July 2024 - Peachy Party Business Update

Here are the numbers:

Sales: $9,474.04

Net Income: $237.03

Rent hit twice because I scheduled for it to hit at the end of the month. The landlord was complaining that it was hitting a day or two after the first. So if we adjust for that, we actually made $1,200 profit this month. That's a 15% profit margin. However, I don’t want to get into the habit of adjusting things just for the sake of this outlet. Otherwise, I’ll sit with the information forever!

July is a notoriously slow month in the Atlanta Market. Now that I am in my third season, I’ve come to expect it. But it still has a major effect on my mental state. I go from fielding a bunch of requests and delivering and setting up tents almost daily, all the way down to crickets. The first year I didn’t know what to make of it. Second year I knew it was coming and still fell into a funk. This year, I planned a vacation and had the kids to worry about! That comes with its own set of challenges.

As a result of taking that vacation, I missed out on some calls from a small movie production company that we previously did work for. That was a bummer. It wasn’t a big job. However, these are the type of long term clients that we should be focusing on if we want to build, scale and sell this business.

We had a wedding in July that made up more than half the revenue. This is important for a few reasons:

• We established a relationship with a venue and have been called twice since then to provide some additional quotes.

• It's our first Indian wedding and the planner appears to be pretty (based on her social media presentation) and she gave us a 10/10 (via text), although I couldn’t pin her down for a Google review.

The job itself was barely profitable. Well, that not entirely true. It required me to purchase some small inventory items that I did not have on hand (like additional fans) and I had to sub-rent some block N roll to anchor the tents.

I have a bad habit of thinking about things on a cash basis. For example, if I had to spend $500 for fans in order to full-fill this rental, in my head and in my accounting system, the $500 will be deducted from this month’s profitability. Although the expense happened this month, what really should happen is that portion of that expense be allocated to each rental based on a depreciating schedule and the useful life of the asset. Otherwise, the next few jobs I perform using these fans will look artificially profitable. Although I understand this in theory, I haven’t been able to put it into practice.

In the end, I understand it all washes out. However, if we are building a business to be sold, these numbers need to be normalized. I’ll be putting my accounting hat back on.

In July I started taking a salary of $1,000 per month. Prior to this, I was previously employing the profit first method where I would take a percentage off the top. While that was great to start building the habit of paying myself as a founder, it's not something that is going to work for the future of the company. I stopped taking money from the business when I went full time in May. Now, I’ve resumed taking a small salary and having that line item show up as an expense to the business.

If you’re reading this, I’d be happy to take any feedback. Good, bad and ugly. I'm building this in public with the hope of getting better and sharper. Let it rip!