhi, India, I completed my financial projections which settled the question that had plagued me, which was "Is this business viable?".
  • In January 2015 I took the very difficult step of informing my partners that I would be leaving the partnership. That was one of the toughest discussions I have ever had with anyone. But I got though it and worked with them on a transition plan which would see me ease out of my role between then and July 2015. 
  • During my transition, several of my clients expressed an interest in investing in my business - something that completely took me by surprise. It stood as a testament to the level of trust and confidence that I had built with these people. While there were many people that couldn't understand how I could make a living selling stamps to collectors, not one person thought I was making bad decision, or at least no one said so. 
  • In July 2015 I left my position and started the business in earnest. I also started the three blogs that I write today. I have published well over 300 posts between all three blogs since July 2015 and I have grown the daily readership of my Canadian stamp blog to 300 visits a day and the others to 50-60 visits when the posts are published. Feedspot, a content reading service and feed-building service ranked our blogs among the top 60 stamp related blogs that are online just last month. I'm not sure how meaningful this award really is, but it is nice to be recognized. More and more of our customers are recognizing our blog and commenting on how much they like it, and there is no doubt about its role in driving sales. 
  • We started off with less than $20 a day in sales back in July 2015. In early 2016, we were getting $100 a day on average, and a good month was $3,000 gross. We were just starting to get the types of regular customers who would engage with us, but nearly everything happened within E-bay only. We were not generating enough sales to pay the bills, not by a long-shot, so we depleted savings. By the middle of 2016 all our savings was gone and we had to depend on two infusions of investor money to survive, while we continued to grow the business.
  • We suffered some major setbacks. One investor who had committed funds, which were essential to the execution of my business plan pulled out. I spent a good part of 2016 trying to line up another investor to replace the first one and he too pulled out in December last year. 
  • In October 2016 Steph and I got married. Steph managed through her incredible ingenuity to plan and execute a wedding for just over 60 guests, at a beautiful location in Toronto, with minimal help from me, and a weeklong honeymoon in New York, all for just under $8,000. Eight grand! She did this while we watched friends of ours spend $60,000 and $30,000 on their weddings. We paid for everything from savings and did not incur one scrap of debt to do it.
  • In September 2016 just before we got married, we drove 1,800 km from Toronto to Saint John, New Brunswick to look at houses. We found our house, which I have written about at length for $133,000. After we made our offer, we went to work to get the downpayment and financing together. As many of you who haven read the blog will recall, we nearly lost the house when our mortgage broker was negligent and the lender he was working with screwed us over. However, we found a local broker and we did manage to get our mortgage.
  • At the end of November 2016 we moved from Toronto to Saint John. Again, we managed to pay the entire moving expense bill with money we had saved. Steph, once again, managed to acquire the vast majority of our furniture for free or for very little from people in Toronto, who were trying to get rid of stuff. Again, she did virtually all of this on her own, so that I could focus on the business. 
  • We made it through the winter, with all its added expenses and set-up expenses of establishing a life in New Brunswick, including all the government fees associated with various licenses and registrations, fuel costs, water bills, property taxes, sewer bills etc. We have done this without going into debt.
  • We have now managed to grow the business to the point now where we are averaging between $150-$225 per day. I have established a relationship with a local accounting firm here and they value my work and send me work that I can do to make extra money. With all of that, we have been able to invest in turning the house into a Bed and Breakfast; I've been able to put $1,000 a month back into new stock for the business, and we will have enough to pay our investors - all without having to go into additional debt and raise more capital.
  • We went from renting a place in Toronto for $2,500 a month and literally pissing money away to owning a beautiful home here in Saint John. Sure, it may never be worth more than we paid, but even if it never goes up, it is still a worthwhile investment, give that the mortgage is less than it would cost to rent here. We are about to open a beautiful Bed and Breakfast, which probably won't get any guests this year, but eventually will. Once again, Steph all the work in this regard, so that I could focus on the business. 
  • We have customers who engage us by e-mail every day now. We do a lot of sales outside of e-bay and we have want lists and repeat customers who buy from us all the time.
  • We have our own logo and business cards that are building our brand recognition. Just this week, I have started including the cards in my mailings. 
  • We have been developing our own stand-alone website outside of E-bay, so that eventually, we won't have to pay $500 a month in E-bay fees, and we won't be at the whims of E-bay. Development on it has stalled, but at least we have a working website. 
  • After years and years of thinking I could never have pets because I was allergic, I got my first cat when I met Steph, and then in August 2015, Steph gave me Viktor. Viktor is a little black male Siamese, who looks just like a miniature panther. Every day, he jumps up onto my desk and curls up behind my computer screen and keeps me company. I am greeted by him first thing in the morning with his tail sticking straight up to tell me how excited he is to get food. He is a very dear friend, and I now understand after all these years why pet owners feel as they do about their pets. 
  • I have managed to maintain and deepen my relationship with my wonderful son Sequoia. I was worried back in 2013 that I would lose him in the divorce, as he was 18 at the time and the divorce was hard on him. Indeed it is one of the reasons why I don't think I will ever be able to fully forgive my ex, as she was the one who ultimately set in motion the events that lead to the divorce, and she chose to do it at a critical time in Sequoia's development. However, despite this difficulties that he has faced, I have watched him embark courageously on his own journey. He loves music. He loves to mix and produce music and that is what he is trying to make his career in. I have every confidence that he will succeed. I can feel it. I love that I get to be a part of that.  
  • Through all of this, I realize that my greatest accomplishment of all was finding Steph. Here is a woman who knows the value of a dollar, is thrifty with money and is happy to do stuff on her own. She understands that we are a team and she is happy to handle her responsibilities, while I handle mine. It is a complete 180 degree turnaround from my former marriage in which my ex demanded that I be involved in absolutely everything to the point where I couldn't focus on anything, or build anything. I am forever in this wonderful woman's debt because I see now just how unstoppable we are and have been. 
After writing this, I feel a new perspective: a much greater appreciation for Steph and a greater sense that we are ultimately going to be okay. If you are burning the candle at both ends and feel that constant sense of "there aren't enough hours in a day", I urge you to do the exercise that I have just done. Start at the beginning of your journey and make a timeline of events, important dates, setbacks you have overcome, things you have accomplished and savour it. This is especially important because your momentum moving forward is the best predictor of how your business will fare in the coming months. It is very easy to think that each month is just a fluke and to worry and stress about whether next month will be any good. This exercise should help alleviate some of that stress. 

Monday, May 1, 2017

April Finishes With Revenue of Just Over $6,000 and Some Thoughts on The Role of Money in Starting A Business

It has been a few weeks since my last post, mostly because I have been flat out busy with both freelance accounting work and the continued growth of the business. April has continued the trend of good, strong sales, with total merchandise sales of just under $4,000, and total revenue of over $6,000. It was not quite as busy as last month, but it is very close. One thing that is rapidly becoming clear is that a $3,000 is now a slow month, whereas this time last year, it was our best month. Furthermore, the local firm I am doing freelance work for is quite happy with my work so far, so I expect that I will continue to get work as long as they have jobs that need doing.

While I have been very happy with how the business is doing, I can't help but be sad sometimes that I didn't start the process of building this business much sooner - at least 15 years ago when I first conceived of the idea. E-bay was around then, and with a few technological exceptions, everything that was critical to the success of my business model was available then. But I didn't do it because I believed that everything had to be perfect before I could start: I had to have a full inventory and I had to have enough money saved up to live on for years while my business got started. The flaw in that line of reasoning though is that it never got started. 15 years went by before it did. The main reason why I allowed that to happen is that I over-estimated the importance of money in starting my business. The other reason why it happened was that I had too much money.

Now, don't get me wrong. Money is a critical ingredient to a new business. Without money you can't hire people, and you cannot buy stock. So some money is critical. However, what I have learned over the past two years is that what is even more critical is the development of a reputation, and the mastery of a viable business model. What do I mean by these two things? I'll explain.

You can have the best product in the world, but chances are you are not the only one selling it. When you start an online business, your largest challenge is gaining exposure and getting people, who already suffer from information overload to engage with your brand. This engagement is critical and is the first step in the sales process. Far too many people labour under the illusion that if you have a good product that people will just come and buy it without engaging with you first, or with your brand. While a few will indeed do this, generally it won't be enough to sustain a business, because people don't buy when they don't trust, and they don't trust people or businesses they don't know. This is why I love "tire kickers" whereas other business owners are often annoyed by them. To me when someone asks a question about my stamps, it means that they were interested enough to engage. Even if I don't think I can help them, I will try. The only time I won't is when the person contacting me is trying to engage me through my business media to discuss something that has nothing to do with stamps. Eventually, some of these people will become customers, or will tell other people about the business. Also, many people are reluctant to purchase items online with businesses they don't know or cannot read reviews about. Thankfully, E-bay has a built in system for customer reviews called "feedback" that gives potential customers an idea of whether or not a seller is reputable. Building up a solid feedback score with a long history takes time and isn't something that can be rushed. Building rapport with customers takes time also. Without your customer base, it is very hard to make sales, but with a solid customer base, it is much easier. So you are better off starting to build your customer base as soon as you can, even if you aren't in a position to stock a comprehensive product range when you get started. As long as you explain to your customers that you are in the process of building your offerings and that you make sure that whatever you do supply is of the best quality, you will build a good reputation.

The second reason why it is good to just get started on a small scale is that it will allow you to see, before you sink in too much money whether your business model is as viable as you think it is. After all, a profitable business is just the summation of a very large number of individually profitable transactions. If you can ensure that all of your transactions are profitable, then it will go a long way towards you being able to secure financing for your business idea later on.

This is where the concept of having too much money comes into play. If you start your business and you have a year's savings, then you have just enough to give you a reasonable cushion to give you time to get your business established. But you don't have so much that you can afford to rest on your laurels. You don't have so much that you can just overlook unprofitable transactions thinking that the profitable ones will compensate for them. You don't have so much that you won't be constantly re-evaluating the viability of your business model as new information comes to light, as you gain experience. The other thing is. you won't have so much that you won't feel an immense hunger to get the business on solid ground as soon as possible. That's a hunger that will push you to come up with ideas to make the business successful that you would just not come up with if the hunger isn't there. That lack of hunger is the major reason why businesses that are started on the side, with the idea that "I'll quit my job when the business can support us" rarely get to that point. It is very difficult to create the momentum that builds your reputation and moves your business forward if all you are spending on it is your spare time outside of work and family obligations. For one thing, your customers won't see you as someone who is dedicated to what you are doing if they can't get a hold of you when they have a question or concern about your product or service.

Many of those close to me have suggested to me that I shouldn't regret staying in the accounting profession for as long as I did. Usually, these well meaning friends and family members will point to the speed at which I was able to build my inventory and will say that I never could have done that if I were employed in a less lucrative field. While that is indeed true, I have found that I can only process and list so many stamps in the time that I have. It's wonderful to have such a large inventory at my disposal. But the reality is, most of it will just sit here until I get around to listing it, which could be up to 2 years. If I had started this business 15 years ago and taken a less lucrative, but less demanding job, I very likely would have been in a better position than I am today, for even though I may have had less stock to work with, it would all be listed. I wouldn't have the huge backlog that I have now. I would be light years ahead of the game in terms of having a reputation. By now, I would be a well known dealer in most professional circles, whereas right now I'm still relatively unknown. But probably most importantly, if I had started this earlier and earned less money, I would been a lot more careful about the financial decisions I did make during the last 15 years.  But having a large 6 figure salary allowed me to lie to myself. It allowed me to convince myself that it was OK to mortgage myself to the hilt and live a 6 figure lifestyle with my family, since "my day would eventually come". It never did though, and it was only after I left the profession that I got a second chance.

So I'm writing this post for those who want to pursue their dream and know very clearly what it is. Even if you know at 19 or 20 what that dream is, don't allow people to talk you out of pursuing it, or putting it on hold to "be responsible" by taking a high paying job. I say this because the longer you stay in that type of environment, the more difficult it will be to get out, and the more regret you will have from never having tried. You are much better off giving it your best shot and giving up only when it becomes clear that it is not viable economically. At what point is that? I would say that it is not at that point just because your revenue volume is low. A business idea is not economically viable when you cannot make an individual transaction profitable. In other words, if I couldn't sell stamps at enough of a margin to cover E-bay's fees and have a decent profit left after many, many tries then I would have known that my business model wasn't viable. Or let's take a different example. Suppose your dream is to be a disc jockey. If you couldn't get a gig that pays you enough to cover all your expenses of performing that gig, including a reasonable return on the equipment that you supplied, after many, many attempts, then your idea might not be viable.  But if you are able to turn a profit on even a small volume of transactions, and you know you can replicate those transactions, then your business is viable, even if it isn't yet self-sustaining. Your problem becomes how to sustain it until it can sustain itself. Your main options there are to seek financing from investors or to work part time or full time, though full time work has the major drawback that I have discussed.

Of course, it is much easier to secure financing when you can show that your fundamental business model is viable. That, you do, by showing what you have sold to date, and what profit you have been able to make. That is why on shows like Dragon's Den and Shark Tank the dragons and sharks ask all the time about sales volume. The contestants will go on these shows and talk about how wonderful their idea is and they will get interrupted with the question. "How much have you sold?", or "You mortgaged your house and put it all into the business. How much did you sell?". Most of the time when the person answers "none" of gives a low number like "$5,000" and they are turned down, it is not because of the sales volume being low. It is because their answer does not convince the dragons or the sharks that they have mastered their business model. If the contestants could show that their idea is profitable and scalable, then lack of funds is not a problem. But when somebody invests their life savings into an idea before they have proven its soundness to themselves, that is major red-flag to a prospective investor.

I want to go back to the example of the disc jockey for a minute though because it is much easier to judge viability of your business model when you are selling a product. Basically you will either be able to find or create a market for your product that is willing to pay you more for it than it cost you to buy it or you can't. In the case of a disc jockey or other artistic pursuit, you are still selling a product, but it is highly personal product (a personal service or your pre-mixed music). In that case your reputation and your connections became much, much more important to your success than they would be to someone selling a non-personal product that anyone can sell. I think the only time it would be appropriate to give up on something like this as a way to make a living would be if you had a very large following of fans but it was clear that those fans were not willing to pay you for your work. This often happens to bloggers for instance. I write two other blogs in addition to this one. My Canadian stamp blog gets up to 500 visits a day on a good day, and usually around 300. I have had a donation button on my blog now for over 4 months and I haven't received one dime from anybody for my posts. People are quite happy to read it for free. But none of my readers want to pay for me to write the posts that I write. All that means is that if my dream were to make a living writing stamp blogs, I know now that it probably isn't an economically viable dream. On the other hand if my dream is to become a stamp dealer, and to use my blogs to build my reputation and gain exposure within the collector community, then it can be very viable if that traffic leads to profitable stamp sales.

So don't make the mistake of allowing a lack of money to stop you from developing your business idea. Work on your idea, build your reputation and connections, and prove to yourself that you can make money at it. I think you will find that if you do that, you will be able to find the money you need to continue developing your business. It may not be enough to become a big business, but it will be enough to allow you to make a living doing what you love.



Wednesday, April 5, 2017

Announcing the World's First Bed and Breakfast Aimed at Stamp Collectors!





As many of my readers are now aware, my partner Steph and I recently moved from Toronto to historic Saint John, New Brunswick as we had a dream of operating a Bed and Breakfast, in conjunction with my stamp business. We bought a lovely 140 year old house located in the west side of the city, which used to be a Bed and Breakfast. We decided that it would be a fabulous idea to operate it as a Bed and Breakfast with a twist: it will be the first Bed and Breakfast that I know of, which is aimed at providing a quiet and cozy, stamp filled getaway for those of you philatelists looking to immerse yourself in your stamps, while having all your needs catered to.

We offer two guest bedrooms, each with their own self-contained bathroom, so that you can be assured of complete privacy in your room. Our room rates range from a low $95 per night for our Rose Gold Room, to $105 per night for our large Grandma Green Room. You can bring your stamps with you and sit in our comfy office, at a large table, with excellent lighting, and access to all the equipment you could want or need to aid you in your study: watermark trays and fluid; a signoscope; micrometers, ultra-violet lamps, instanta gauges, colour keys and so on. You will have access to our bar and coffee and tea station at all times, so that you can sip a cup of tea, coffee or a glass of spirits while you work. We provide a tasty range of fresh baked goods throughout the day as well, so you never have to go hungry while you are here. We will also provide you with most any philatelic literature that you request to have available during your stay.

If you do not wish to bring stamps with you during your stay, then you can always browse our extensive, specialized stock of Canada and British West Africa material from the comfort of our office. Our Nigeria stock is one of the most extensive in the world, and contains many rare items.

During your stay you will have access to me and we can discuss any philatelic topic that you wish to discuss. Our basic package for $100 includes all the accouterments described, plus a 10% discount on any of our stock items, plus a scrumptious breakfast. We can recommend a variety of restaurants for lunch and dinner. For those wanting the ultimate, pampered experience, we offer an unlisted deluxe package, which includes lunch and a gourmet dinner with your choice of drinks for each day of your stay.





We are situated on a large corner property, with a large yard, where you can relax with a book and a drink, while you are not working on your stamps. New Brunswick, and Saint John itself offer a wide range of physical attractions that you can visit during the day, that are all within driving distance. Some of the attractions that are well worth the day trip to visit are pictured below:

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Here we have Hopewell Rocks Park where there are some of the highest and most rapidly rising tides in the world. It is located just 2 hours away from Saint John to the east of the city. When the tide is out, you can venture well past the rocks, and when it is fully in, the water level will be well above the heads of the people that you see on the beach in the above picture.

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Then there is the Hartland Bridge, which is the oldest and longest covered bridge in the world at 1282 feet long. It is also located 2 hours away from Saint John, but to the north.

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For those who like to golf, there is the Royal Oaks Golf Club in Moncton, which is an hour and a half to the north-east of the City.

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About 10 minutes away from us, by car, there is a large covered market in downtown Saint John, where there is a large selection of organic produce and artisan goods.

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Carlton Martello Tower, is located about 400 metres away from our property, and offers a beautiful view of the city. It dates from the War of 1812, and was built as a fortification to defend the city against outside hostilities.

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The main street downtown offers a lovely array of shops and restaurants that lead down to a picturesque waterfront.

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The reversing falls, located in the city, are a series of rapids where the Saint John River empties into the Bay of Fundy. The tides of the bay force the water to flow in the opposite direction to the current when the tide is high, which is a unique phenomenon, and well worth a look.

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These three pictures all show the Irving Nature Park, which is the second largest park in the province. It is located approximately 10 km from our property, and is easily accessible by car in about 5 minutes.

We believe that New Brunswick is one of Canada's best kept secrets, and we are confident that once you experience it for yourself, you will agree. The temperatures here during the summer months are always between about 20 and 25 degrees Celsius, which is ideal.

If you want to check out our website, and learn more, you can get there by clicking the following link:

https://www.thecosycottageinn.ca/

Of course, if you don't collect stamps, we offer regular bed and breakfast packages as well.

We are accepting our first bookings in mid-May 2017.

Sunday, April 2, 2017

March 2017 Ends With Sales of Over $6,600 And Total Revenue of Over $8,100! We Did The Impossible!

After last week's post, the sales continued virtually unabated until March 29, when they slowed down to $20-$50 a day. I spent most of last week completing a file that I was working on for a local accounting firm here in Saint John, which I was able to bill at the end of the week, bringing the total revenue for the month to an unbelievable $8,100 - almost three months of revenue only a year earlier.

What does this mean for Steph and I? Well several things:


  • It means that as of today, we have enough cash coming in from various sources that we can fund our mortgage and pay off all our credit card balances this month if all we sell in April is $800. So far as of today, we have sold close to $700. So it seems fairly certain that we will cover all our bills. Normally we enter a month with a significant amount of credit card debt. The expenses normally get paid with the cards, which then get paid the following month. This is the first month where we can cover our balances plus expenses with what we have earned as of today.
  • This means that we can begin saving the funds required to pay a return to our investors this month. We are helped along by the fact that the warmer weather will mean little to no money spent on heat, which was costing us $600-$900 for each month since we arrived here.
  • We made it through the toughest period of the year: winter, without taking on additional debt, with the sales level that the business had when we arrived. After four months, we have grown the sales to a point where we were able to re-invest in more inventory, which we were not expecting to start doing until we got all our material listed. 
  • If the sales continue to exhibit this growth and stabilize out at these higher levels then soon, i.e. within the next six months, we will be able to start looking at hiring a part time or full time employee, to help free me up to post and source more material. 
  • While all of this has been going on, Steph has been working tirelessly to prepare our home to operate as a Bed and Breakfast, and this weekend, she got the website up and running and has set up the booking system. The only thing she has to figure out is how to link the online booking system with Paypal. So it would seem that we will have added a third stream of income to our sources, which lowers our risk even further.  

But why am I writing all of this to all of you folks who have been clicking on my posts? Am I merely gloating, or showing off? No. At least that is not my intent.

I started writing this blog almost two years ago because I wasn't sure if my journey would end in failure or success. But I wanted to give something back. I figured that if I did succeed, it would be easier for others to follow my path if I charted out my day to day progress, complete with a description of all my successes and setbacks.  I want others to succeed in following their dreams and reaching their potential too, and I believe that the social and economic changes in our society actually make it far more realistically attainable for most of you than you may realize. To be honest, I am still not 100% sure that it will lead to long term success. At this point I am about 90% sure.  However, what I am 100% sure of is that for at least a period of time, Steph and I have accomplished the seemingly impossible: we have fashioned a lifestyle that is self-supporting, in which neither one of us has to "go to work". We are getting very strong indications with each passing month, that we will not ultimately fail, because with each passing month, we are taking actions that serve to solidify the gains we made from earlier opportunities, while identifying new opportunities and pursuing those opportunities. 

Those of you who have read my posts from the very beginning will hopefully see the completely incremental nature of what Steph and I have done. You will recall those first posts when selling $100 a week was a major accomplishment, to eventually aiming for $100 per day. If you go back and read my earlier posts, I talk about how my blog posts, which I put hours of research into writing, were only getting 20 hits a day, and how excited I was going to be when we got 100 visits per day. You will see comments from my naysayers - those people who were quick to question the viability of my business plan and who were quick to point out that I was working for only pennies and hour, and why didn't I just stay in my job and make six figures and continue living in Toronto? Just yesterday I saw the traffic to my Canadian blog soar to over 500 visits. 500! More than 25 times as much traffic as I was getting just a year and half ago. Sure, it is not a million Youtube followers like Pewdiepie gets, or any of these other social media sensations gets. But I have to remember that I am serving an extremely small niche: I am writing detailed posts about the postage stamps of one single world country - Canada. A blog doesn't get much more focused than that. So to think that 200 people or more are visiting two to three times a day, or maybe its 500 people visiting once is pretty damm good I think. We just hit a sustainable level of revenue for the second month in a row, and we have solidified one alternative revenue source (part time accounting) while getting ready to create another source (the B&B). 

If Steph and I had stayed in our jobs, we would be trading the potential to achieve this independence in for the feeling of security. Notice that I said the "feeling of security", rather than actual security. I say that because when you commit the remainder of your adult life to a specific career, while you may be one of the lucky few to have a skill that is not likely to become obsolete, and thus enjoy relative job security, this security comes with a lot of other hidden risks and costs:

  • The desire for upward mobility in a career ties you down to a geographic location for an extended period of time and in the major urban centres, an inordinately high proportion of what you earn just gets pissed away every month on your cost of living. If you try to get around this by working in a smaller city, your employer will usually just pay you less, so either way you wind up living from paycheck to paycheck. The fact that everyone around you is doing the same thing normalizes it and gives you the false sense that you will be fine since everybody else has the same lifestyle, and they seem to be doing OK. Indeed, as long as you stay on the treadmill that this lifestyle represents everything is fine. But what if you discover one day that you have to step off the treadmill? Then what? How can this happen? What if you get sick for an extended period? What if your partner wakes up one day and decides to divorce you and take half of what is yours, so that you lose your motivation because you chose your career to make money to meet their needs primarily?
  • When you work at a job, the whole concept of saving for retirement comes into play because you can't simply decide as an employee to work for life. Most organizations have mandatory retirement, so that even if you are the most valuable member of the team, and the best employee that the organization has ever had, you will ultimately get the boot. This is a huge concern for most people because few know what to do with themselves in retirement, thinking of it as one very long vacation, which is fine if you manage to save enough and earn enough on your investments to fund that retirement. 
  • The sad reality is that most Canadians are not "richer than they think" and will not have saved enough to have the retirement that the banks love to portray in their commercials. It's not that they don't have a lot of money - they do. But the cost of the lifestyle that the retirement commercials portray is astronomical. Remember your last vacation where you went away for a week and dropped $5,000? Well, imagine that for 30 years! How many people do you know that have enough money to sustain that life for 25-30 years? People are living into their 90's now. So if they retire at 65, guess what? That's at least 25 years. What makes this even sadder is that by staying in the comfortable role they have carved out for themselves, most employees have allowed their skill sets to atrophy, and have not developed new skills that will allow them to develop their own sources of income. Indeed, many will simply not have the confidence or the knowledge of where to start. 
So perhaps the greatest thing Steph and I have gained in exchange for losing the six figure income yuppie lifestyle that we had in Toronto is the freedom of knowing that we can very likely survive on our own without a job and we can continue to grow our income potential, eventually winding up with more income than we had before. 

That was why I started this blog. I had a hunch that it was possible to create this freedom just as so much of the success literature out there says. But the problem that I saw with the success literature that I have read is that it does not do a good job of showing people how simple the rules of long-term success are, and how long it can take to achieve your goals. Hence, a lot of people give up way too easily because the prevailing success culture leads you to believe that success is just a matter of:

  • Knowing the right people.
  • Being in the right place at the right time.
  • Riding the next big technological wave and being the "first" to ride it. 
  • Having a one-in-a-million talent that no one else has.
Don't get me wrong: these things are all helpful and you will be able to reach far greater heights than you otherwise would if they are true. But our winner-takes-all celebrity worship culture places far too much importance on the above things. Indeed, it is my belief that they give too many people a built in excuse not to try. Too many people can look at the above list, see that none of the above apply to them and then resign themselves to the life they have. 

In contrast, I believe success is a long, incremental process. For me, it goes back much longer than the 2 years I have been writing this blog. Indeed, if I think hard, I realize that it goes back over 40 years:

  • For 40 years I have been studying, playing with and enjoying stamps. For most of that time, I was just pursuing a hobby with a passion. But what I was also doing was building a vast store of knowledge quietly as the years went on. This would place me in a perfect position to become a recognized expert all these years later, by enabling me to publish articles, that while not perfect, are better than a lot of philatelists would write. What's more, my experience with the subject matter enables me to write far more detailed posts faster, and more frequently than other philatelists. So even if a competitor decided to go head to head with me and start a rival blog, I am already 175 posts and two years ahead of them. The only way they would ever catch up is if I stop writing every week, which I won't dare do. 
  • When I started working in public accounting over 20 years ago, I developed a very strong work ethic, doing whatever I could to help the clients, whether or not it got me a raise. I worked hard whether or not it got me promoted. My ex-wife never understood why I did this, resenting the fact that I was spending less time with her than working hard for "nothing". Of course it was not for nothing at all. Because of my work ethic, several of my clients and former employers stepped forward and helped me finance the business. That would likely never have happened if I had not tried to go above and beyond the call of duty on a regular basis. I also would not have been able to handle the 70+ hour weeks that I am currently working now. 
  • I spent almost a year working a program called LMI Canada. LMI was all about teaching you how to succeed: how to identify your strengths and weaknesses; how to be scrupulously honest with yourself; how to set goals and hold yourself accountable to them and so on. I didn't know it at the time, but much of what I learned there has been critical to my success in establishing this business. 
My point in telling you this is that if you look at your life objectively, you will be able to identify areas where you have been developing skills, and passions that can, with the right amount of effort, be converted into opportunities that you can pursue. What it really takes is the realization that it is a long process, and then to be able to identify the steps in that process and have the courage ad determination to follow them.  

The first step in that process is to identify what it is that you are passionate about. To do that, look at where you spend your available money and time. The second step is to identify your superpower. My belief is that everybody has at least one. It could be your eye for detail; it could be your reflexes; it could be your charm; it could be your focus, and so on. Once you have identified these two things, the question becomes: "How can I use my superpower to provide value to other people, working at something I care passionately about, in a way that is consistent with my values?" To do this, look at what you spend more of your time on and ask yourself "What do I find myself constantly wishing existed that would make doing this thing so much better/easier/cheaper/faster/more enjoyable?" Write down your ideas. Then for each idea look at whether your superpower will allow you to successfully execute the idea. 

At this point you will have one or more ideas that you feel confident that you can pursue. You will not have made any lists of the obstacles you face, or the things you will need to accomplish. That is the next step. Make a list of the resources you will need to successfully achieve your goal. Don't worry if it seems impossible to secure those resources now. Just spend some time identifying what they are and write them down. Then for everything on the list, make a list of the various things you will need to do to to get to where you want to be. You will find yourself making savings goals, possibly changing jobs, and being much more discriminating about how you spend your free time. That's good. That means you are making the mental adjustments that will eventually solidify into habits. Once you have developed habits that are consistent with getting you where you want to be, then you will start to visualize yourself reaching your goals, and that becomes a very powerful source of motivation that will propel you through the uncertainty. This is important, because some of the steps in this process may take years. For example, if you determine that having a high value skill would be important, so that you can do part time work while developing your business, you may have to go to school to acquire your credentials. That may take months or years and tens of thousands in investment. To be able to make that kind of commitment and follow through on it consistently, it will be critical for you to be able to see clearly how what you are doing today contributes to what you want to be doing tomorrow. 

The entire secret, as far as I can see after this is being able to doggedly follow your plan, day after day, week after week, month after month, and finally, year after year. Of course, at the same time you have to be adaptable and know when the time has come to alter course slightly, or change it completely. Knowing that becomes much easier when you know the people you are trying to help, and what they need. For instance, I know that there are many stamp collectors who don't like to buy at auction, who only have a limited amount of money and time to spend with their stamps, who specialize and who like to collect Canada. Knowing that means that I have tailored my approach to allow them to buy only what they want, at a fair price, when they want it. I don't have to get too distracted by what I see my competitors doing, as long as my business model is working and yielding results, which it is. By not getting caught up in reacting to what my competitors are doing or not doing, I can stay focused on meeting the needs of the customer group that I am serving. The key to being able to do this successfully is to differentiate yourself so well from your competitors that you are not vulnerable because of what they do or don't do. Of course you have to have done enough market research or have had enough experience with your market to know that your business model is viable. But once you do know that it is, it is essential to stay focused on developing that model and perfecting it rather than reacting to what your competitors are doing. For one thing, what makes you think that your competitors have put more thought and insight into what they are doing than you have? That might make sense if you have never tested your business model, but not if you have and you have solid proof that it works. 

My point is that my passion lies in an area that most of you would think is so damm obscure I'll bet you would have a hard time visualizing how it could yield enough profit to make a living, and yet it does. The wonderful thing about the diversity in the world and the ease with which the internet allows you to reach people is that there is a market for nearly everything you can imagine. The only real question is whether the market is large enough and accessible enough to make a living serving. I believe that in most cases it is. If I can create a business from something as obscure as selling Canadian postage stamps, I am very confident that most of you can find a way to make a living pursuing your passions. You just have to find a way to use it to serve others. 

Saturday, March 25, 2017

Sales Pass $5,700 With A Week to Go In March, Keeping The Momentum Going & Effective Use of Credit

March 2017 is set to become our best month yet, with sales just passing $5,700 with a week to go in the month. Also, the business will have earned $1,200 from part time accounting work, bringing total revenue for the month so far to $6,900! In Toronto, that would not have been enough yet for the business to be self-sustaining, but here in Saint John, that is enough revenue to pay all the bills and re-invest $1,000 a month in inventory to keep the momentum going. I don't want to jinx things, but I predict that we may just hit $7,500 in total revenue for the month.

The local accounting firm that I work with here has just informed me that one of their senior managers is leaving for industry and they want me to take on more work. I eagerly agreed, but I have to watch that I don't take so much on that it cuts into my efforts in building the business. At the moment, I am burning the candle at both ends, working from 9 or 10 am to about 2 or 3 am every weekday. On weekends I kick back and relax with my fun stamp collection, or my writing or just hanging out with Steph.

So with things going well now, it is apparent that we have to keep the momentum going. We have customers that are engaging with us almost weekly, so the question becomes how do we do this? Well, we could simply list more material. But we don't know if the customers buying from us regularly now will be interested in the material we haven't listed yet. We do know right now that Newfoundland is selling amazingly well, particularly between about 1921 and 1949. Therefore, it would seem logical to reinvest some of our profit in keeping this area well stocked, at least until sales drop to a level consistent with our other store categories. This is true even though we have a 2 year backlog of inventory. However, it is critical not to add to the backlog, and to continue to whittle away at the backlog. Thus, my challenge is to juggle:
  • The extra accounting work that I am being asked to take on.
  • Listing the recently purchased Newfoundland material as soon as it comes in.
  • Continuing to list the other material.
  • Maintaining both the Nigerian and Canadian stamp blogs.
Fortunately now that I have published over 200 blog posts, I can always add to my earlier posts and re-publish them as updated posts if I run into a situation where I just don't have a full day to research and write two entirely fresh blog posts. In fact, I am thinking of doing just this in a few weeks. After realizing that I needed to buy more Newfoundland, I decided to focus on the 1937 Long Coronation set, which looks like this:












I had noticed as I was listing these, that I was finding differences in the sizes of the perforations around the edges that were not listed in any of the well known publications. I listed them on a lark, and found that my customers were buying them within minutes or hours of listing them. So it seemed to me that the logical thing to do now was to see how many of these sets I could purchase from other dealers with a view to going through them and looking for the different varieties, so that I could sell more of them to my customers who I know are interested in them. So with that in mind, I went through E-bay and Hipstamp and spent about $850 on 35-40 sets, or about 350 stamps in all. I fully expect that I will find more perforation varieties, paper varieties, interesting shades and so on. I had published a detailed post on this issue last month in the Canadian blog before I had found these other varieties that I am talking about. So what I can do now, once this material comes in and I have gone through it all, is to update the post that I published last month with details of the new varieties I have found, along with a list of all the varieties that are in my stock, with a link to the store. This is a perfect way to build on the interest I have already created with my customer base, without having to invest the time I had spent before. 

This actually applies to the business in general, in the sense that the toughest part about getting it established is listing the inventory and writing blog articles for each issue that I carry. Once I have completed this process once, I can use my old listings as templates to write new listings, which means that I will be able to list material in about 40-50% of the time it took me before, but it also means that I can start hiring other people to work on my listings with a minimum of training, since they already have something to work with that I built. Also, as I buy more material, and learn more things about each issue, I can keep updating my earlier posts, which will continue to build interest in my material. 

In addition to stamps, Steph and I have decided that we want to operate the house as a Bed and Breakfast again, which it was before we bought it. So Steph has been very busy acquiring items for each of our 2 guest rooms and the rest of the house in preparation to open for the Digby Ferry crowd, which comes in the summer and fall. This will be a nice added source of income as well, even if we get one booking a week for the six months that we are planning on operating. She has done an amazing job so far, and I will post new pictures when the house is ready. We are considering offering a special deluxe getaway package to stamp collectors where they can come for a week or two, bring their favourite stamps and work on them in quiet solitude, while they have their every need looked after. I think it is a fantastic idea that will attract guests from around the globe, as I do not know of any B&B that caters specifically to stamp collectors. Finally, I am also considering offering seminars in the dining room on Sundays, where I will give a presentation about one topic and serve tea and biscuits to my guests. That is a few months off, but we are both excited about all the possibilities. 

The last thing I want to talk about is the importance of establishing good credit facilities, and making effective use of them. One of the challenges that you will face when you start a business is fluctuating cash flow. Your lines of credit, and credit cards are your friend in this regard, as long as you do not carry balances for long periods of time. Our goal is to not carry balances at all, but we recognize that it may be necessary to carry a partial balance for a month or two if business is slower than normal, or if I have had to make an especially lucrative purchase. 

As you may be aware, credit cards give you a grace period for payment within which you pay no interest at all. The trick is to know your statement date, your due date, and to make sure that you pay at least the minimum and preferably the entire amount by the due date. For example, my Visa card has a statement date that generally falls between the 15th and 18th of each month. I get almost another month to pay this balance, which I have done in full, every month so far. Now, I have three credit cards, all of which have different statement dates. Because of this, I am able to increase our financial leverage by choosing to use different cards to pay for items depending on which time of the month the expenditure falls. Now I have to emphasize that I'm not robbing Peter to pay Paul here, as each and every card is always paid in full every single month. However, if it was necessary to carry a partial balance on one card in a month, the balances are small enough that it really isn't the end of the world. To illustrate what I am talking about, I will give you an example from this month:

1. Our oil deliveries for heat were on March 3, and there will be another one probably next week, and these are about $400-$500 a pop. The oil company gives us trade credit for 30 days from the delivery date, so I can pay for the March 3 delivery, with my Visa in early April, knowing that it will appear on my April statement, which won't be due until early May. The late March delivery next week will fall due in late April. As long as I make the payment for this after April 20, it won't appear on my Visa until the May statement, which won't be due until June. By the time I pay this, the weather will have warmed up to the point where we don't have to buy oil anymore, so there won't be any more charges of this nature until the fall. 

2. Our internet bill is usually due at the end of the month, so using the Visa to pay it gives us another month to pay it off. 

3. We use a different credit card for our groceries, which has a payment date that falls around the 20-25th of each month. 

All of these cards earn reward points as well, which we can eventually redeem for vacations when the time comes that we can actually afford to travel. It's a nice little quiet bonus ticking away in the background. We don't give it much thought, but it will be very nice when we are actually able to pay for airline tickets entirely with points that we got for doing nothing more than effectively managing our cash flow. 

The upshot of all this is that I usually make three payments a month: one at the beginning of the month for one card, one between the 10th and the 15th of the month for the second card, and one at the end of the month for the third card. The business generates cash in between each of those dates that is generally sufficient to fund the mortgage, the insurance and the required payments on the cards. As long as the cash flows are at least $3,000 a month, the cards give me leverage to handle about $4,500 worth of expenses without having to pay any interest, since the extra $1,500 can be paid with part of next month's cash flow. This would only be a problem if the cash flows suddenly stop altogether. However, between the business, the accounting work and the Bed and Breakfast, this is unlikely to happen. So while you DO NOT want to rely on credit to the point of getting heavily into debt, using it effectively to manage your cash flow, can really make a difference in your business. I used credit to buy the Newfoundland material I discussed above because I know that I can receive, sort, list and sell at least half of it before the payment date comes due. But understand that I wouldn't dare do that for any material that I wasn't absolutely certain I could process and at least partially sell by the time the payment came due. 

 I have to point out that I haven't mentioned taxes on this money. The reason is that I have a large shareholder loan, of about $60,000, which represents money that I lent to my company while I was working. Of course all that money was money I had already paid a substantial amount of tax on. Under the Canadian tax rules, I am allowed to take that money back out of the company tax free. So for at least the next year and a half, I can live on the money the business generates almost tax free. I may have to pay some tax at the corporate level, but it will be minimal. Then once the business is at the point where the inventory is all listed and cash flow is consistently over $6,000-$8,000 a month, I can draw a salary. 

So I hope you all find this tip to be helpful. You will find that your access to new credit will all but dry up the minute you become self-employed. So the trick is to apply for and establish your solid credit while you are working. As long as you are making your payments and the banks are making money from you, they aren't going to take your credit away. It is therefore critical that you use it very wisely, because if you don't, you will wind up destroying your credit rating. But if you use it well, you will be able to weather the storms that will hit you in the early years of your business, and you will emerge from them with a better credit rating than you had before.