No doubt 2016 was a tough year for me. Overall my business revenue dropped $17,600 despite my adding new accounting and planning clients at a healthy pace. I easily worked over 4500 hours at three different businesses. This means that my overall gross receipts were under $25 per hour and I had a net business loss after all expenses.
One thing that is likely unique to my situation is that I work in three different fields: finance, insurance and aquaculture. This wouldn’t be a problem if I had reliable help in each. Unfortunately, that was not the case this past year. I had difficulty hiring or keeping qualified workers in all three businesses and wound up taking on low-value tasks myself just to get the work done. That took a serious toll on my overall income. I organized several meetings with South Jersey officials to address the labor shortage issue there (tied to a lack of affordable worker housing) but there doesn’t seem to be any easy solution. For now, I continue doing the work like physical maintenance and trash hauling where I can’t find reliable help. Likewise, I spent hundreds of hours doing basic bookkeeping tasks only because I did not have confidence in available workers.
I lost a few business accounting clients early in the year that were poor matches but I had come to rely on for stable monthly revenue that helped pay the bills. They say this type of purging of unprofitable business is a good thing for businesses in the long-term but it still hurts when the loss of cash flow comes as a surprise.
Marina and seafood-related revenue dropped much more than expected. I had hoped for a break-even cash flow in 2016 but wound up losing about $20,000. The underlying cause – lack of fish – is beyond my control. The loss would have been greater if I had not taken time myself to do much of the necessary manual labor myself. If this trend continues it could be awhile before slow steady gains in the aquaculture business offset faster unpredictable declines in the rest of the bayshore economy. In the meanwhile, I likely need to find new funding in 2017 to continue the working waterfront aquaculture business transformation.
Insurance-related and employe benefit revenue also dropped in 2016. I expect this was triggered by unpopularity of Obamacare. Freedom Benefits business already seems to be on the rebound since the election.
The final blow was an unexpected year-end jump in receivables from clients who were previously reliable payers. I still don’t know what’s up with that. Hopefully I’ll start 2017 by collecting some of these.
Financial stress has other real-world consequences. My relationships and health suffered. I won’t dwell on it these personal issues here, but obviously I must take this as a highest priority.
I hope that the lessons I’ve learned from these 2016 experiences translate to permanent actions to reduce risk and stress in the new year. The small business employee benefit and specialty insurance industries seem likely to rebound following repeal of ACA tax penalties. I need to do more to get the word out about my successes in executive tax planning, especially in connection with nonprofit businesses if this skill is to lead into more business in the year ahead.