The first quarter of 2014 came to a close on March 31. I did some analysis of Abby Glassenberg Design's income and expenses and I thought I'd share them with you. I found this process to be incredibly valuable at the end of 2013 (see my 2013 income report here), and have decided to try looking closely at the numbers on a quarterly basis this year.
Abby Glassenberg Design Gross Revenue for the 1st Quarter
In the first three months of 2014 my business grossed $11,789. Here's a breakdown of where the money came from:
Clearly pattern sales make up the largest share of my income at 53% for a total of $6,257. My business-focused ebooks are also doing very well, bringing in $2,259 or 19% of the income. I only have two of those ebooks so they're really pulling their weight. Resale goods are things like hemostats, rattle inserts, squeakers, etc., that I buy wholesale and resell. This category also includes my two books which I buy back from the publisher at 50% off and resell in my online shops.
Speaking of books, let's look for a minute at the royalties category. This quarter I got $490 from The Artful Bird (royalties are paid twice a year). The rest ($661) came from my Simplicity patterns. Even though Stuffed Animals came out in May of 2013 and was named an Amazon best book of the year I have yet to see any royalties beyond the $7,000 advance I took. In fact, due to the way bookstores buying and returning cycles work, I'm even more behind now than I was six months ago. Getting that statement a few weeks ago was a serious bummer. Interweave does an amazing job promoting their titles whereas Lark does next to nothing, and it shows. I'm super proud of that book and I know it was a valuable contribution to the craft community. It's simply very, very difficult to make money from a craft book.
PDF patterns, on the other hand, are a great way to earn money doing what you love!
Let's look at the breakdown of pattern sales by pattern:
The success of the Family of Dolls ebook has spurred me to create more pattern bundle ebooks. Two or three patterns sold together with extra bonus content is a really good value and an attractive product. There will be more of these. I'm excited that Humpty Dumpty has done so well because I'm super proud of him!
Both pattern sales and business-focused ebook sales were boosted this quarter by two guest posts I did: one on Sew Mama Sew and the other on The Crafty Gemini. Guest posting on blogs that really hit my target audience is a great sales strategy.
A few notes on jobs I turned down this quarter. A fabric company asked me to design a project that they could give away as a free pattern on their site. I quoted them $450 and they turned it down saying it was too expensive. Looking at what I can make from a single pattern over the course of a year, $450 is an appropriate price so I feel good about not taking this job. A publishing house asked me to contribute a project to a collaborative book for $150. I turned it down. Not long ago I would have taken both of these jobs, but now I feel like it isn't worth signing over the copyright to my work for so little pay.
Abby Glassenberg Design Expenses for the 1st Quarter
I made an exciting, scary,and expensive decision right at the end of this quarter. I'm getting a new website! I've been desperate to get off of Typepad for years now and I'm finally doing it! The first step was finding Fantasktic, a company that specializes in migrating sites from Typepad to WordPress. I checked with my friend Jean who used the service and she raved about it. Seeing her clean, professional WordPress site made me want to hire a designer and really do it right. I liken it to building a new house. I want it to be a well-built, lovely space. I'm also getting holistic branding for the first time, including a new logo!
From what I can tell business experts encourage new businesses to reinvest a significant portion of their earnings during the first three years. It's incredibly difficult for me to spend money, but everything I do depends on the this site and I'm ready for it to really work for my readers (easy access to the archives, clean, modern and professional, while also being beautiful).
I got a quote from one designer for $750 and another for $16,000. In the end I went with someone in the middle. I'm paying $6,000 for the new site design, plus migration and hosting costs. I put down half the money this quarter, thus the sad look of this chart.
My total expenses for the first quarter were $6,719. If I hadn't chosen to begin the process of getting a new site, my expenses would have been $3,461 less.
Can I just point out that I only spent $41 on art supplies! Yay! The capital good was my new microphone for the podcast which was totally worth it.
Abby Glassenberg Design Net Income for the 1st Quarter
Let's do some math!
$5,070 net income
Again, without investing in a new site the income would have been highter at $8,531. Multiply it times 4 and I would have been on track to make $34,124 this year. It's painful to reinvest some of that money, but I know it's the right decision. I want to grow. I've got big plans and I need a great home for them.
I can't stress enough how informative weekly bookkeeping has been for me. If you don't do it already, start now. I do it on Friday mornings. Some weeks it takes half an hour and other weeks more like two hours, but it's so worth it for the ability it gives me to analyze how things are going.
Please know that none of this money comes easily. I work about 25 hours a week now. It's nearly 11:00 pm as I write this and I'll be up with 3 kids at 6:10 am tomorrow. I love every minute of it, but it doesn't just happen. I also know that I could make more money if I expanded my pattern line to include things that are more mainstream in the sewing world, but I love softies and dolls and that's where I will always be.
If you have questions or thoughts about my 1st quarter income report, please ask! The more we talk about real numbers, and real money, the better informed we are and the better decisions we can make.