Throughout 2014 I’ve shared my income here each quarter(1st, 2nd, 3rd), along with some financial analysis. My goal was to talk openly about money and the work involved in growing a creative business online.
This experiment was inspired by one of my favorite blogs, Pinch of Yum. Owners Bjork and Lindsay Ostrum share their income and traffic monthly and I’ve learned a tremendous amount from their generosity (I interviewed Bjork for an early episode of the podcast). Each month I would read their report and say, “Someone in the craft community should do this.” At the start of 2014 I decided that someone could be me.
I have to say that it’s been a terrific exercise – at times terrifying, but also very freeing. I know there are designers who make a lot more money than I do. It was scary to show them what I was earning. I worried about appearing too profit driven and making customers feel like my heart was in the wrong place. I’m glad I persevered. I’ve gotten dozens of emails from women who’ve said that these income reports were the thing that convinced them to start a creative business and that’s amazing.
Okay, my books are open again. Let’s take a look.
In the 4th quarter of 2014 (October – December) my gross revenue was $9456.90. That’s down a bit from the $11,233 grossed in the 3rd quarter, but it’s actually really good news. To see why take a look at this graph:
Almost all of my income this quarter came from the things I’m directly in control of: patterns, ebooks, and resale goods. Those things made up 93% of my income, for a total of $8793, (up significantly from $8084 last quarter). The reason my total revenue was higher last quarter was because I received several royalty checks, but here’s the thing about royalties: they’re very hard to control. I can’t predict how much I’ll get, if any, in a given quarter. The sales of patterns, ebooks, and resale goods on the other hand are under my control. Their increase this quarter is a direct result of my marketing efforts.
Let’s look at the sources of the pattern sales:
My WooCommerce shop (that’s the one that’s here on my blog) outearned my Etsy shop for the second quarter in a row. I earned $4,696 from my WooCommerce shop (up from $4047 last quarter) and $3,329 from my Etsy shop. This is again good news. First, WooCommerce is a free WordPress plugin whereas Etsy cost me $210 in fees this quarter. And second, the WooCommerce sales are a direct result of my efforts in blogging three times a week and sending out a weekly newsletter to 5,000+ subscribers. Etsy search and Etsy’s policies are out of my control, but WooCommerce? That’s all me.
Now, let’s look at expenses. My total expenses for the 4th quarter were $2,922.
Running an online business isn’t free. I think sometimes people don’t realize how expensive it really is. I spent $651 on online services this quarter (including website hosting and MailChimp). The bigger your site and your following grows the more you pay.
I realized that I haven’t talked about traffic in these reports, but I think now that I should have. My blog gets about 110,000 pageviews each month, a number that’s doubled over the past two years.
When looking at my expense graph you’ll see that the “Other” category looks rather large. That’s because I bought plane tickets for $445 to fly to California for Craftcation in March. As a speaker at the conference my admission fee and room charge are waived, but I still have to pay for travel expenses.
I do want to highlight one other expense. I spent $34 on art supplies (fabric, thread, embroidery floss, stuffing, etc.) this quarter. It’s a tiny expense (only 1% of the total). When a fabric company offers to give me materials in exchange for a blog post, this percentage has allowed me to see that fabric isn’t really an expense that I need help covering.
Okay, time to do some math.
$9456.90 in gross revenue
-$2922.00 in expenses
_________
$6534.90 net revenue for the 4th quarter.
—–
This year I worked about 25 hours a week while being a stay-at-home mom of a 10-year-old, 8-year-old, and 4-year-old. This means I spend almost every moment that I have to myself working (eking out 25 hours a week of time to myself is a big challenge and means I work at night and on the weekends). I run 5K four mornings a week which takes an hour out of my workdays. I could work during that time, but running makes me feel good.
The business is growing and I love every aspect of what I do which isn’t something I can say about any other job I’ve ever had.
Let’s wrap up 2014 financially, too, while we’re at it. To do that, though, I think we need to look back a little bit first and think about growth:
In 2012 my gross revenue for the year was $2,689.
In 2013 my gross revenue for the year was $25,243.26.
In 2014 my gross revenue for the year was $40,499.
How did this happen? What changed in those years? The most succinct answer is that I changed. I got serious.
I incorporated my business. I opened a bank account. I started doing weekly bookkeeping and using a calendar to plan the year. I started a newsletter. I paid a designer to make me a robust website. I wrote three blog posts a week without fail. I made 39 episodes of a podcast. I created a newsletter subscriber base and sent out a newsletter every single week. I made new patterns, wrote ebooks, and figured out what products to sell. I was on Twitter, Instagram and Facebook every day. Essentially what changed is that I decided to work on the business in a focused, dedicated way and the result is that now I actually have a business.
Here’s the breakdown of revenue:
My business as it stands now is a sewing pattern business (52% PDF patterns + 13% licensed patterns = 65% of my revenue). My business-to-business ebooks are pulling their weight for sure, though. There’s only two of them (versus 40+ PDF sewing patterns), but they make up 15% of my income. This is an area of future growth for me.
Before I show you my expenses for 2014 I need to do some explaining. This year, for the first time, I paid myself. A decade ago when I left the traditional workforce (teaching middle school) to raise our three children I left a paycheck behind. This is the first time since then that I’ve gotten paid. I took a $12,000 salary this year and paid FICA (Social Security and Medicare taxes) for the first time in 10 years.
Paying me was my business’ most significant expense (categorized as Corporate Expense below). Freelancers was high because I paid $7,000 for branding and a website earlier this year.
So, my total expenses for 2014 were $30,108.
Let’s do the math:
$40,499 in gross revenue
– $30,108 in expenses
_________
$10,391 net revenue
That money stays with the business.
And it leads me to the next stage. Over the past two years and after reading a recent Jeff Lerner review, I’ve felt like I needed to prove that I could turn this sewing thing into a profitable business. I needed to prove that I could stick to it and make it real. In order to do that I saved every single penny. Often I did things on the cheap because I didn’t want to invest in something that might not pan out.
Now I feel that the point is made. Yes, this is a real business. Yes, I’m here to stay. I love this.
In 2015 it’s time to take that $10,391 and reinvest in order to strengthen what I’ve built and expand it. I’m ready to pay an expert to do the things that I need help with like graphic design and photography for my patterns. I’m ready to travel to trade shows and conferences and meet people in the industry face to face. I’m ready to make this into a career rather than just a job.
I love reading ‘Pinch of Yum’! Their monthly income reports are so awe-inspiring. Good on you to do that too. I don’t think I’ve seen it talked about much in the craft world, so I appreciate your honesty.
Amazing – the change from year to year is just astounding. That’s not just the result of your dedication, it’s the result of you successfully analyzing which areas of your business deserved the most focus, and choosing wise places to invest your time. You have both sides of what it takes to be a successful artist – the creative side, and also the analytic side that can handle the business aspect. Larger businesses have designers, marketers, copy writers, accountants… you’re EVERYTHING, and you’re managing to pull it off in 25 hours a week with three children. I love it. I also think you are brilliant and exceptional – if you gave me 25 hours a week, I promise you I would not have Abby Glassenberg level success. Wishing you a great 2015 – congratulations on growing your business, and on being transparent so you can help others. It’s inspiring!
Thanks, Kelly! And you would totally have massive success if you decided to create a new career for yourself as a writer.
Thank you for these reports this past year. It has been eye opening to see what it takes to make a successful craft business, and what success looks like,
I love that you blow social expectations that women have to be modest about their success and the work it takes to get there. You own it, without whining, without false humility. Thank you thank you thank you.
Thank you Jodi. That means a lot to me.
I love love LOVE how you mentioned that you paid yourself a salary. Too many entrepreneurs fail to do so, and figure the profit is their income. It’s super important to get right.
Right! The profit belongs to the company. The company then pays you as it’s employee.
Congratulations on defining and building yourself a career! May 2015 be a continued success story for you.
I loved this post! Totally loved it!
I’m about to start a small creative business here in Spain and I just love to read your reflections on having a small brand and investing in it to get a career out of it. I am sure 2015 is going to be a great year for you!
I love your honest and thought provoking blog posts Abby. Congratulations on the growth of your business.
Thanks so much for this Abby. I’ve read all your income report posts with great interest and this one was exactly what I needed today. I’ve been feeling a tad overwhelmed with everything going on in my own business right now and had hit a bit of a wall but this is a wonderful inspiration; to show that it can be done; to prove that perseverance pays off (literally!); and just as an example of someone working hard and reaping the rewards. I feel I’ll go back to my own work with a renewed vigour after reading this 🙂
Stephanie x
thanks for sharing this Abby! I found your blog about a month ago and have been reading with great interest ever since. I really appreciate that you share so openly and find it incredibly exciting for you that you are growing your business so well! congratulations! Can’t wait to see how you invest those 10,000 and all the best.
Karin x
Thank you so much for sharing. My husband and I are looking to change things up and as you say “get serious” about this business. This post was so helpful and has given me a lot of food for thought.
Thank you for being so open and honest, and showing creative people how to use analysis to help our creative businesses! What a gift to learn about these elements, because you are so willing to share!
I so look forward to these posts! Thanks so much for your willingness to share and also analyze your business for us. It’s so inspiring to see your growth–Congrats!!!
Amazing depth and detail to your report. Thanks so much for sharing it. Congratulations also for creating such an amazing business that helps so many people by its nature!
One question: can Woocommerce be used with a free WordPress blog or does it have to be upgraded to something you pay for? I’m just looking into WordPress to move away from Blogger.
Keep up the great work! You’re an inspiration!
Hi Allison,
I use WooCommerce with a free WordPress.org site (I don’t think you can sell things from a WordPress.com site). I pay for hosting, but WordPress itself is free, open source software.
Woohoo … Well done Abby, I remember reading the first report you did and thinking how it would be ingesting to see how your business grows throughout the year, and it was. And this year you got a wage from it, even better. So happy and excited for you, it gives those of us who are still in the early stages of this journey hope … it is possible to turn a hobby into a paying job and even a career. Thank you for being brave and sharing this side of your business. 🙂
This is a fantastic post, Abby. I’m so impressed with the way you have grown your business. Congratulations on a great year!
Fanstic post, Abby, well, fantastic series actually. I find it really inspiring and so useful – gives me lots of things to keep in mind/check on for myself.
I think it’s amazing that you have paid yourself a salary – such an important part of making sure you have a sustainable business. I’m also looking forward to seeing what you do with the business’ $10k reinvestment … that must be so exciting for you, knowing that you can outsource the things you don’t enjoy or aren’t that good at so that you can spend the majority of time doing things you love to do and that you’re a rock star at. Making this job your dream career. Gotta be happy with that!
(I’m with you on the running – great way to start the day on a positive foot and a good excuse to eat chocolate later on in the afternoon.)
I think it’s important for women to be fairly compensated for their work. Your posts regarding the business of crafting are empowering women. Thanks Abby.
I really appreciate your sharing of these reports. They have really inspired me to start keeping a track of this stuff myself, even though I’m not yet at the stage of making my work “a proper business”. I truly feel like 2015 is the year to set the serious foundation of when I AM at that stage of making things official, and that includes book keeping so I can have an honest look at where I am financially in terms of what is the best use of my time and effort.
One question – are those graph categories the same as what you have in your book keeping, ie. categories in your spreadsheet?
They are similar. I track the date, the category of the item, the name of the item, where it sold, any notes, and shipping charges. I have a separate sheet where I track expenses, and then I had someone from Freelance build me a pivot table in Excel to connect the sheets and add everything up automatically. This year I’m switching to Outright for bookkeeping because it just has become more than I can do in a few hours each week.
Abby, it is awesome that you put your financial information out there for all of us to read. You have a ton to be proud of, most off all that so many people (or maybe it’s just me 🙂 are inspired/motivated by your statistics. Thanks!
Your quarterly reports are so transparent and helpful to us dreamers and doers, Abby. Thank you for sharing your business story as well as your creative works. Here’s to a wonderful 2015!
Thank you so much for being consistent in sharing this. I do not have a craft business yet, but find your blog and podcast one I go to primarily for inspiration and education. Your hard work is paying off, and it’s encouraging to see that if you put focused effort into something, you will see results – congratulations!
Thank you SO much for sharing this. I’ve read similar breakdowns on a food blog and a writing blog that I read, but never a crafting one before. yours is the kind of business that I (and my Mom) are trying to build. I’m so happy I found your blog a few weeks ago!!
Hi Abby, thanks for sharing this again! It’s super helpful to see how you gain your insights, which questions you ask yourself . You’ve accomplished so much in a relatively short time, and I can’t believe you did that with a 25 hour work week! Very inspiring, keep it up!
Thank you for sharing with us and congratulations on such a successful last year. It really is inspiring to me, but very well deserved. It’s amazing to see how it all has progressed and the breakdown of everything.
With the new VAT EU regulations I have become somewhat demoralised. I know there are alternatives for selling patterns which I have not even begun yet. However, it concerns me that as early as next year all physical products will be affected too. I find that all very disconcerting. I’m seeing some UK sellers (and other EU sellers who don’t even have the option of sending pdfs manually it would seem) being kicked back right now and it is sad. I would have to up my game considerably but just don’t know if it is doable to get where I need to be without going under first. I also saw on etsy a plea from a USA seller asking me not to buy her patterns if I was from the EU, as she couldn’t cope with the tax situation. The world market place just got smaller. The UK is so tiny and there is so much competition that I think a seller here needs to sell world wide
Abby congratulations at your determination to make it become a business. I am so enjoying being with you on this journey. You have been a real inspiration and it is something I need to remind myself that it is a steady but committed path that we need to be on and every little step is worth it in the big picture. Good Luck for your year ahead.
Abby, this is so interesting *and* helpful! Thank you so much for sharing! This year is my year for taking my business seriously, and taking it to the next level, so I really appreciate all of the information you share.
Thank you for sharing this information. It’s been such an eye-opener to see that it’s truly worth it to start my business and that progress is success if I want to see it htat way. And I do. 🙂
I’ve just recently starting reading your blog. I so appreciate your honesty in every aspect of what you do. You are an inspiration! Many times I have though of trying to start my own home sewing business. You bring so many items to the table that I had not even considered. Thank you! I will continue to read and learn from you!
I came for the creative blog, stayed for the business aspects. From the looks of the comments, you could make some money consulting for start ups, or maybe an e book!
Thanks, Sue. I do have an ebook about how to start an online sewing pattern business. I’m not sure consulting is in my future, but teaching is fun!
Congratulations on your successful year. I am sure that your business will benefit from your focus and energy, as I am from reading your blog. Sometimes I am overwhelmed with the business side of my craft but I remember the old saying “how do you eat an elephant?” …. One bite at a time! You have shown that taking bites and building on strengths, analysing and adjusting to changing trends and focusing on what is working for your business is paying off. I too shall be watching what happens this year.
Thanks for sharing this information. I love that you are transparent about your work, and in turn this encourages others to “Get Serious”. Love it. Keep it up. Truly inspirational.
deb
thank you so much for all you do. your newsletters, your blog, your podcast. the posts like these. i love the open, honest information and i am so happy for you that your hard work is paying off. literally.
Very inspiring and informative – thank you so much for your openess!
What an inspiration! I love success stories! . . . Dedication. . . Motivation! It’s awesome that you reveal all of this info. And by the way, it’s very obvious what your priorities are. Really enjoyed this article. Wishing you double all of this in 2015,
Hi Abby,
I really appreciate your post! You are my inspiration! I really appreciate how you just put it all out there. Congratulations on your success!
Abby, you continue to be such an inspiration! The fact that you share so much about what it’s REALLY like having a crafty business means so much to me and so many other people. Thank you again for everything that you share and all the work you put in. And congratulations! You deserve the amazing growth you’ve had in these couple of years! 🙂 Lisa
Hi Abby,
Congratulations on growing your business. I’m glad to see you mentioned taxes. As an accountant, I see many new businesses start up and then quickly close under the burden of taxes. Depending upon where you live, taxes can be anywhere from 30-50 % of your net income and Social Security taxes must ALWAYS be paid. There’s now way out.
I’m hoping to do a post about Social Security taxes soon. Thanks, Kathy.
As usual, I am blown away by what you do! This is super helpful, too. Good job! I can’t believe you’re not selling Fimo beads though, like we used to make! Just kidding, course. Nice work. XO
Those were the days, Susan!
I thank the day I discovered your blog! I am an art teacher, an artist and a mom. All very important jobs for me. I worked at home as a freelance artist for 15 years while my children were young and I was the worst business woman ever! I wish I had your organizational skills and inspirational guidance back then! I finally started teaching to earn a steady income. My kids are all college graduates now and I am so ready to stop getting up early, catching little one’s colds and working for someone else. I happily began blogging, highlighting all of my creative whims and talents and I’d love to pursue it full time. I thank you for making it real and not just a dream that could someday happen.
That’s so nice of you to say, Barbara. Thank you.
Hi Abby,
I just wanted to say thank you for being open and informative about the hard work that goes into your business. It was not until I came across your blog that I realised how much work goes in behind the scenes to get these products, whether they be finished items or patterns, ready to be sold. It never occurred to me the amount of paperwork and financial control required would be so much.
You do all of this while caring for your family. You truly are an inspiration.
I wish you the best of luck for 2015.
Thanks so much, Louise. I’ve always loved craft books and craft products and I’ve always collected both, but like you until I got into designing and selling them myself I truly had no idea what went on behind the scenes to make those things available to me as a consumer. I’ve come to believe that when you look closely at pretty much anything you’ll discover a hidden world you walked right past all along!
abby, this is fantastic! congratulations – not only on the numbers, but on the growth and development of your business, and also on sharing – i so appreciate your willingness to talk plainly about things that are so often veiled and mysterious. i’m wishing you continued growth and success in 2015 and beyond!
Well done Abby! A fantastic report and it’s so great to see your business is growing and doing so well! So inspiring to a designer like me – it shows that with lots of hard work and dedication you can turn something you love into a profitable business. Your reports and honesty about the behind the scenes work you do for your business have definitely inspired me and helped me in planning my own pathways and ways forward for my own business. Thanks for sharing and congratulation on making yourself such a wonderful, creative and successful business!
Abby,
It truly is good of you to share this information with all of us. Your posts are always so eye opening. You are a breath of fresh air!
Barbara Cain
Great information. Thanks for sharing your financial reports and what you have done to increase your profits. I have been spending a half an hour a day promoting on social media and I doubled my business in a year.
That’s awesome, Pam. It really doesn’t have to take longer than half an hour each day and it can really be fun! Building a social media presence really does pay off in the long run.
Good for you, Abby! I subscribe to your newsletter & have found all of your quarterly reports fascinating, and I don’t even HAVE my own business! It’s just so satisfying (& inspiring) to see someone take an idea/dream to fruition through hard work, determination, and skill. As a craftsperson myself, I know many people don’t realize the amount of work involved — far, far beyond the creation your actual product. I always laugh when I hear this: “You should sell your work on Etsy — you’d be rich!” If they only knew. Best of luck in what I’m sure will be a continually successful career. There is nothing better than making your living doing something you love.
Suzanne
Thank you, Suzanne.
G’day Abby,
You’re an absolute gem! Your passion is contagious. Thank you for creating such a quality brand, I love every aspect of your business and look forward to what’s to come.
Abby: I know that you get a lot of comments thanking you for your bravery. Let me just add mine to the list. These reports are incredibly helpful and you always give me new ways to think about the business of blogging and creating. Thank you for your transparency.
Thank you so much for sharing these details of your business with us. I found the graphs that breakdown your money flow particularly useful in understanding what you are doing to grow your business. It is very impressive that you can accomplish so much in 25 hours a week. I would love to see a similar series on how you are investing your time to run your business and achieve your goals.
You’re not the first person to suggest this, Victoria, but I’m afraid it wouldn’t be very interesting. I don’t have a formula that dictates how I use my time. I have a calendar and a yellow legal pad for my to-do list and as soon as I come back from my run and shower I sit down and start working on whatever needs to be done. That’s it really! It’s just a matter of not procrastinating, making a good list, and then doing one task after another until they’re done.
Thank you for replying to my earlier comment. I feel some of my intention may have been lost. I’m not looking for a formula, but a point of comparison. Your business is different than mine, so a formula really would not work. I know that you have a blog and a news letter, so you must spend time writing. You also have a podcast, and devote time to that. But how much time? How dose that compare to the time you spend managing your online shop? Or making items for sale. How else do you invest your time?
I’m not much of a wordsmith, and it takes me a while to string a sentence together. So I really don’t feel I could produce the volume of content you do, unless I was really committed. And I wonder if I tried to, how much of my time it would take from running the rest of my business? That is where the comparison comes in.
I also think a series on how you invest your time would be an interesting read for those outside the profesional craft community. What it takes to make a creative business successful? It’s a lot more than most people think.
I see what you’re saying. I don’t track my time the same way that I track my finances so reporting on this would be hard. Each day is different. I spend several hours on Tuesdays writing my newsletter, several hours the night before a podcast recording doing research on my guest and writing the intro. and questions for the show. For the investigative reporting posts here on the blog it can often take me weeks to research and and write the post, while the sewing-related posts are much quicker unless they’re tutorials which take at least a full day’s work to create. I spend at the minimum an hour every day responding to emails, tweets, Facebook and Instagram comments, and blog comments (like this one!), although on Wednesdays when my newsletter goes out it’s more like three hours just responding to people. I ship packages every day and that takes about half an hour. It’s just really variable, but it definitely adds up to many, many hours worth of work.
I’ll think about trying to create a full post about this topic. Thank you, Victoria.
This is beyond insightful! Thank you so much Abby for sharing this with us.
It’s so encouraging to see how your business has grown financially these past three years.
Hope you can get some ‘you’ time away from the business and the kids this year too though.
[ PS: I came across your post as it was featured on Create and Thrive ‘s weekly newsletter by Jess Van Den 🙂 ]
Wow, thank you for sharing and being so honest and open about the finances and details of your business. I don’t think it’s often talked about, especially in the crafty world. It sort of creates a false impression that certain people have it all figured out or make money easily… or there’s this mystery of how folks truly make their living with their online crafty businesses. I think we are often left wondering what kind of magic is happening behind the scenes!
I started listening to your podcast and reading your blog recently and it’s all got me thinking more about self-worth and what it means to really get serious. I’m definitely inspired and realize the importance of tracking and analyzing financial data.
I think you mentioned before that sometimes it can be a bit sad when totaling up finances, because for all the work, the payoff can seem so minuscule compared to a past full-time job salary. I certainly feel that pinch every year when I do my taxes. Of course, for SAHMs we often forget to factor in the reality that we are also running our households and taking care of our families at the same time!
Anyway, just wanted to say congrats on your business and looking forward to seeing more from you. Love that you wrote “I’m ready to make this into a career rather than just a job.” Yay!