02016 has started, it is time to look back over 02015 at some of the ins and outs of our finances. We did this for the 02014 Annual Report, 02013 Annual Report and before that for the 02012 Annual Report. We want to keep this as open as possible for others to compare their expenses and diversification (or lack of) income.
This report is only possible because we closely monitor our hours, not only for whom we spend them, but on what tasks and projects. This allows us to get really down to brass tacks about where our time is being spent. It is interesting to look back over the years and compare the amount of time we spend in meetings or programming. While some numbers might jump around, we understand the underlying reasons pretty well. New enterprise clients who might like to have lots of CYA meetings versus quick and agile start-ups with short daily stand-ups.
Much like 02014, 02015 was a bit dysfunctional, we switched around a few large customers. Phasing out our involvement with one while ramping it up with another. A few small staff changes and a mix of small projects makes for some interesting numbers. What we are seeing is that the unknown is becoming the standard. The only thing we can be sure of, is that we don’t know what will happen next.
It has really brought us back a bit to the hunter-gatherer versus agricultural way of life. We could have a few clients that we spend a large proportion of our time with. This is low risk, but not very high payouts. Much like farming, bad season aside, you will have some crops each season to survive on. It is less risk than hunting mammoths roaming the plains, but the reward isn’t as great either. This company has gone from huge jumps forward to dry-spells. We’ve been lucky enough to have a small, stable farm on the side to make sure we have a small, but steady income. Over the years we’ve shifted more to a few larger customers and sacrificed profits for security. This isn’t a bad thing if you like what you are “growing”. For us, we are constantly shifting, our next attempt at agriculture will be more of our own products rather than someone else’s.
Hours
Our team averaged around 37.4 hours per week for 52 weeks. That’s not considering vacation, sickness, time-off, holidays or other non-work events. This is down from 02014’s whopping 48h a week and down from 02013’s 42h. I am guess that 02015 is also probably under-reported. Lots of small tasks, like writing a weeknote get lost in the cracks. But that is probably true of every year.
The average length of each time logged was 1.52h which is slightly down from last year’s 1.66h. That means we are context switching slightly more and picking-up smaller tasks. This could be true, it could also be better, more minute reporting on our behalf. Lots of smaller 15 and 30 minute meetings rather than 1h could be skewing this downwards slightly.
Finances
We sent out invoices to 6 different companies. In 02014, we were more diverse and had 9 different companies.
As part of 02014, we wanted to turn a few of our projects into products to generate revenue for us, sadly, that didn’t happen. Only due to lack of time on our part to finish them.
We did manage to turn a profit, we managed to make around 30% more than we spent. This means we have a substantial run-way for 02016. Even if we didn’t take on any new work, we would be fine for several months. This is mostly due to lowering our expenses. There are several ways to become profitable, one is to make more money, the other is to spend less and that’s what we did.
Services
Beyond the hours worked, we can dig a bit deeper into the type of work we are creating. This is important for several reasons. Firstly, from year to year are we doing more or less of the work we want to be doing.
| Category | 02012 | 02013 | 02014 | 02015 |
|---|---|---|---|---|
| Administration | 6.17% | 14.38% | 30% | 19% |
| Consulting | 1.16% | 0.0% | 0.0% | 0.26% |
| Design | 3.60% | 4.07% | 6.5% | 6.34% |
| Meeting | 26.27% | 16.68% | 14% | 20.41% |
| Presentation Preparation | 2.28% | 6.78% | 1.3% | 0% |
| Programming | 48.98% | 52.97% | 30.75% | 39.16% |
| Research | 6.31% | 1.66% | 2.29% | 4.47% |
| Writing | 5.23% | 3.47% | 4.4% | 3.47% |
| Attending | – | – | 3.18% | 2.16% |
| Travel | – | – | 3.76% | 2.19% |
| Photography | – | – | 0.15% | 0% |
| Networking | – | – | 2.6% | 0.35% |
| Pitching | – | – | 0.35% | 0.31% |
| Podcasting | – | – | 0.03% | 0% |
| Planning | – | – | 0.46% | 0.13% |
As you can see and expect, as we work closing with a single client, the time spent planning, networking and pitching all has dropped. These are activities we did less of in 02015. The upside is that we did spend more time programming and less on administration. Having lots of little things sorted out for you by the client means less time administering other tasks. It does also mean that the time spent in meetings goes-up. Lots of daily and weekly syncing to make sure projects are on track.
Travel
It should be noted that our travel and presentation preparation time has gone down. We didn’t give many presentations in 02015 and the ones we did do, were similar or older talks. This does require some preparations, but it was probably very minimal. Still, we spent over 2% of last year traveling.
We managed to get to the New York, USA, and London, Brighton and Manchester UK. We presented at two conferences, attended another and had a small corporate workshop. We spent an estimated 1685 minutes in the air to get to all these destinations.
Expenses
As we look at where our money is going, we must remember that these are percentages, just because a value has gone down in percent doesn’t mean it is less than the previous year.
| Category | 02012 | 02013 | 02014 | 02015 |
|---|---|---|---|---|
| Office Supplies | 7.06% | 7.73% | 3.39% | 1.49% |
| Tax | 41.91% | 37.29% | 37.38% | 55.78% |
| Salary | 46.90% | 29.60% | 42.1% | 34.84% |
| Conferences | 3.26% | 16.16% | 4.85% | 2.34% |
| Projects | – | 3.71% | 1.03% | 1.69% |
| Education | – | 1.25% | – | – |
| Professional Services | – | 4.24% | 2.83% | 2.72% |
| Contractors | – | – | 7.85% | – |
| Analog.is | – | – | 0.42% | – |
The only things you can count on are death and taxes. We managed to have a rather large tax bill from 02014, which gets paid the following year.
Our office supply spending is down again. This is probably due to having all the equipment needed. Once you’ve bought a stapler, printer, desk, etc. you rarely re-buy them the next year. So now it seems we’re getting close to our operating costs of phone, internet, toner and paper. That’s great to know, it is also good to know that it took 3-4 years to get there.
This year was also a quiet year for conferences. Travelling less, means fewer expenses for hotels, transport, food, etc. We really enjoy getting out and travelling, but it is also good to spend less every once and awhile.
Our professional services costs are also levelling out. These are accounting, legal and other fees which we incur on an annual basis.
Web Stats
Most people come to our website through search engines. These are the pages that got us the most traffic in 02015. Some are the same pages from 02014, which is probably due to several factors. The future predicting article is a massively long article with lots of interesting keywords. A few others were links from talks or generally interesting and topical articles.
| Article | Year | Traffic |
|---|---|---|
| Future Predicting, what the next 100 year might look like | 02009 | 31.58% |
| Getting to your Minimum hourly rate | 02013 | 6.35% |
| Titanic Visualized | 02012 | 5.50% |
| What are 2D barcodes | 02009 | 4.77% |
| Pie charts and other circular visualisations | 02009 | 2.11% |
| Meyrin: CERN Terminal Font | 02014 | 2.00% |
| Accessible Color Swatches | 02011 | 1.95% |
| PaperNet Boarding Pass | 02010 | 1.52% |
One surprise is that people are still looking at 2D barcodes. To us, that fad past a while ago, but the mainstream is still unaware of what they are or do.
The traffic to the site is very much a long-tail distribution. These are the top 8 of over 150 published articles. They account for over 55% of all the clicks to the site.
Notes for 02016
Looking back at our notes for 02015 and seeing what we accomplished, it wasn’t very promising. We dropped one large client and quickly replaced it with another. We also didn’t manage to get any of our side-projects turned into products.
That said, our notes and plans for 02016 are similar. We need to diversify our customer-base away from just a few larger companies. I’ve recommended this book, not for the contents, but for the title alone; Dig your well before you’re thirsty. At some point our big customer will move-on to someone else, close-up, get bought, or no longer need our services. In which case, it is better to have a few projects in the wings ready to go rather than start looking for work from scratch. So that’s a goal in 02016, dig a few small wells.
It is a bit of a cheat, because we are pretty far along already, but we want to release a few iOS and tvOS apps. One is in already available: Dashbones. It has been a huge learning experience and we’ll continue to do more of that.