BB Financial Report

Bountiful Baby Financial Reports

We use Shopify for our website platform (and that is the platform I recommend for you). Shopify payments requires a bank account to move the money to. So does PayPal. All income and all expenses always flow through that checking account. In this way, the business checking account becomes the central nexus of the accounting system, because it captures all of the business income, and all of the business expenses. I suggest you do the same with your business. Make your business checking account be the central nexus of your accounting.

We use Quickbooks for our accounting software. Again, I suggest you use *something*. It doesn’t have to be Quickbooks, but use *something*. I have said this before, and I am reiterating it here.

Today (12/27/19) in Quickbooks I ran an Expense Report, and in the picture provided I am sharing the “Year To Date” results. This should give you some guidance on where your numbers might need to be.

Our COGS (Cost of Goods Sold) is the bare vendor cost to acquire product for resale. Some companies include freight and a few other expenses in their COGS calculation. We do not. We keep it all separate.

Professional Fees are mainly legal fees, accounting fees, and the fees we pay the Korean Martial Arts instructors. Our legal fees for 2019 are about $31,000 to date. I wish it were less, but sometimes it is unavoidable.

“Guaranteed Payments to Partners” is money that Denise and I pay ourselves. It is our monthly wages.

“Subscriptions & Memberships” are Google Gsuite, GoDaddy, Endicia, Shopify, Mailchimp, Backblaze, Adobe Stock, Adobe Creative Suite, Rocket Lawyer, uAttend, Audible, Discourse Hosting, Survey Monkey, Shipstation, Intuit Payroll, Ring Central, Agorapulse. Wow, that’s a long list. I didn’t even realize it was this long until I looked (for this post). And that brings in another point: folks, expenses like this will tend to grow and creep up on you. You need to constantly audit them and see which ones are still needed. I can see a couple in this list that I don’t think we need any longer. I will check with my employees to make sure, though.

The “Other” category was automatically generated by Quickbooks. It is all of the other incidental expenses, each of which were judged (by Quickbooks) as too small to individually report on the graph, but Quickbooks breaks it down as follows:

1.3% Utilities
1.1% Contracted Services/Labor (to produce our USA-made bodies)
0.75% Advertising and Promotion
0.55% Property Tax
0.19% Worker’s Compensation
0.19% Bank Charges (almost all of this is wire fees)
0.19% Insurance
0.17% Gas & Oil (for company vehicles)
0.12% Meals (for visiting clients, customers, etc.)
0.11% Permits & Licenses
0.05% Interest Expense
0.04% Gift Expense (Xmas, etc.)
0.03% Travel Expense

No money can leave the company without it being booked somewhere. With double-entry accounting, the Quickbooks accounting software won’t even allow it otherwise, and this expense data shows where those bookings have occurred for all money that has left our company year-to-date for 2019.

From this it should be apparent that we sink everything we can back into the company. It mainly gets poured back into COGS. Our Kinby line is a prime example of doing that.

Aside from COGS, the USPS Postage to ship out orders is our single largest expense. We are one of USPS’s largest customers in the Salt Lake area.

Payroll is our third largest expense.

Those three alone (COGS, Postage, and Payroll) take up more than 77% of the revenue, with everything else together taking up the remainder.

As much money as we can gets pumped back into the business, for growth. So if anybody is wondering where our money goes, now you know. All available funds go back into the company.
December 31, 2019
I just ran across some old “Gross Revenue” data of Bountiful Baby, for 2002 through 2005, that I thought I would share.
In 2002, gross revenue for BB was $15,891.86. This was the amount that Denise earned from creating reborns and selling them on eBay. I was still doing computer consulting in 2002, and my computer consulting income was significantly higher than that for 2002, so our family mainly lived off of my consulting income.

In 2003, gross revenue for BB was $42,632.40, which was split about half and half between selling supplies, and Denise reselling her reborns. After subtracting expenses, it still was not sufficient to support our large family, so I was still doing computer consulting.

In 2004, gross revenue soared to $276,899.00. Subtracting “Cost of Goods Sold”, and subtracting other expenses, yielded about 20% net profit, or about $55,000 as the “residual income”. Much of that residual income was pumped back into the business for growth, which left very little for the family to live on. But we survived. So even in 2004 I was still doing a little bit of computer consulting to supplement our family income, although that era of my career was rapidly coming to a close (with many wonderful thanks to my wonderful wife Denise).

In 2005, gross revenue rose to $365,026.56, which left (after expenses) about $73,000 residual income for the family to live on, plus finance additional growth. I was finally able to completely stop doing computer consulting, and our family was able to live off of Bountiful Baby income. I like to tell Denise, “this is all your fault”, as I smile broadly and give her a big thankful hug.

It was sometime around early 2005 that we got a knock on the door. It was someone from Davis County Licensing. They showed us a Davis County regulation that limited home businesses to 500 square feet, and we were too big. So, either scale it down or move it out, and we had 30 days to comply. So we moved our business to it’s first commercial location in Salt Lake City, close to UPS, Fedex, and USPS shipping centers. We moved again to our present location in 2011. And as they say, the rest is history. 🙂

A few years ago a successful local businessman tried to give me kudos for creating a successful business, and said I was “very smart”. I replied that much of the success of the business was my wife’s doing, whereupon he said, “well, you were smart enough to listen to her”.

Yes, I was smart enough to listen to her. And for that I will be eternally grateful.