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If you have been attentive on Boat Buzz over the last several months, you know that we have been going through some tough times. The positive discussion turned into negative banter by just a few of our members. I cannot express how this has felt to be on the receiving end of these comments. I do think that those who have been most negative have been operating on assumptions and pure speculation. I do consider the comments made by some as 100% slanderous and/or libelous.
This new section in Boat Buzz is only visible to you, our members. The public cannot see this section, let alone what is posted within. I will be posting some financial documentation in the spirit of disclosure.
Our financial slide started with Brass Bells being late. And since our quarterly renewal system is tied to Brass Bell delivery, our income hit the skids as well. There has been a bit of talk about this approach with some questioning why we do it this way. Most importantly this method makes us accountable. If we are not delivering Brass Bells, our solution cannot be to send out a renewal notice to better our cash flow. While it is somewhat painful to handle our cash flow in this way, it does make us concentrate on the real solution, which is delivering Brass Bells in a timely manner.
Anyone has been in business will understand the difference between cash flow (or lack there of) and not having any money. Our current situation is a cash flow situation, plain and simple. Without Brass Bells mailed, it does not flow in our favor. As Brass Bells are mailed the cash flows once again. This will be the absolute focus of my efforts over the next 6 months.
Now, on to the disclosure portion of this message. I will start this out with a few general comments:
1. I recently moved my office and club headquarters to my home. The new space will work out just fine and I have space to operate this club without missing a beat. But, given this recent move, I have the typical post-move chaos. Boxes everywhere and, at times things are a bit hard to find.
2. It is the holiday season. I am very busy at a new job with many pressing deadline and travel commitments between now and the end of the year. I also have a wife, six kids, and it is the holidays. I will be as responsive as I can, but I need to take care of business on several fronts.
I will show a few financial exhibits here to help get this club more understood by all of you. First, a YTD P&L.
This P&L best illustrates our current situation. While some have been inclined to use the "3,500 members x $35.00" income approach, it is just not applicable at this moment. That method is predicated on us having a full year of renewals in hand. Again, we do not send renewals until a Brass Bell for a specific quarter mails. We simply do not have a year's worth of income reported at this time.
I think we have to put ourselves in the position of any member who might receive a renewal mailing prior to receiving a Brass Bell. The first question I would be fielding, by phone, email, or private message, would be, "Where's my Brass Bell?"
On this P&L you will see income from Sponsorships, Display ads, and Trading Dock ads. Donations are tracked in a separate income category. The reason for this is that these donations have been matching grant donations in the case of two grants that we received from the Collectors Foundation. These donations are earmarked specifically for archive development.
See the donations detail here. Donations are entered as individual entries, and DOUBLE-ENTERED in our SQL-based payments database.
Also, as income, you will see Membership Dues. Please see the following Income details:
First a Total Income Transactions roster. Please bear with me on this. While I can export these details directly our of Quickbooks as PDFs, it is difficult for me to edit them...for example, to blur out the names of those who are listed. For privacy, I have blurred out the names. This particular report was a 27 page PDF. I did not want to blur all of the names of 27 pages of data, then saving 27 jpgs. If any of you feel the need to see all 27 pages of transactions, I will do this.
It should also be noted that, as checks come into headquarters, they are entered into Quickbooks as individual line item entries. In other words, we do not take 47 checks received in one day, and enter them into Quickbooks noted as "47 membership renewals." Each of these checks is a single line item entry, properly noted with the person's name, and sometimes cross-referenced to a wife's name or Trust custodian's name.
As well, each of these checks are DOUBLE-ENTERED into our SQL-based membership management system. When we enter these checks into our membership system we get a check and balance system that minimizes errors, and makes errors easy to chase down when they do occur. As well, this system is where we actually advance memberships forward one year, or more. This system is EXTREMELY important as it is where we manage all Brass Bell mailing lists, email blasts, etc.
Below you will find a couple of screen shots of this system.
Moving back to the P&L, I thought it would be helpful to see a few details of the major categories.
First, Income Transactions (above).
Next Cost of Goods sold (COGS) below. Generally speaking these are items that are directly related to making a product....your benefits, ie: our web presence, Brass Bells and so on.
Design & Programming-Web. This expense is for our next version of Boat Buzz which is darn close to being live when cash flow improves. The majority of this cost was for an outside php developer. In fact, so outside that this developer is from China. He was hired through a technology hiring site called oDesk.com. We can hire contractors for far less using this method. In this particular case, this developer logged 171.33 hours on the project. oDesks system tracks mouse movements, idle time, and screen captures the developers progress every 30 seconds. It all gets saved to a job diary. It is the ultimate in accountability.
The new Boat Buzz will go live when cash flow permits us to finish out the project. You can see work thus far at www.chris-craft.org/dev/discussion
Next, Design & Production-Brass Bell. Thus far the only expense logged is for gas reimbursement for a Lake Tahoe photo shoot.
Next, is Renewal & Membership mailings. From 2006 through 2010, I printed these inside my design studio on our high speed color copier. I charged the club only consumables on this. No labor. Typically there are about 1,000+ units on a renewal mailing. With 1000 outgoing #10 window envelopes, 1000 #9 return envelopes printed with return address, and 1000 letters, this is 3000 total pieces printed. In late 2010 I made the decision to farm the printing of these mailings out. They were getting larger with each quarter. By the time the pieces were printed, stuffed, mailed, stamped, and delivered to the post office, a renewal mailing was taking three days. The only solution was to farm this out and deal with it through automation. again, we have had only two renewal mailings this year. We will send another within a week. This number will grow through the end of the year.
Next, Printing and Reproduction. This is Brass Bell printing for the most part. So far, for 2011, there have been two issues printed. There will soon be a third. Our Chris-Craft Antique Boat Club year ends after the Fall issue. I do not know whether we will get Fall included in 2011. I am going to try my best to get it done. This detail is a little more complicated to look at. If any of you need it, I am happy to provide it. But there is carry over from year to year, and it is a it harder to understand at a glance.
Now for the expense side. In addition to the COGS sold (above), we have ongoing expenses that are the cost of doing business.
Fuel and mileage. This is for two trips in my Suburban, traveling to a printer 75 miles away, to press check and pick up Brass Bell overs.
Boat Shows > Sponsorships & Donations. Below you will find a detail. There are two expenses for the Antique & Classic Boat Society, Inc. International show that were paid last week. These have nt been entered in Quickbooks yet. One was for our booth space, the other for sponsorship of two trophies. In the detail, you will see a Sunnyland sponsorship and a payment to Thomas Holmes for our sponsorship of a marque club meeting. This was for our portion of the food tab.
It should be noted that given tighter cash flow this year, travel and show sponsorships were very low. We have had other years where this expense was much higher. One year, for example, we were a major sponsor of the Sunnyland show.
Under the Occupancy Expense category, you will see Phone, and Computer/Internet
This is fairly self explanatory, but I will offer this overview. Since 2006, our Chris-Craft Antique Boat Club phone was handled by a conventional wired landline, rolling over to a cell phone. We received the typical Qwest monthly phone bill, and the club's share of an AT&T cell bill. I rack up many hours on the phone. There is no way around it really, if we want to be a valued research resource.
The Computer/Inernet piece of this was just for internet connection. We had a primary connection (Keyon) and secondary connection (Mediacom) through two different ISPs. Our firewall had auto-failover in case one connection went down. Prior to June you will see separate charges for phone and internet. There is one larger payment to Keyon that was for three months service....a clean up before we discontinued with them. After June you will see just one larger invoice from Lightedge Solutions. This is the company that provides our T1 internet connection. As well, they provide our newer Voice Over IP phone service. There was a bit of money converting all of this over, but we are reaping the savings monthly. There are a couple of higher payments, due to two months being paid under one payment. Anything that is labeled Lightedge is phone and internet-related. In order to understand the savings you must look at the phone category and Computer/Internet category.
The Moving expense is self-explanatory. Our collection of physical assets fill a good size room. Included are all of the historic items, and also back issues of all Brass Bells, among other things.
Commissions paid are monies paid directly to our two advertising sales person, Andrea Durren and David Dehorn. Their efforts have been exemplary. I am looking forward to getting Brass Bells back on track so they can be turned loose once again.
And finally, Other Income. Listed here are the nominal proceeds that we receive from a Bank of America Visa Card affinity program. The payment from Mark Setterholm is for reimbursement for hotel for a Bob Speltz Antique & Classic Boat Society, Inc. Winter workshop tour that I spoke at. Mark lead the charge in getting me up there, and promised the hotel would be picked up by his company. Upon checkout, they had charged the room to our Chris-Craft Antique Boat Club Mastercard. Mark reimbursed us for the room as promised.
Finally, I feel I should make a comment on the activities that happen at year end. First, there are many large and micro transactions that occur as a result of taking credit card and Paypal payment options. These transactions are not for the weak of heart. I simply do not have the time to log all of these payments every day of the year. There are thousands. Keep in mind, when a check comes in via the mail, it has to be manually entered into Quickbooks and our membership system. But when a new member or renewal payment comes is via credit card, it starts a series of processes. 1. The payment must clear. 2. If it does, it is automatically entered into our membership payment system and the membership is rolled forward. Then every so often, as the credit card charges are processed, they are dumped into the Chris-Craft Antique Boat Club's checking account. This would be easy if these were all $35.00 transactions. But they are not. They are all over the map, depending on what credit card the charge was processed on, etc. All cards have their own transaction fee, and it costs us additional monthly fees just to have a credit card gateway. Same is true for Paypal, although I manually transfer Paypal proceeds across. We simply do not net $35.00 of a membership. It is actually much less when you take into consideration all of the processing fees. See the screen capture from our club checking account below.
This all has to be cleaned up at year end. As you can see from the above screen capture, these payments will get processed through in lumps. We have to check through every transaction and figure out whether it is a membership, a store charge, or a tradingdock ad. Sometimes the "lump" payment contains several transactions of all types. Our accountants assist in this process.
I am hoping that this windy rant gives you all a clearer understanding of where we are at as a club. I feel like I could go on, but I am tired, and I have other things I have to get to.
I will follow up when I can find time with prior year tax returns. These are in a box somewhere where I cannot find them now.
From there I will try to give you all a bit of history about where these grants come from and ow we have been successful in bring these to our club.
With warmest regards,
Bill
