The Kabbage Blog

We usually hear from Rhonda in our Kabbage Chronicle’s posts. But today Bruce is taking over the podium to talk about how they spent their funds from Kabbage in their first “Kabbage Math” post!

I like numbers, something about their straightforward unchanging characteristics appeals to me. Numbers are concrete, you know. With a number, it is what it is. There is no misinterpretation with numbers, no vagueness to it. So when Rhonda asked me to do the next blog about the numbers and my ROI thought process on this venture…it was right up my alley.

For me a dollar profit, a hundred dollar profit and a thousand dollar profit all have on common denominator, which is “profit” bottom line. In some of my business training classes I was made aware of this one thought. “You never go broke with a profit.” So although a goal of 20% return is great and goals are absolutely necessary, I would not turn my nose up at a 5% profit nor would I feel a venture to be a failure with as little as 2%. Think about this – 2% of a million is $20,000. Not a bad chunk of change, huh?

Bruce doing "Kabbage Math"

With this mindset, I am able to approach borrowing from Kabbage with the understanding that if I have more money to invest (or plant!) I have a greater possibility for return. Even if it is just the 2% return in the above example, 2% of $500 is ten times more than 2% of $50.  That’s the beauty of what Kabbage does for the small business owner and what they did for us. Soon it will be easier to determine exactly how much I need to borrow to maximize my profits without extra calculations.

I hear that Kabbage is building a tool that sellers can use to input their margins, the amount they want to borrow and the length of time they want to keep the money so they can identify the profits they can make.  So when I need Kabbage help, I can just look at a lot of inventory that I know it will take six to 8 weeks to sell and this tool will help me determine how much, how long, and if it is even profitable for me at that time.

Like I said, I love numbers, and this tool gives me­­­­­­­ a greater chance of making a profit. Anyway I digress. What I want to do here is inform you about our initial investment through Kabbage funding.  I am going to use percentages because I want you to plug your own numbers in and see for your self.  So, here is the break down of how we spent our first Kabbage loan:

And we are now officially spent out of our Kabbage funding. Here is the break down of items bought:

(See something you like? View Bruce and Rhonda’s ebay Store, Second Bargains.)

So if we can get a return of just 200% of our original Kabbage funds (which is about  2% for each item average) from this first venture, we will have paid back our Kabbage account, paid our eBay fees and walked away with about a 30% return for this venture after all is said and done.  Since our goal is a 20% to 30% return this is within the range to start. I expect it to do much more but if it turns out to be less, it is okay. Again, I will not turn my nose up or consider it a failure if it does less.  Remember, I never go broke with a profit! Hang on, because it’s going to be quite a ride. Investments are like our children – they hardly ever do what you expect, but just as long as they grow, that’s the important part for me.

- Bruce

Note from Kabbage: Have you done your Kabbage math? Care to compare your spending breakdown with Bruce and the rest of the Kabbage beta testers? Leave a message in the comments!

Catch up on Bruce and Rhonda’s story as they start their eBay business with Kabbage:

Bruce and Rhonda Procure a Kabbage Advance [The Kabbage Chronicles, Day 1]

Bruce and Rhonda Savvily Source Inventory [The Kabbage Chronicles, Day 2]

Bruce and Rhonda Organize their Inventory [The Kabbage Chronicles, Day 3]

Bruce and Rhonda Get their eBay Finances in Order [The Kabbage Chronicles, Day 4]