Mac Musings

Low End Mac's Financial Troubles

Dan Knight - 2003.08.14 - Tip Jar

I've been involved with personal computers since the Apple II+ era, first used a Mac in late 1986, and started doing book design and Mac support over ten years ago. I love computers and began sharing my understanding of Macs on the Web over six years ago.

Three years ago that hobby, Low End Mac, became successful beyond my wildest dreams. I was making $35-40,000 a year as a Mac Information Systems manager - but in late 2000, I was taking in more money from my website than from my day job.

On top of that, I was burning out at my job. Not only was I tired of going to work to see what kind of computer problems I might face (with 70-80 Mac users, there was always something), but management had decided to go Windows, at least in sales and marketing. My Mac expertise would soon be worthless.

Site Growth

Watching site income grow from month to month, it looked like there would easily be enough money for me to quit my day job and earn as much publishing Low End Mac as working in computer support. And working on LEM full time would allow me to grow site traffic, further increasing income.

I sat down with my spreadsheets, analyzed traffic growth on the site, projected two to three years ahead with the assumption that traffic would grow at a slower rate each year. I created a budget based on conservative projections, figuring Low End Mac could survive comfortably on $3,000-3,500 per month while expecting $4,000-5,000 in monthly income.

Site traffic grew as expected. In January 1998, we served 81,000 pages. A year later, 393,000. In 2000, 475,000. The following January - the month that I quit my IS job to publish LEM full time - 589,000. And in January 2002 we broke the million page mark.

We've nearly doubled monthly site traffic since I made Low End Mac my full time job.

I didn't intend to get rich, just trade one job for another at the same pay, but it didn't work out that way. The thing I didn't expect was that the dot-com bubble would burst and ad rates would plummet, falling far more quickly than site traffic rose.

We cut wages - I'm now earning a little more than half what I did in my IS position. We reduced the amount we pay writers, which also reduced the number of people willing to write for LEM. We slashed the budget so we could get by on roughly $2,500 per month.

I took on a part time job at a local camera shop to help make ends meet, to help make up for my cut in pay. And still there were times when I couldn't cut myself a paycheck for weeks at a time - sometimes for over a month, as with the PayPal hijacking we experienced a year ago.

On top of that, we had some bad debts and one debt where we received merchandise instead of cash. We managed to sell some of that merchandise, but we still have a couple iMacs that we're prepared to sell at a loss.

We're not losing money at present. Thanks to the efforts of BackBeat Media in selling ads and some long term relationships with a few other vendors, we're pretty much breaking even from month to month. But that's all we're doing at present.

Worse Than Broke

I am not a businessman. I understand spreadsheets and checkbooks, but the intricacies of accounting and taxes are something I'd just as soon leave to an accountant. Unfortunately, that's not something we can afford to do, so I'm doing my own bookkeeping.

Based on our ever changing budget, our average profit was a few hundred dollars per month in 2001 (high at the start of the year and in the hole by the end of the year), followed by losing about $700-800 per month in 2002, and just about breaking even from month to month so far this year.

The problem is that 2002 dug us into a hole that profits from 2001 couldn't fill. All together, we ended up about $6,000 in the hole at the end of 2002. We delayed what payments we could, and at the end of 2002 I was 13 weeks behind on payroll. Today we're 11 weeks behind.

That's a big problem.

The camera shop where I work part time changed hands in May, and I lost two weeks of income during that period. I've also had my hours reduced by one-third, which further impacts the family budget.

In normal circumstances, this wouldn't be a big deal. Tighten the belt a bit. Trim a few expenses. More macaroni and cheese. Less meat. We've done it before. We can do it again.

The problem is that I'm several thousand dollars behind on payroll and the city is on our case to make some home repairs - several thousand dollars of home repairs. We need to reshingle the roof, repair some cement steps, replace a screen door and some windows, repaint the chimney, trim some trees, and a bunch of other little things that add up in a hurry. In addition to that, we've got some plumbing and electrical issues that need to be taken care of inside the house.

We just don't have the money to take care of them, nor do we use credit. We're between a rock and a hard place, compounded by the fact that my wife's business is dependent on contracts with several states - and they all seem to be in financial crisis this year.

It doesn't rain but it pours, and our personal financial crisis can only be solved by eliminating Low End Mac's debts.

You Can Help

Site traffic is steady at about 10 million pages per year. Site income seems stable, and I hope to catch up another couple weeks on payroll by the end of the year. But even that will leave us several thousand dollars in the hole - money we desperately need to make essential home repairs and avoid an arrest warrant and fines from the city. (As I asked the city attorney how arresting and/or fining me would help me make the home repairs I cannot afford. I don't get it.)

Two years ago members of the Mac community helped pull us through a cash crunch by providing thousands of dollars in donations. It kept us going, but we've been slowly slipping into debt ever since. Although we're breaking even today, we need to eliminate our debt and get Low End Mac on an even keel.

Low End Mac Services

We are now offering a la cart email addresses, Web space, and more at lowendmac.net. Instead of paying $99 per year for a fixed set of services, you can choose what's right for you. A basic mailbox is $12 per years, and 25 MB of online Web/FTP/iDisk-style space is available for $20 per year. For those who need more power on their Web space, we offer PHP, MySQL, and PHP MyAdmin services for an additional charge.

We use SpamAssasin to identify and flag about 80% of the spam coming through the server. (Unlike .mac, we don't delete probable spam. What you do with the email is your decision, but we'd hate to throw out a single important message that the software might misidentify.)

With lowendmac.net, you decide how big a mailbox you need and how much online space you need. Your use of lowendmac.net also puts some money in our pockets.

If 100 people sign up for email service, that would cover 20% of our debts.

Hardware For Sale

It's time to bite the bullet and sell the 400 MHz PowerBook G4 now that it's back from Apple. It has a brand new screen and lid, and the keyboard was replaced just a few months ago. The computer has 512 MB of RAM and the original 10 GB hard drive and DVD-ROM drive. It has AppleCare coverage through the end of January 2004. I'm hoping this will fetch $1,200 including the original system software.

We also have a couple 333 MHz blueberry iMacs. One has 320 MB of RAM and the original 6 GB hard drive. The other has 192 MB (it won't support more - we've tried) and a 20 GB 7200 rpm hard drive. I'd like to get $400 for each of these, including Apple's round mouse and original iMac keyboard. (Unfortunately these were received used without any software. If anyone know a good, low-cost source for Rev. D iMac discs, please email me.)

I have the box and can ship the TiBook, but I'd prefer local pickup on the iMacs (Grand Rapids, MI) - they weigh nearly 40 pounds before you box them up. At this point I'm undecided whether to sell them myself or try auctioning the computers through eBay.

Either way, this could reduce our debt by one-third. If you would be interested in one of these computers, please email me by clicking my name above.

Donations

We believe in the value of the Mac, and a lot of you believe in the value of Low End Mac. Of 200-250,000 monthly visitors, thousands of you visit daily, and tens of thousands visit several times each month.

Only you know what Low End Mac means to you, how much we may save you in a year, how we've helped you get more use out of your older Mac, how we've helped you make the right decision with your last upgrade.

We're not begging. We're not panhandling. Think of it as a tip for services rendered. If Low End Mac has helped you, we're asking you to return the favor and help us in our time of need. Whether that's a few dollars or more than a hundred - we received donations throughout that range two years ago - we leave it to you to decide what to give.

You can make donations through the Amazon Honor System. You can also make donations through PayPal by referencing webmaster-at-lowendmac.com. Or send us a check payable to Cobweb Publishing at:

Cobweb Publishing, Inc.
2544 Martin Ave. S.E.
Grand Rapids, MI 49507

For details on donations via Kagi or e-gold, see our support page.

The Future

We remain committed to free access to all site content and hope to continue publishing Low End Mac as an advertiser supported website. We believe that the level of traffic and the rebound in ad rates will make this possible.

However, we don't want to simply tread water; we need to move forward. We firmly believe that subscriptions will be an increasingly important aspect of the Web, and we hope to once again offer a premium version of Low End Mac - ad free content in exchange for a subscription fee. Maybe later this year....

Thank You

Thank you for visiting Low End Mac and making it the most successful website that focuses on the value of Macintosh computing. Your financial support will help us eliminate past debts and get on a firm financial footing.

Once we eliminate our debt, we should be able to get by on ad income alone. Any and all support is greatly appreciated.

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Dan Knight has been using Macs since 1986, sold Macs for several years, supported them for many more years, and has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.

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