In the red, again.

Posted by Stuart Lennon on

Results

In February 2017, I became the proud proprietor of Pocket Notebooks (as was), so we just passed the two year anniversary last month.
Like every business, we have to prepare annual accounts and complete tax returns. I’m working on that now. The good news is, the tax man is getting nothing again this year. The bad news is that this is because we are still not making money. That's disappointing.

Lessons

That said, we made a gross profit this year, versus a loss last. Our overheads are down, so our net loss is one quarter of what it was. The trend is in the right direction.
We will continue to be imaginative and disciplined in our cost management. With me not coming into the office anymore, we hope to downsize, making a saving there. We may look at managing despatch days, to reduce overhead.
Prices. Inevitably, you will see some rising. Manufacturers constantly review their prices to us, and as £ based business, we are vulnerable to swings in the exchange rates on US and European goods.

Challenges

1. Supply lines. Some customers have been frustrated by long wait times on specific Limited Editions. Us too. Some manufacturers have established distribution relationships which have worked for years, that they are loathe to change. This is frustrating for us in two ways. Firstly, we cannot control the shipping policies and therefore timings, and secondly this pushes the prices up. Trust me when I say that both the distributors and the manufacturers understand exactly how I feel - (I’m off several Christmas card lists). However, truth be known, if this model works for them, who am I to shout about it?

2. Competition. Consumers want the best value they can get. Quite right. If we equate value to price, then the answer is almost invariably Amazon. Independent retailers, on-, or off-line, try to compete by adding value through service, packaging and, dare I say it? Personality. 2018 saw Cult Pens snapped up by WH Smith, and Bureau Direct go out of business. It's tough out here. One or two manufacturers have sold us stock, and then started selling direct on Amazon at prices lower than we can match. That’s their privilege, but it does feel like the legs are being cut from under us.

3. Brexit. Truthfully, there is no reason that this should impact us as much as some would have you believe. However, there are politicians involved, so I daresay they will manage to make everything worse than necessary.

Why carry on?

Nero’s Notes is a labour of love. I carry on funding it because sourcing and supplying cool analogue things that reduce (even slightly) the amount of time we spend in our digital capsules is fun and worthwhile. Of course, annual losses are not sustainable forever, but the target is to break even this year.

How you can help.

1. Treat yourself to more lovely stationery. A win-win surely?
2. Treat those close to you. Share the love.
3. Share this and other blog posts. We are working hard to publish twice a week and bring the community to the forefront of the site. (I’ll try not to break anything on it)
4. We are being intentional about social media. Put another way, we’re not there all the time. Comment here on the blog. Send us email. We love to talk, but not necessarily on social media.
5. Talking of talk, Nero’s funds the podcast 1857. Find it where you get your podcasts or at www.1857.co.uk. A new show every week.
6. If you like your content in writing, swing by stuartlennon.com where I write twice a week about moving to Cyprus, working remotely and anything else that takes my fancy. Become a member for a £1 a month and get access to all that I write, including long form work, or books as they used to be called.

Thank you for your support. You are what makes Nero’s special, and I'm confident that together we will survive and thrive.

Remember, forget the app, there's a pocket notebook for that...


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4 comments

  • Thank you Paul, Scrib and Jonathan. We will keep on keeping on.

    Stuart Lennon on
  • Keep at it, marathon not a sprint! Great service, attention to detail and of course nice products. We just need to ban electronic media!

    Jonathan P on
  • Stuart and Claire and all at Nero’s Notes,

    I really hope you guys keep going. I’d buy more note books, but I’m barely keeping pace with the ones I have. I agree that your stationary makes great little gifts, and will continue to buy notebooks from you for that purpose. I also love the extra bit of attention customers get with the packaging from you guys, so keep that up. Here’s to break ng even!

    Paul Mullins on
  • Well done that man – and for all that they appear to be omnivores now, let’s remember that Amazon made a loss for many years more than this before the business was meaningfully profitable!

    Scribble on

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