Wednesday, November 23, 2011

I am a business MACHINE

So a few months ago, after I had sold CashDuck and gotten that all squared away, I began to feel.. bored. Restless. I'm not used to not having a business to take care of! I'm still writing for MoneyCrashers, but that doesn't occupy my brain in the same way. I started browsing around looking at businesses for sale. And then, because I don't always think things through, I spent the last $1000 I had in cash on a new business. Hooray!

After a few months of running the business, I had had some fun, learned some things, and spent some unnecessary money, but didn't think that this was the business for me. So I thought I'd put it up for sale. And I did, and I got emails from several interested parties, and now I am about to sell it for, all told, a profit of $1200.

That is what we in the biz call Not Freaking Shabby.

I mentioned this to a friend of mine, who had been watching the goings-on of my business acquisition with interested, and he said, "If you're going to flip another business, I would be up for investing in it."

I hadn't actually thought of what I was doing as "flipping" - more like repositioning. The website where I bought the business specializes in selling websites, but doesn't generally deal in honest-to-Pete businesses that have been well established and have cash flow. (More like sites cluttered with AdSense ads and affiliate programs.) So a lot of the increase in price on the site was related to the fact that I put it up for sale on a site that sells real businesses - restaurants, dry cleaners, etc - for which people are willing to pay real money. It's a matter of selling to people who are prepared to pay what a real business that earns real money is worth.

But I said I'd keep an eye out, and a couple weeks later found a nice website with solid revenue and tons of traffic, which was being sold at a really low price - both because it was on the cheaper website, but also because the owner needed the money immediately. It was pretty obvious that no one else was willing to pay even close to what the owner would have wanted for it, because the next lowest bid to mine was more than a thousand less. (The cheaper site uses an auction system, but not an eBay style of auction where your bid only goes up as much as it needs to in order to stay winning.) So I bid a price that was a little below the reserve but would still be attractive to the owner, and went to bed. No one else bid, and in the morning we worked out a compromise with the owner and started the process of transferring the site.

So I have now been in control of the site for about two weeks, and things have been going well. I'm back in that feverish business-mind mode where I'm constantly thinking about stuff I want to add, programs I could start, what's going to be in the newsletter, etc etc. It's frustrating sometimes (like when AdSense put the account on review and then took it off review three times in one day) but I realize how much I really enjoy this kind of work.

The end game for this site is to sell it probably in January or February (hopefully, once we've captured both Christmas and Valentine's Day sales!) and make some money, both from the profit it's making as it goes along and on the higher price we'll sell it for. I am a really enthusiastic seller, because with both this site and the previous site, I think it's a great investment for somebody who wants to have a good solid moneymaker. So it'll be interesting.

I've checked off most of the things on the starting-up to-do list, like getting a bank account and a PO box, so now I'm turning my attention to the products on the site. The previous owner didn't seem to have paid much attention to which products were selling and which weren't, and since it's drop-ship I can see why, but people like to see a carefully curated collection of items and don't want to wade through a list of everything you think they could possibly ever want. So I'm deleting stuff that no one has ever bought or even looked at, and adding new products that are similar to the top movers. The previous owner had also never sent out any newsletters, so I'm hoping a few carefully timed Christmas newsletters and promotions are going to bring people back who haven't been there in a while.

Tuesday, November 01, 2011

State of the debt November 1st

How I'm doing as of November 1st:

Total debt: $40,585

Bank of America $7,916
Amex Blue $2,103
Amex Gold $0
CareCredit $417
Chase PerfectCard $6,779
Chase Universal $5,545
Discover $4,205
Student loan debt $13,620

Total assets: $33,455

Savings (in various accounts) Basically nil
Traditional IRA $23,257
Roth IRA $1,387
401k $4,484
SEP-IRA $4,327

Net worth: -$7,130

In July my net worth was almost $2k higher, but I'm actually pretty pleased about this month's number anyway. Because:
1 - I sold my previous car and bought a new one worth about $1k more. I used savings to fix some things in the old car so I could get the best price for it, and to pay for the "upgrade" and fixing the new car's condenser.
2 - I also used savings to buy a business. Yes, I know I just sold the last one, but it looked like a good opportunity and the price was good. I will probably sell this business fairly soon, as I put a lot of time and money into upgrading it (new shopping cart system, affiliate program, etc) and will hopefully make about a thousand bucks on the deal. Not bad for a few months' work.
3 - I didn't know it at the time, but July was the high point for my investments' worth. The markets have been pretty bad and overall my investments went down about $2500. However, since I am aggressively paying down my debts (at the rate of about $1,000 a month) my debts going down outpaced my investments going down somewhat. So most of the loss of net worth is due to me spending my cash. I guess technically my car and the business are assets, but I don't like including them here since they are not particularly liquid. But, I will use some of the proceeds from selling the business to pay down debts, so it'll eventually show up on the balance sheet.

The one thing I'm not too pleased about is the fact that I have practically zero cash on hand. This makes me very nervous. I've started my Christmas shopping, and after spending $300 have presents for most of the people on my list. (I like to get started early, and make sure I have something at least halfway good for everybody, and then if I find something better later, either they get multiple presents or I put the less-good one in the present pile for anyone I forgot to buy something for.) I have a good chunk of change coming in this month from various projects, but none of it's here yet, and then I'll need to spend it on getting the car's heater fixed (go me, buying a car that neither heats nor cools!) and taking the dog to the vet. So here's hoping that nothing goes too wrong between now and whenever I manage to save up some money. I had set a goal of paying off my Amex cards by the end of the year, and I did pay off the Gold card, but have not made as much headway on the Blue card. Hopefully if I sell the business by the end of the year, and get cracking on other projects to make money, I'll still be able to meet that goal.

The other day I opined to Boyfriend about how much f&$!@# money I will have once I pay off my debt, given that I turn over essentially half of each paycheck to debt. I make a decent salary, so if I'm not paying $1k a month to someone else, we could go to Italy twice a year without any trouble. He regarded me balefully and said, "Yeah, but by then we'll have kids, so we still won't really have any money." Voice of optimism.