2010 Annual Investor Call and a Preview of 2011
Happy Belated New Year!
It’s that time of year again, when I peel back the curtain and allow you, my investors, to see a (highly sanitized) view of the inner workings of my business. Here are last year’s numbers for comparison. This was another big year for the old sole proprietorship. Income overall was up 65% over 2009, another big leap. This was due in part to the successful funding drive for the Zubatto Syndicate recording project, which will be complete in early 2011. Both the Kickstarter campaign and the recording grant from American Music Center boosted the bottom line a great deal. The increase was also due to a steady expansion of my private teaching practice, which was featured in Seattle Magazine in September.
Here’s the pie-chart.
Kickstarter numbers are lumped in with sales, which represented about a quarter of all income this year. Funding and sales for big projects amounted to just under half of all income, compared with around 55% last year. So even though income was up all around, the percentage of income from these big mega-projects and sales was slightly lower. Which means the teaching side of the business – which is slightly more stable and sustainable – grew quite nicely this year. So that’s good news.
Will I be able to maintain those levels in 2011, given that half of the revenue came from driving these big projects? That’s a great question that is really several questions rolled into one! First: Will the big project of 2010 (the Zubatto record) continue to pay off in 2011? Secondly: Will there be more big projects in 2011? Lastly: What about the expenses tied to these big projects?
Let’s start with expenses. The best news from last year is that, despite my own forecast, expenses were level from 2010 to 2011. Even though I made a record with a 12-piece band, I was able to keep the over-all expenses within the scope of what was actually raised, especially for the recording. So for the first time, the big project actually paid for itself in 2010. The record isn’t finished or released yet, but it also hasn’t made a dime on sales yet outside of Kickstarter pre-orders, so I’m hopeful that it will recoup the funds that will be required to get it out this year.
Let’s go to the pie chart.
Looking at the breakdown of expenses, obviously Labor jumped in 2011. That means I did a better job getting Zubatto out there this year than I did with other musical endeavors last year. I would have liked to have played a few more shows, but the record will help with that a great deal in the coming year(s). Rental is the other big category, reflecting the fact that I chose to invest in making the best recording possible, by booking us in a top-flight recording studio and mixing facility. Both the labor for the record and the studio rental were paid for by funds raised through Kickstarter and AMC. So the biggest expenses were completely in line with the biggest sources of revenue. Cool!
Also, since the revenue grew but the expenses were the same as last year, technically the business made more money than it lost in 2010. That’s a first!
So where are we with the Zubatto recording and what does it mean for the bottom line in 2011? The record is scheduled for mastering later this month, the last step before production. There is enough money to get that far, and I am working on the last (but not inconsequential) piece of funding now. It may become necessary to release the record digitally first – as a way to generate money to get it into production and start pre-orders – but my goal is still a simultaneous release of the physical media with digital. Either way, I want people to be able to listen to the whole thing by late February.
After the CD is finished, the two big expenses for the Zubatto division will be promotion and performance. I am actively working on plans for both in the hopes that these can be either revenue neutral or maybe even revenue generating activities. This will be hard, as I have big plans in both regards. I want this record to be BIG, and I want to get the band out there as much as possible. My aim is for both goals to be achieved sustainably. I’m also looking at writing another record’s worth of material for Zubatto, most likely towards the end of the year.
What else is in store for 2011? More Big Projects? Yes and no. The two themes for AB, Sole Proprietorship in 2011 are Diversify and Assistance. The ramifications of the first are that I will be trying to find ways to support multiple and disparate ideas and projects throughout the year, of all shapes and sizes, in order to get away from having one monolithic thing on my plate for an entire year. I’m not playing enough music on a daily, weekly or monthly basis, and I’m actively looking for ways to make that easier and less expensive to compliment the very complicated and costly Zubatto. I also really want to spend more time in the recording studio, also without the overhead of 12 musicians. So all of those things are on the table going into 2011.
The second theme is about finding ways to outsource some of the stuff I don’t like doing so much. Like promotion or booking or scheduling, and to work even harder to find ways to assist my work financially.
Finally, there is a Big Project for 2011. For now, it is a secret, but I look forward to sharing the details as they emerge. For now, I’ll just say that I am very excited about this new idea and project, and will begin work on it in earnest next week. It is going to be a huge leap for me and I hope you’ll hang around to make it with me.
Thanks again for your support in making 2010 the best year yet for AB, Sole Proprietorship. 2011 is going to be the year that everything explodes. In a good way. 2012 is the year that things explode in the wrong way.