This year, I took a leap of faith to leave an unfulfilling job and start something completely new. I didn't quite know what to expect, but I knew that most of what would happen next was up to me. My primary goal for the year was really just to get my bearings and not lose too much money. I was hoping to get a full web store up and running with my ceramics products, and I wanted to import several products over the course of the year and build customer bases for each of them.

I was perhaps a little optimistic about how much I could take on in the first year, but I think I'm off to an acceptable start. When I started, I thought I could concentrate on three or four products simultaneously, but the products I am interested in are so unusual and have too many different countries of origin for me to be able to handle the logistics, sales, promotions and marketing work all on my own. I'm also no longer able to effectively invest a lot of time and energy into building web software, since it distracts from more important wholesale sales and promotion work.

I could probably do everything I want to if I had more cash to throw around. But I hesitate to take on inventory risk without a likely destination customer for each product, and I also didn't want to invest too much in the web store until I had a foundation of wholesale customers.

So, by the end of the year, my goal morphed to be more about getting a reasonable number of retail outlets for the dragon beard candy and use it as a foundation for the next series of products. I now have 14-15 retail points of presence, and I think it's feasible to add another 12 or so stores by mid-February. If by fall of next year I've gotten my numbers up to about 60 stores, and get a little revenue trickle from some other products by summer, I'll actually start to have a healthy income.

Based on last month's in-store sales, January will probably be the first month where I actually start seeing enough revenue to cover most of my personal expenses. I've also minimized most of my advertising budget and switched to a more promotion-based approach, so the regular business expenses will start being properly covered by March or April. I am still nervous about three likely "irregular" business expenses related to travel and trade shows in January, March and July, but I think all three of those will pay off.

I learned that focus was the thing I needed most. Since I wear multiple hats, I really have to bet heavily on a small mix of products. I'm just starting to learn how to be a salesman. I'm incredibly naive as a marketer. I am not a genius at advertising. I'm not bad at promotions but I think I have a lot of work to do there as well. And I am not a great bookkeeper, though I am pretty conscious of where my money is going to and coming from. I'm relatively decent at planning, and even at accommodating dramatic changes on short notice. One thing I'm really good at, I think, is recognizing when a product is very distinctive and will bring something unique to the U.S. market. Of course, that's only a very small part of operating a business.

I need to be better organized and I need to make fewer dumb mistakes and miscalculations. I've made mistakes related to filling orders a few times (three, unfortunately all to the same customer). I've misplaced documents, which led at least once to a day-long distraction searching for an item. I underestimated the time it would take for an air freight order to leave the port of origin and to clear customs and FDA inspection. With varying degrees of severity, these have impacted the efficiency and momentum of my business.

When I was at Microsoft I often complained about being resource-constrained on very complex projects. But I never worked on anything as complex as operating all aspects of a business by myself, and I've never been more resource constrained in my life. I know how precarious my position is.

On the positive side, I'm starting to build momentum, and the long term key to my success is converting active sales work into passive revenue streams; I have to help my customers become successful with the products that I am selling them, so that people come to me and ask if they can start selling the products rather than mostly being the other way around.

I'm starting to see evidence of customer loyalty to the things that I sell; several people have become serious repeat customers, buying large quantities or with enough frequency that I have more confidence in the future of my products. Other than continued footwork, I don't know what it will take to transform my small business into a healthy, self-sustaining operation, but I think I'm mostly on the right track. I just need to be incredibly aggressive and execute my sales strategy in the next year.