It is that time of year again where we look back over some of the numbers in 02014. We did this for the 02013 Annual Report and before that for the 02012 Annual Report. The purpose of these articles isn’t a highlight real or how much we made or who we worked for, but rather for other small companies to have something to bench mark themselves against when it comes to time and effort in various categories. When you start a small company or freelancing you almost always underestimate the administrative overhead. We’ve been tracking our time over the last 3 years and can tell you exactly what percentage is spent on this and that, and create a trend line.
Every year is unique and has its own set of challenges, 02014 was certainly no different. We had a bit of a dysfunctional year so these stats are anything but “regular”, “expected” or “acceptable”, but you make the best of a strange situation and keep moving forward.
Throughout the year, we focused mainly on one customer, which drained most of our time and resources and took a full-time commitment from some of our team. We also brought on a freelancer for a month to move forward one of our internal projects, mosfell. Some incredible work was done, but to our own detriment we haven’t been able to move the project forward. Financially it is a sunk-cost, but we have a working application, now we just need to get out, put the finishing touches on it and try to sell it. The new EU VAT changes certainly put a spanner in the works for these sorts of digital, online products.
We also brought on another full-time team member. This increased the salary expenses. It takes time to settle in and generate new revenue, so our expenses to income are skewed in the wrong direction. We knew this would happen and we’re fine with making the investment to better streamline some of the behind the scenes administration which isn’t directly billable as well as take a risk and build up other ideas which we hope will blossom in the future.
Hours
The average length of time we logged was 1.66h. This means that when we sat down to work on something, we’d get through about 1 hours and 40 minutes before we would context switch to another major task.
With our team, we logged 3931.25h this year, but not everyone was full-time for the full year. A better value for an adjusted hours work per person is 2526h which is an average of 48h per week, 52 weeks a year. This is up from the 42h a week in 02013. Some of this might be due to training and spending time with other employees or trying to push out more projects, logging really long travel days and working a few hours here and there on the weekends and evenings writing, planning and indulging random projects.
Finances
We sent out invoices to 13 different organisations. Four of which were to conference organisers for reimbursements and fees. That leaves us with 9 different organizations we did work for throughout 2014.
Overall we operated at a lose this year. We spent about 250% more money than we brought in. This is due mostly to working on internal projects and prototypes. We have a lot of value building-up within the company, which means our time has not been spent on billable work for customers.
The company is still in the black and goal in 02015 is to move it back into a cashflow positive direction by picking-up more client work and starting to turn some of these internal projects into money generating sales.
Services
If we look at how we are spending our time on various projects, we can see the types of jobs we are doing. We added a few new categories, which explains why some when down and others went up. We added Travel and Attending, which moved some of the hours previously on Presentation Preparation to better reflect real conference time. We also added a few new categories of work, such as Photography and Podcasting – neither of which we did much of at all in 02014, but hope todo more of in the future.
We also decided that we want to better track our pipeline so we added the time we spent pitching and the planning. They are very small, partly due to us probably lumping too much work into Administration.
| Category | 02012 | 02013 | 02014 |
|---|---|---|---|
| Administration | 6.17% | 14.38% | 30% |
| Consulting | 1.16% | 0.0% | 0.0% |
| Design | 3.60% | 4.07% | 6.5% |
| Meeting | 26.27% | 16.68% | 14% |
| Presentation Preparation | 2.28% | 6.78% | 1.3% |
| Programming | 48.98% | 52.97% | 30.75% |
| Research | 6.31% | 1.66% | 2.29% |
| Writing | 5.23% | 3.47% | 4.4% |
| Attending | – | – | 3.18% |
| Travel | – | – | 3.76% |
| Photography | – | – | .15% |
| Networking | – | – | 2.6% |
| Pitching | – | – | .35% |
| Podcasting | – | – | .03% |
| Planning | – | – | 0.46% |
We can see that over the years we have made meetings less and less a percentage of how we spend our time. Unfortunately, this year we took a drop in programming and a major jump in Administration. As part of our work with Vísar, we were building software, but also managing their new employees. Over the last 12-24 months we’ve had 7 people come on board with various roles, from interns to contractors to new employees. All needed some assistance getting started and it obviously took a toll from our work. Luckily for us, much of this was billable and really should have been split into other categories such as training, HR, or something else. Rule #1 is ubiquitous capture, we have the data and if we really wanted too, we could go back through it and better categorize the time, but for now we understand why it is the way it is.
Travel
It is amazing to think that ~3.5% of all our work was just travelling. That’s around 90h of just being on a bus, plane, taxi, sitting in airports or other mode of transportation getting to and from events and conferences. Then another ~3% just attending events.
6-7% of our year was spent at conferences, most of which were reimbursed, had some honorarium or revenue sharing for workshops. While this helps the cashflow, you could argue both that those hours could have generated more revenue doing client work, but at the same time, we are probably getting work because of our conference talks. We’re not overly concerned about these numbers right now, but worth keeping an eye on for the future.
Expenses
When we look at where the money in the business is going too, we can look to our expense categories and see what percentage of our budget is going where. Remember, that just because the percentage has gone down, that doesn’t mean that in absolute terms the amount is less, just relative to the year’s total expenses.
| Category | 02012 | 02013 | 02014 |
|---|---|---|---|
| Office Supplies | 7.06% | 7.73% | 3.39% |
| Tax | 41.91% | 37.29% | 37.38% |
| Salary | 46.90% | 29.60% | 42.1% |
| Conferences | 3.26% | 16.16% | 4.85% |
| Projects | – | 3.71% | 1.03% |
| Education | – | 1.25% | 0.0% |
| Professional Services | – | 4.24% | 2.83% |
| Contractors | – | – | 7.85% |
| Analog.is | – | – | 0.42% |
Our office supply have rounded the corner and gone down. This is probably due to “staffing-up” the first few years. When you start you need to buy things like staplers and a printer, but now that we have them it is a smaller portion of our spending. Taxes and Salary are pretty constant and have settled down to sensible numbers. It is good to note that around 40-45% of your income is spent on take-home salary, plus another 37% on tax. That means around 75% of all our expenses are our staff costs. That means, if you know what you want to make each month, you roughly have to earn 50% more than that to cover the costs of doing business.
Conferences account for 4.85% of the expenses. This is a little difficult to properly calculate. When a conference reimburses us, it is added as a negative expense therefore cancelling out any expenses for things like bus, flights, hotel, but when a conference sends a single payment for fees and reimbursement it is more difficult to untangle, therefore we do have expenses around speaking and attending conferences, not because we do, but because of the way we are doing our accounting.
Our overall project budget has gone down, which is surprising since we have done several interesting experiments and prototypes through out the year. We also did not attend any courses or educational training so it is at 0% this year.
Similar to our office supplies, our professional services budget has gone down. Legal, accounting and other expenses are not always annual or if they are, we can streamline our interactions and give our accountants exactly what they need saving everyone time and money.
We did bring on some contractors this year so those are new expenses not part of professional services. This will fluctuate greatly from year to year based on projects we might have.
Web Stats
Most of how people learn and read about (optional.is) is through links and search results to these articles. This is a breakdown of the top 8 most popular in 02014.
| Article | Year | Traffic |
|---|---|---|
| Meyrin CERN Terminal Font | 02014 | 40.79% |
| Future Predicting, what the next 100 year might look like | 02009 | 17.31% |
| Poisonous People | 02010 | 3.60% |
| What are 2D barcodes | 02009 | 2.61% |
| Titanic Visualized | 02012 | 2.25% |
| CERN line mode browser | 02013 | 1.89% |
| Getting to your Minimum hourly rate | 02013 | 1.73% |
| Fast, Cheap, Good pick two | 02011 | 0.89% |
As you can see, there is a lot of older content which is still popular. Most of which is arrived at via search terms. The future predictions article is almost 7000 words and is about the future, so we get quite a few visits from search engines and people don’t stick around very long once they learn the article was written in 1900. The CERN related articles were VERY popular this year. I think this is mainly due to the exposure from HackerNews, CERN and other sources driving traffic to (optional.is) which were very much of its moment. QR codes are also always coming up in search requests. Inadvertently, the article name turned out to be pretty good SEO, since it describes 2D barcodes in all their forms pretty well, we have been rewarded for good content.
The traffic is very much a long tail distribution, lots and lots of articles getting very few visits. To date, there have been 133 plus this one, 134 articles published.
02015 Notes
Our goals for 02015 are very different than previous years. We are back to finding new clients to work with and focusing again on pitching ourselves and expertise. Without our previous big customer, we’re going to have to get out there and fight for work again. The start of the year will be back to building-up a customer base. We’ve already gotten 3 new contracts signed and several more in the works.
Beyond client projects, we also have at least 3 software products which we’d like to finish in 02015, but that won’t be a reality. The plan is to find some development partners and finish building with them, if they don’t appear, then things will sit on the back burner until they do.
We are also looking to diversify our client base a bit more. Previously, it has been heavily weighted to local customer in count, but usually 1-2 bigger foreign clients. This year we want to attract more foreign clients for both big and small projects.