How'd We Do? 2009 Annual Investor Call

I started doing my taxes this week, and it inspired me to do a make-believe version of an annual investor call on twitter, just like the Big Companies. I think I was reminded of my days at Amazon.com because of the fact that my business grew a whole bunch this year, both in revenue and expenses. I remember listening to those investor calls, and how the execs would explain that yes, the company made a zillion times more money this year, but no, still not profitable yet. Now I know how they felt.

I was just having fun, but the results were pretty interesting, so I thought I would make some pie charts and share some thoughts on the data. I'm not going to share the real dollar amounts with you, because I wasn't raised that way.

First off, total revenue for my Sole Proprietorship was up 250% this year (not 400% as previously reported). That's a pretty big jump and I initially thought that the grant I received from the City of Seattle would account for most, if not all, of that spike. If that were the case, then the jump in money coming in would be a welcome increase, but an anomalous one.

However, when I broke out the numbers, it became apparent that something else was happening. Here's a breakdown of revenue for 2009.

(click through for more)

Funding from public agencies (like the City) accounted for a large slice of the pie, but not as large as my private lessons, and not that much more than sales of CDs and CD Club memberships. If I hadn't gotten any funding from the City at all, my business would have grown by a large amount anyways. Revenue from lessons alone actually doubled in 2009, which is a pretty big deal. CD and CD Club sales were any entirely new revenue stream in 2009 and accounted for a quarter of income.

So, all areas of my business grew in 2009, not just the public funding portion. Not bad for a new business launched during (or right before? Who can keep track?) a recession.

I'm sorry, investors. What was that last question? Expenses? Oh, fine.

Actually, there is some really good news here, as well, and I didn't think there would be. Expenses for 2009 were roughly the same in total dollars as they were in 2008. That's huge! If revenue jumped 4 times, but expenses stayed at the same level, that points the way to some sort of sustainability model for AB, SP. Neither year was particularly frugal, either. So I can do big projects, grow revenue and maybe (maybe) figure out a way to crack a profit or break even. This comes with a few caveats, which we will get to in a moment.

First, here's the breakdown.

Supplies and labor continue to be my biggest expenses. One disappointment is that my labor costs went down by about half in 2009. I know, I know - I should think like a recession-time CEO and applaud myself for this cost-saving measure. But that just means that I wasn't out there, bringing my music to people as much in 2009 as in 2008. Also, I'm a big liberal softie, and feel like I should putting money towards labor not away from it. I had my whole "I just want to work alone, with just the composer and his computer" phase, and it was lame.

So that brings us to the bad news, investors. I just started a new 12-piece band and invested a ton of time, effort and money into getting it off the ground. I'm trying to book gigs for this band, and hopefully start a recording project for the music. All of which means: much higher labor costs in 2010. Probably higher than 2008, even. Keeping costs at 2008 or 2009 levels is going to be hard.

The good news is that I am exploring some new and exciting revenue options as well. I am confident that this is still a great time to invest in AB, SP and affiliated projects.

So that's the financial year in review. Business is growing, but we're still not quite profitable yet!