Today feels like Friday to me, and not in a good way. More like a this-week-is-one-day-longer-than-it-should-be sort of way. Oh well. I was hoping to have the primary Brad Kelly Enterprises domain moved off of the old host and over to DreamHost by today, but I never really got around to it. The domain is current parked with Office Live, which is a great way to get a free domain, btw. When I do get it moved over, I’ll write about the process of obtaining the key and everything from Microsoft.

I’ve kept busy with changes to tshirtreviewblog.com this week, many of them under the hood. I’m particularly excited about the Project Wonderful ad box, just because it’s such a refreshing take on advertising and valuation. I’ll post about PW in the next day or two, after I’ve had a little more time to get a feel for how it’s working.

I’ve been enjoying a lot of reading lately on PPC affiliates. I’m fascinated on how calculating one has to be while still sort of “feeling” your way through it. Anything that’s an inexact science is pretty interesting to me.

I had another project I was hoping to launch tomorrow, but it’s sort of been back burner this week and will probably be delayed a bit.

I was actually surprised at how painless and quick this was. Over my lunch break, I searched for promo codes/coupons for Google Adwords, Yahoo Search Marketing and Microsoft AdCenter, and signed up for each. I created some keyword lists (need to be tweaked obviously) and an ad for each. I entered all my information and then paused my campaigns. Very easy setup. If you’re interested, here are the promotions I used.

Google AdWords: $50 in free clicks ($5 setup fee waived)
Microsoft AdCenter: offer code AFF0108V1 $50 in free clicks (plus $5 setup fee)
Yahoo Search Marketing: $100 in free clicks with ($30 minimum deposit)

This past weekend was the most unproductive I’ve been since the holidays. It’s not like I had nothing to do either, I just had a hard time staying focused. I did manage to experiment with a few different plugins though, one of which temporarily broke the Wordpress. I thought it’d be a good opportunity to recommend a test installation.

Basically, I keep a parallel instance of each site running privately so I can test things before rolling them out publicly. I just install wordpress to a domain subdirectory, and in setup I opt not to make it visible to search engines. Since I use DreamHost, and they have one-click installations, it literally takes me 5 minutes max to set it up. I copy the theme over to the test environment, and take the installation active.

Over the weekend, I was installing and testing the Adsense Deluxe plugin and placing adsense ads for tshirtreviewblog.com. By doing this in the test environment, I was able to try different ad sizes and locations without breaking or distorting the theme publicly. In fact, another plugin I was testing for managing 301 redirects broke the site pretty badly whenever a link was active. Again, this was thankfully done in the test environment and was invisible publicly.

This doesn’t just go for plugins of course, it’s great for trying new graphics or CSS tweaks. Once I know everything will work alright, I simply switch to the live installation and repeat. You could use one Wordpress test environment if you run substantially similar sites, but I have fairly unique plugin setups for both sites. If I clone T-Shirt Review Blog, which I may do in the future, I could continue to use the same test environment for multiple sites.

Update: Here’s a good personal example of how this setup can save your ass at some point.

So you’re raking in some dough with your business now. Maybe you’re a powerseller on ebay, or maybe you’re selling some tshirts online or something. No matter how you make it, you’ve worked for your coin. You should make sure your coin is working for you. Where are you putting all that money? If you have any noteworthy amount sitting in a checking account, it’s time to pack up and stash your loot elsewhere.

A standard checking account earns no interest. There are a number of high-yield savings accounts available online for individuals, but not many for businesses without high minimums. Don’t make the mistake of trying to store your company’s money in your personal high-yield account, separate accounts are important. Many money market accounts at large institutions are looking for $10-50k before they’re even paying a decent rate.

ING Direct has an Orange for Business account which is modeled after their Orange Savings account. There are no minimums, and it’s currently paying 4.50% APY. At that rate, $5k will earn a little less than $20 of interest in a month before it begins to compound. I currently have everything that’s not immediately needed to prevent a cashflow crisis in one of these accounts. It’s not the greatest return, but it’s a great return with minimal risk. The account is linked to your pre-existing checking account, keeping the funds close at hand.

If you’re interested in opening an account, give me your email address and I’ll send you a referral. It’ll get you a cool $25 bonus for making a $250 initial deposit (I get $10).

I’ve been sick as a dog this past week. I started to feel sick while writing about work-life balance and a few hours later I was in bed with the flu and all the fun it brings along with it. The doctor confirmed my suspicions the following morning. I’m back to work today, but spent the better part of last week in bed, certainly uninterested in touching a computer.

Now that 2007 has come to a close, it’s time to start thinking about taxes. Your own taxes are enough; nobody wants to have to worry about going through the process twice. If you use a business to house all your side projects, that’s exactly what you get: two sets of books, and two tax returns. The advantages however, far outweigh the drawbacks.

Separate Books and Accounts
It’s very difficult to see how successful a project is when you pool that money into your personal accounts. It will make tax time a nightmare. Sorting through receipts trying to figure out what was a business expense and what wasn’t would NOT be fun. When your books and accounts are separate, none of this is an issue as your business is a separate legal entity. You can think of the business as a really dumb friend that needs you to keep an eye on his account balances and checkbook register for him. This is a requirement in many jurisdictions, and even where it’s not it’s just plain stupid to not do things this way.

Sorting Mail is Easier
In the interest of keeping overhead low I work from home, and so should you. BKE’s legal address is the same as my home address. For true separation I should use a PO box, but given the kind of mail I receive, I manage well like this. When I get the mail, the first thing I do is sort it into three piles. Everything addressed to Brad Kelly goes in one pile, everything addressed to Brad Kelly Enterprises goes into another, and advertisements go into the trash. Except for pizza coupons. I like pizza.

Income Splitting and Lower Corporate Tax Rates
LLCs, Partnerships and the like use pass-through taxation by default. Every profit and loss flows through to the owner’s personal return, even money that’s left in the company as capital for expenses. While this makes tax time easier, it can also bump you into a higher tax bracket, increasing your overall tax bill.

If you file IRS Form 8832, you can elect to be taxed as a corporation. This forces a separate return for the business and allows you to decide how much money to leave behind in the company and how much to give to yourself as personal income. Any money left in the company (they call this retained earnings) is taxed at the corporate rate, which is 15% on the first $50k, and 25% on the first $75k. This can save you money because anyone earning over roughly $30k personally will be taxed at 25%.

It’s Easy to See How Much You Made Personally
Instead of taking “owners draw” or anything like that, I run a payroll and issue myself a check or direct deposit. You operate like any other employee would, and it’s nearly impossible to pull the kind of shenanigans that interest the IRS. You also get a W2 at the end of the year, making it a breeze when you do your own taxes.

Avoid Self-Employment and Estimated Taxes
Self-employed people have to pay “double” the medicare and social security tax because usually your employer pays half. Many also have to make quarterly estimated tax payments. When you tax your company separately and issue yourself payroll checks, all the tax withdrawals are taken care of automatically by your payroll outsourcing company. It’s just like having a job somewhere, no surprises.

Save for Retirement
When you form a business to govern your projects and websites, you can create a a 401k program. Sharebuilder is one place that comes to mind where you can create a 1-person 401k program. Not only does this allow you to save for your retirement tax-deferred, but you dictate the program specifics and employer match levels, something any other 401k can’t offer.

Access to Dropship Suppliers and Wholesale Prices
Most dropshippers, like those found in the Drop Ship Source Directory and other wholesalers won’t even talk to you without a state tax ID number. When you create a company, you can sign up for a sales tax license. This opens a lot of doors to some valuable business relationships that would otherwise be unavailable to you.

Keep Your SSN Private
For anyone to send you a check online, they need to know your contact and tax information. There is always a field for your social security number. Every business should have a federal EIN, which acts as your company’s social security number. Since my company has accounts with CafePress and Google and the like, rather than me, they all have the company’s federal EIN instead of my personal SSN.

Once BKE was created, I just went around and changed all the account names and SSN information to reflect the company rather than myself.

Last week I wrote about using CafePress for Passive Income. I wanted to share a few things I’ve learned that can help keep your sales on track. These are written as they apply directly to CafePress, but you could interpret them for really anything you’re selling online.

Inside Jokes Don’t Sell
While it could be fun to make up a shirt using a catchphrase from work, nobody else will get the joke, and you’ll be the only one wearing it. One-off shirts are easy to do for yourself or as gifts, and I’ve given custom shirts as gifts before. We’re looking for some income though, and unless it’s universally funny or has some other broad appeal, anything you make for personal use probably won’t cut it.

Aim Low
Look at your competition on CafePress. Some categories are chock full of poorly-made shirts that looks like they were slapped together in MS Paint. Other categories may have fewer shirts, but you can tell they were put together by someone thinking about what they were doing. It’s better to set yourself up as the only option for a good shirt on a particular topic, than as one of a few good options for another topic.

If you drop a few killer shirts into a sea of mediocrity, you’re really going to stand out. We’re not here to make The Best Shirt of All Time™, just a few good shirts that can make some money. If you’re going to actively manage your tshirt sales day to day, then you have the time to take on some of the competition that you’ll see with better designs and categories. If you’re looking for minimal upkeep, you can maximize your chances of making a sale by minimizing your competition.

Do Your Research
What’s popular on CafePress right now? What’s popular in the media? Search through your prospective categories and see what kind of shirts other people are making, and more importantly, buying. Search for your prospective keywords and see what comes up. Those are the shirts you’ll be sitting next to. Would yours pop out? Check out other apparel sites and see what’s “in” right now. Vintage designs? Smartass slogans? When I made my shirt, poker was an extremely popular niche. Tournaments were featured on television on at least a handful of channels, and CafePress was full of crappy poker shirts that were easy to try to outshine.

Do What You Know
While your research may tell you what’s popular, it’s not always the best idea to jump on the hottest idea right now. There’s a lot of competition at the top, for one. More importantly though, you should choose a niche that you’re familiar and comfortable with. Nobody will buy a poker shirt from someone who makes it obvious they’re not a poker player. You’ll also come up with dozens more ideas for designs when it’s something you’re at least mildly interested in. You are your own audience, and you know what a poker player (for example) would be looking for in a shirt. It’s better to be the best person for the #3 or #4 niche than to be an also-ran for a popular topic.

Of course, that being said, don’t do anything so ‘out there’ that you’re limiting your audience. Underwater basket weaving, while it may be fascinating, and may be something you know a lot about, won’t have the draw that some other categories might have.

Be Careful with Time-Sensitive Designs
Halloween shirts are only going to sell in October. Christmas apparel is only going to sell after Thansksgiving. Presidential candidate shirts aren’t good for anything after Election Day. If you’re going to offer something seasonal or time-sensitive, stay on top of it. Get ready to take your designs down after the big day has gone by, and have your next design ready to go up ahead of time. It looks crappy and unkept to still have your Christmas shirts up in February. Keep in mind that time-sensitive designs require the maintenance mentioned above. Choosing something timeless lets you keep it up year-round, minimizing upkeep and broadening appeal.

Don’t Infringe Copyright
After Napoleon Dynamite came out, CafePress had to spend a bunch of time taking down Vote for Pedro shirts and slapping all the infringing shopkeepers on the wrist. Keep away from designs you’ve seen before on shirts, hats, bumper stickers, anywhere. If you didn’t think of it, think twice before trying to profit from it: you can get yourself shut down pretty quickly. Popular quotes from movies and TV shows that have entered the realm of pop culture (Pulp Fiction comes to mind) are a sort of grey area. It’s probably not right, but a lot of people get away with it.

Play the Margin Game
On CafePress, they set a base price for every item you want to put your design on, and you decide how much to mark the item up. When the item sells, you keep the markup and they keep the base. A regular white t-shirt is $13.99 at base price. If you price the white t-shirt at $16.99, you stand to make $3 on every sale.

A value t-shirt, which is similar, but thinner and lighter, is $8.99 at base price. Try putting the same design on the value t-shirt, and price it at $14.99. You stand to make $6 on every sale of a value t-shirt. There’s nothing deceptive about this, as the site labels each shirt for what it is, and clicking on either shirt will tell the shopper details about the shirt’s construction. Place a value t-shirt next to a regular t-shirt with the value t-shirt priced cheaper, and the shopper will choose the cheaper (but higher margin) item most of the time.

I thought it would be nice to sort of detail what I’ve done with Brad Kelly Enterprises since starting the company this past July. This will give you a better idea of where I’m coming from…it’s always nice to have the backstory, right?

The initial goal of Brad Kelly Enterprises when I filed the necessary papers with the state of Michigan was to separate eBay consignment (which I was already doing on a small scale) from my personal finances. Once you’re selling with some level of frequency and volume, it’s difficult to do your taxes and tell them it’s still just a hobby. I’m also fairly close to moving from one tax bracket to another as well. A few thousand dollars of extra income this year would be enough to push me into a fairly sizeable tax increase.

I’ve since moved away from small-scale consignment for individuals and turned my attention toward companies looking to clear out old merchandise. I still do some consignment for individuals, but really just friends and family. The advantages of dealing B2B merit their own post, and are outside the scope of this article; but it would suffice to say that it was a good move. This has allowed me to become a silver-level Powerseller in just a few months, and has comprised the bulk of BKE’s income to date.

While it is “active income,” that is, it requires a considerable amount of ongoing work, it can still be a fairly reliable way to generate some funds without much costs, either up front or ongoing. Currently, I’m just stockpiling that money in a high-yield account. Should I need it for any startup or project going forward, it’s there. By keeping it in the business, there’s no temptation to personally spend it (and have it count as income for me). That’s about where I’m at right now. If you’ve got any questions, please feel free to ask, as I’m sure I’ve glossed over a few details. Where do we go from here? I’ll cover that a little later.

Here’s an idea for the graphically-inclined out there. If you’re not a Photoshop whiz, fear not: the rest of us can get in on the action too.

A tshirt can say anything. It can be political, it can be funny, or it can tell total strangers which summer camp you volunteered at last year. Here’s an idea though that’s not very new, but still worth a second look. Doctor up a couple original designs with your favorite graphics program and put them online. With a good design and the right keyword choices, even an unpromoted shirt can make money.

In December 2005 I had discovered CafePress and gave it a spin. I was really into poker at the time, so I spent some time putting together a fairly simple design that I would wear myself. That’s a pretty important benchmark I think, to ensure quality. If you wouldn’t wear your shirt out in front of your friends without telling them you made it, don’t expect anyone else to do the same.I uploaded my design and customized my “store” a little bit with descriptions and graphics. I set my prices, and through no conscious decision, didn’t return for the better part of a year. I simply forgot about it entirely. It wasn’t until I received an email from CafePress telling me that I had hit their $25 payout minimum, and they didn’t know where to send the money. Needless to say, that got my attention.I logged in and found I had sold, on average, one to two shirts per month for the entire year. That’s not much, but that’s ZERO promotion. All I did was make a good, clean design and tag it with as many relevent (no, I did not spamdex CafePress) keywords as it would allow. The shirt showed up every time someone was looking for anything related to poker. There are people out there making their living from CafePress, and I can see how.

What if I had made dozens of designs on par with that one and spent more than an afternoon figuring out what made CafePress tick? I am certain that with good promotion and placement, any good design could generate some income. Constant promotion is active income though, so keep that in mind. An ongoing commitment would be required to milk any useful level of money out of this system, but a trickle CAN be generated passively.

The inspiration for this post stemmed purely from the almost-daily emails I’ve been receiving from CafePress notifying me of new sales for the last two weeks. Christmas shopping, no doubt.